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New EU rule changes would mean bad news for #Smokers and #Vapers alike

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In its conclusions in June, the European Council approved a new consensus on excise duties on tobacco. The member states suggest rule changes that would increase the price of tobacco, and equally affect non-tobacco products such as e-cigarettes, writes Bill Wirtz. 

Since 2011, the European Union has had a common minimum excise duty on tobacco products, which notably increased the price of cigarettes in those European countries where the prices are comparatively low. Neighbouring countries with higher taxes were claiming that the prevalence of cross-border purchases was subverting their own public health goals. For instance, German commuters buy tobacco in Luxembourg, as the price is lower than in their local shops.

Now that the 2011 directive has not yielded the benefits that some member states expected, or more plausibly, hasn't produced the number of tax revenues that member states need in the current economic situation, they would like a revision. This revision, however, is not only targeting conventional tobacco products such as cigarettes, snuff, shisha, or cigars and cigarillos. For the first time, the European Council is asking for non-tobacco products also to be included in the… tobacco excise directive. This would make it hard for member states to pretend that the objective is public health and not reducing treasury deficits, as the logical equivalent of this move would be to classify non-alcoholic as an alcoholic beverage.

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E-cigarettes or heat-not-burn devices represent viable alternatives for consumers of conventional tobacco products. We know that while not harmless, vaping is 95% less harmful than smoking cigarettes. By every available logic, governments should rejoice in the prevalence of these alternatives. However, the European Council concludes that "it is therefore urgent and necessary to upgrade the EU regulatory framework, to tackle current and future challenges in respect of the functioning of the internal market by harmonising definitions and tax treatment of novel products (such as liquids for e-cigarettes and heated tobacco products), including products, whether or not containing nicotine, that substitute tobacco, to avoid legal uncertainty and regulatory disparities in the EU".

Adding excise taxes to reduced risk products sends the wrong signal to consumers that these products are just as risky as cigarettes. Research from the United States shows that every 10% increase in the price of vaping products results in an 11% increase in cigarettes purchases.

How serious are EU member states about increasing public health if their go-to method of prevention is raising the tax burden on consumers? E-cigarettes are one thing, but we should not disillusion ourselves with the idea that taxing cigarettes more does anyone any good either. The Council conclusions themselves recognize that Europe is facing a wave of the illicit tobacco trade, and asks for more solutions to fight it. Illegal trade correlates with increased tax burdens: by taxing low-income households out of cigarettes, which remain a legal product nonetheless, we are pushing them on the black market, where criminal elements profit off of bad public health management. In France for instance, a 2015 report found the country to be Europe’s largest consumer of fake cigarettes, with 15 per cent of the market share.

With a lack of quality control, these illegal smokes represent are much more endemic threat to consumer health. Adding to that, the revenues from the sale of these cigarettes benefits international terrorism -- the French Centre d'analyse du terrorisme (Centre for Terrorism Analysis) even showed that illicit tobacco sales finance 20 per cent of international terrorism. Organizations such as the IRA, Al-Qaida and ISIS fund their activities that way.

The European Council's suggested changes to the Tobacco Excise Directive is counterproductive to the goals of public health, and are set to reduce consumer choice and health. We need to analyse rule-changes for more than just their intentions, but look at their prospective results.

Bill Wirtz is the senior policy analyst for the Consumer Choice Center. He tweets @wirtzbill

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Vaping flavour bans prove own goal for public health advocates

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The Canadian federal government recently published draft regulations to ban almost all e-cigarette flavours across the nation, with only tobacco and mint/menthol flavours left untouched. The proposal would also see most flavouring ingredients, including all sugars and sweeteners, banned from use in vaping products, writes Louis Auge.

The bill’s intended purpose is to protect public health by making vaping less appealing to young people. The available evidence, however, suggests that not only could the measure fall short of the mark, it could actually cause more problems than it solves, prompting both young people and adults to take up smoking conventional cigarettes, a far more harmful practice than vaping. Indeed, a recent study by the Yale School of Public Health (YSPH) suggested that, after a San Francisco ballot measure banned flavoured vape liquids in 2018, smoking rates increased in the city’s school district after years of steady decline.

