Smokers in Greece are facing the prospect of drastically higher prices, with the cost of a pack of cigarettes projected to jump from the current average of around €4.60 (around $5.30) to approximately €7.00 ($8)—an increase of over 50 percent.
This potential hike is a direct consequence of a massive tax reform proposed by the European Commission, which aims to bring in substantial tax revenue while aligning taxation with public health goals across the bloc.
The European Commission’s sweeping tax proposal
The initiative, which involves the revision of the Tobacco Taxation Directive (TTD) and the introduction of a new European levy (TEDOR), seeks to modernize the EU’s tobacco tax framework, which hasn’t been significantly updated since 2011. The core of the Commission’s proposal centers on significantly raising the minimum excise duties on nearly all tobacco and nicotine products.
The most aggressive scenario supported by the Commission and expected to yield an estimated €15.1 billion in additional EU tax revenue is a 139 percent increase in cigarettes and a 258 percent increase in roll-your-own tobacco.
The Commission justifies the massive hikes by stating that higher tobacco taxes and prices are the most effective measure to reduce overall tobacco use, citing that increased taxation since 2011 is linked to a 40 percent reduction in smoking in the EU. The plan is also part of the broader Europe’s Beating Cancer Plan with a goal of a “tobacco-free generation” by 2040.
Reservations over steep cigarette cost increase: The threat of smuggling and economic impact in Greece
While Greece, along with Italy and Romania, supports the principle of aligning taxation with public health, it is a leading voice among skeptical member states arguing that the increases are too steep.
At the recent Economic and Financial Affairs Council (ECOFIN) meeting, Greek Minister of National Economy and Finance, Kyriakos Pierrakakis, delivered a clear warning, highlighting two major concerns:
- Increased smuggling: Based on Greece’s experience and geographical location (bordering non-EU countries), the Minister stressed that “increasing these tax rates leads to a rise in smuggling.”
- Economic harm: Pierrakakis argued that if prices on both traditional and novel products “increase sharply and beyond what the market can bear,” it will negatively impact the competitiveness of the Greek tobacco industry, affecting both investments and exports.
To mitigate these risks, Greece proposed a more moderate approach, advocating for lower tax rates than those proposed by the Commission, a longer transitional period to allow the market to adjust, and imposing taxes based on the weight of the product, rather than the finished unit (particularly for innovative products).
Smoker prevalence in Greece
Greece has historically maintained one of the highest smoking rates in the European Union, making the tax debate particularly sensitive.
According to recent data, Greece consistently ranks at or near the top of the EU for smoking prevalence, with adult smoking rates hovering at around 30 percent of the population (compared to an EU average closer to 20 percent). Some studies have even identified Greek women as “champions” of smoking within the bloc and Greek teenagers as leading in vaping rates.
Given its high existing consumption rates and border vulnerability, Greece faces a serious risk of tax-driven price hikes leading to an expansion of the illicit cigarette market, which already accounts for a notable percentage of the total cigarette market. The government’s core fear is that excessively high legal prices will simply move consumers towards untaxed, illegal products.
Related: Greece’s Stubborn Smoking Habit: Tougher Laws, Mixed Results
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