Cigarette prices in the EU are rising sharply: how will this affect the Ukrainian market
2 August 12:09
The European Union is preparing for a large-scale increase in the minimum excise tax on tobacco products, which will lead to a 2.4-fold increase in the price of cigarettes. According to forecasts, similar processes will soon affect Ukraine.
This was stated by tax policy expert Viacheslav Cherkashyn in his column for Focus . Reported by "Komersant Ukrainian".
The European Union is preparing for a significant revision of its tobacco policy. Brussels is initiating changes to Directive 2011/64/EU regulating the taxation of tobacco products. According to the expert, the new EU initiative envisages a number of decisions that will lead to an increase in the cost of cigarettes – first of all in the EU countries, and later in Ukraine.
The most important change will be an increase in the minimum excise tax on cigarettes – from 90 to 215 euros per 1000 pieces. This means an increase of 139%. In 22 of the 27 EU countries, this will result in a significant increase in retail prices – by 1-2 euros per pack. Only five countries – Belgium, France, Finland, the Netherlands, and Ireland – already have tax rates higher than the proposed minimum.
The directive will also apply to so-called “new innovative products”: e-cigarettes, heating tobacco, nicotine pouches, etc. They will also be subject to new minimum taxes. At the same time, Swedish snus will still not be covered by the document.
Another important change is that raw tobacco will be included in the electronic system for tracking the movement of excisable goods within the EU.
The European Commission predicts that the new system will bring in an additional EUR 15 billion annually to the budgets of the member states. Savings on healthcare are also expected to be about 6 billion euros per year.
For Ukraine, these innovations mean a significant acceleration of the pace of tobacco excise tax increases. Currently, the country is expected to reach the old EU minimum standards only in 2028 (according to Law No. 4115). If the EU adopts new rules in the near future, Ukraine will have to adapt its policy earlier. It is estimated that this will cause another jump in cigarette prices in 2026-2028 and may activate the shadow market.