Even after adjusting for other tobacco policies, the study found that San Francisco high school students’ odds of smoking conventional cigarettes doubled in the wake of the ban on flavoured vapes. Other studies, meanwhile, have illustrated how flavours are instrumental in prompting adult users to abandon conventional cigarettes—one 2020 study found that adults who used flavoured e-cigarettes were more likely to quit smoking than those who used unflavoured (or tobacco-flavoured) e-cigarettes.

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Even more staggering is the fact that Canada’s own assessment of the proposed ban on e-cigarette flavours admits that the measure would likely cause some adults to smoke more. Some consumers aged 20 and over who currently use flavoured vaping products, Health Canada acknowledged, would not substitute the flavours they prefer with tobacco- or mint-flavoured e-cigarettes, and instead would choose to purchase more conventional cigarettes.

The startling admission from Canadian authorities really brings home the fact that flavour bans will almost certainly lead to a proportion of users abandoning their vaping devices to take up conventional cigarettes instead—with potentially ruinous public health consequences. It should be a stark warning for countries across the Atlantic, given that several European governments, including Finland and Estonia, have already banned vaping flavours—or are working furiously to push through similar legislation.

The Netherlands is one such example, where health secretary Paul Blokhuis announced last summer that he planned to ban all non-tobacco vape flavours in the country. A public consultation on the issue drew in a record number of responses and yielded a near-unanimous consensus: an overwhelming 98% of respondents were opposed to the ban. Nevertheless, Blokhuis’ measures could take effect as early as next year.

The move is a paradox in the making for the otherwise liberal country, with the Netherlands concurrently pushing major stop-smoking campaigns like STOPtober to get tobacco users to put out their cigarettes for good. By banning flavoured e-cigarettes, the Netherlands risks

jeopardising this progress and sending smokers away from vaping—a practice which is, according to research commissioned by Public Health England, roughly 95% less harmful than smoking combustible tobacco.

That these flavour bans threaten to push smokers back to combustible tobacco products could spell disaster for the EU’s efforts to have a tobacco-free generation by 2040. Despite considerable effort on the part of public health authorities, progress toward this goal has been less than promising: 23% of the overall population still use conventional cigarettes, and almost a third of young Europeans smoke. Europe now has less than 20 years, then, to help nearly 90 million smokers give up the habit.

Failure to achieve this objective could have serious public health consequences. Across Europe, more than 700,000 deaths annually, and a quarter of all cancers, are currently attributed to smoking; unsurprisingly, the bloc is keen to eliminate “the single largest avoidable health risk” via all means possible. As such, the Tobacco Products Directive has been active for a half-decade, and utilises a range of tools to dissuade smokers including health warnings, a track and trace system, and educational campaigns.

All of these measures, however, have not driven smoking rates down sufficiently, and top European officials have acknowledged that significant additional measures will be necessary to achieve the dream of a smoke-free generation. As studies have shown and Health Canada has now admitted, banning the very flavours which make e-cigarettes an attractive option for smokers who are seeking to reduce their health risks yet are unwilling or unable to quit nicotine altogether would likely push many consumers to buy more cigarettes. If this halted— or even reversed— the decline in smoking rates across Europe, the flavour bans could prove to be a dramatic own goal for public health, setting the EU’s efforts to curb smoking back years.

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Plain packaging not the panacea policymakers have been looking for

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A new study by researchers from LUISS Business School and Deloitte in Rome analyses the effectiveness of plain packaging for tobacco products in the UK and France and comes to a sobering conclusion.

EU Reporter wanted to find out more and sat down with the researchers.


EU Reporter: Thank you for agreeing to this interview. This is the second analysis by your group on the effectiveness of plain packaging. The first time you looked at Australia. This time, you focused on the UK and France, two countries that implemented plain packaging to curb cigarette consumption three years ago. Can you summarise how you approached the analysis and the methodology used for the report?

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Professor Oriani: Thank you for having me. Our analysis is based on cigarette consumption statistics that span more than three years of full implementation of plain packaging in the UK and France. So far, ours is the only study that we are aware of that has used data from such a long time period.

We used three methods to assess whether the introduction of plain packaging had a significant impact on cigarette consumption in both countries.

Firstly, we performed a structural break analysis to test whether the introduction of plain packaging led to a change in the cigarette consumption trend.

We then performed a structural model estimation, to confirm if plain packaging can be associated with a reduction in cigarette consumption after alternative influencing factors, such as price, are controlled for.

Finally, we estimated a difference-in-differences regression equation for cigarette consumption that allowed us to assess the differential impact of plain packaging in France and the UK with respect to comparable countries that have not introduced plain packaging.

EU Reporter: What were the main findings of the research?

Professor Oriani: We found that the introduction of plain packaging has had no impact on cigarette consumption trends in the UK or France.

The estimation of the structural model showed that after controlling for alternative influencing factors , plain packaging has had no statistically significant impact on cigarette consumption in both countries. Finally, the difference-in-differences regression shows that plain packaging has had zero effect in the UK, while it is associated with a statistically significant increase in per capita cigarette consumption of 5% in France, which is contrary to the intended goals of the regulation.

EU Reporter: That is very interesting. So, the evidence does not suggest that plain packaging reduces cigarette consumption?

Professor Oriani: Taken together, the data show that there is no evidence that plain packaging reduces cigarette consumption at any levels. None of the different models used showed a reduction in consumption of cigarettes because of plain packaging in the UK and France.

And indeed our research found some evidence of an increase in cigarette consumption in France, suggesting that plain packaging may have had a counterproductive effect on smoking levels.

We also have to keep in mind those smokers that switched to alternative products, such as e-cigarettes or heated tobacco products. Our analysis does not include them. The fact that we found that plain packaging had no effect even without taking account of the shift to alternative nicotine products, reinforces our results that plain packaging is ineffective.

EU Reporter: I mentioned your first study earlier. Can you compare the results of the Australian study on plain packaging to the results from the UK and French studies? What conclusions can we draw from such a comparison?

Professor Oriani: The results in this report are consistent with those presented in our previous study on the impact plain packaging has had on cigarette consumption in Australia. We used the same methodology and came to the conclusion in one of our models that plain packaging is associated with a statistically significant increase in cigarette consumption there, as well.

This shows that there is no indication that plain packaging reduces cigarette consumption. Also, there is some evidence that plain packaging may result in higher smoking levels, which is something we should try to avoid.

EU Reporter: As an expert, how do you recommend European policymakers approach the topic of plain packaging?

Professor Oriani: As the most in-depth and comprehensive study on plain packaging in the UK and France to date, our research can help inform European policymakers when considering which types of tobacco control measures to introduce. This and our previous studies do not confirm the hypothesis that plain packaging is an effective policy measure to reduce cigarette consumption. European decision-makers evaluating plain packaging should consider this to ensure they have a full picture of the potentially counterproductive impact and costs of plain packaging.

The study can be accessed here

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World No Tobacco Day 2021:

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“Tobacco use is the single largest avoidable health risk. It is the leading cause of preventable cancer, with 27% of all cancers attributed to tobacco. With Europe's Beating Cancer Plan, we are proposing bold and ambitious actions on prevention to reduce the use of tobacco. We have set a very clear objective - to create a smoke-free generation in Europe, where less than 5% of people use tobacco by 2040. This would be significant change compared to the around 25% today. And reducing the use of tobacco is crucial to reach this goal. With no tobacco use, nine out ten cases of lung cancer could be avoided.

"Many, if not the majority, of smokers have attempted to quit at some point in their lives. The latest Eurobarometer[1] figures speak for themselves: if we manage to support smokers trying to quit to follow this through successfully, we could already halve the smoking prevalence. On the other hand, three out of four smokers who quit, or tried to stop, did not use any help.

"The COVID-19 crisis has highlighted the vulnerability of smokers, who have up to a 50% higher risk of developing severe disease and death from the virus, a fact that has triggered millions of them to want to quit tobacco. But quitting can be difficult. We can do more to help, and this is precisely what this year's World Tobacco Day is about – committing to quitting.

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"We need to increase the motivation to leave smoking behind. Stopping smoking is a win-win situation at all ages, always. We need to step up our game and ensure that EU tobacco legislation is enforced more strictly, especially as regards sales to minors and campaigns on giving up smoking. It also needs to keep pace with new developments, be sufficiently up to date to address the endless flow of new tobacco products entering the market. This is particularly important to protect younger people.

"My message is simple: quitting is saving your life: every moment is good to quit, even if you have been smoking forever.”

[1] Eurobarometer 506. Attitudes of Europeans towards tobacco and electronic cigarettes. 2021

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