Tobacco in the EU: still not very expensive in Spain, very cheap in Bulgaria and a luxury in France and Ireland

Spain is one of the tobacconists in Europe and that tobacco is not cheap in relation to other places in the world. It is, and a lot, when compared to some European countries. Ask French smokers, who don't hesitate to cross the border en masse to buy tobacco at less than half the price in France.

Tobacco in our country is cheaper than in 13 of the 27 countries of the European Union, with a weighted price of 4.53 euros per pack, excise duties and VAT included. Tobacco itself is not expensive at all, what makes it more expensive are the taxes applied to it, which most States gradually increase above what is legally required, also relying on the fact that the World Health Organization ( WHO) recommends that at least 75% of the package price corresponds to taxes, as already pointed out in 'The global tobacco epidemic 2015'.

The EU establishes a minimum special tax on tobacco of 1.80 euros per pack of 20 cigarettes, plus 60% of the weighted average retail price of each country, which, in addition to special taxes, applies its VAT. Theory ensures that the main objective of making tobacco more expensive by imposing more taxes from time to time is to combat smoking, but practice does not say the same and tobacco continues to be a very profitable business for all States.

Smoking a pack a day in Spain costs 135.9 euros/month

Yes, in recent years there has been a flight of cigarette smokers towards rolling tobacco, which is more widespread, but it has not translated significantly into fewer consumers. In fact, cigarette sales grew in Spain in 2019 for the first time in a decade. It did 0.5%, reaching 2,243 million packs dispensed, according to the Commissioner for the Tobacco Market (CMT). Close to 427 million corresponded to Catalonia, 361.3 million to Andalusia and 282.9 to Madrid. The sale of cigarettes generated revenue of 10,201 million euros in 2019, 0.3% more than the previous year.

In terms of special taxes, plus VAT, Spain (excluding the Canary Islands, Ceuta and Melilla) ranks 14th among the 27 EU countries (€3.59 per package), according to data from the European Commission, Taxes in Europe Database, compiled by the Tax Foundation. Which means that each pack comes out on average for those 4.53 euros. That does not prevent a package of the most consumed brand in Spain, Marlboro, from having a higher price: 5 euros per pack. A cigarette in Spain costs almost 23 cents. For a smoker who buys a pack every day, filling his lungs with smoke costs 135.9 euros each month.

Ireland, a package for the infumable price of 12.81 euros

If smoking in Spain is expensive, in Ireland it is a luxury. It is the nation that applies the most taxes of the 27 in the European Union (€9.60). The average price of a pack in Ireland is 12.81 euros, which means that each cigarette costs 64 cents. An Irishman who smokes a pack a day spends 384.30 euros a month.

Much cheaper are the Bulgarians, who are at the opposite extreme, although the salaries in Ireland and Bulgaria are also light years away. Applying less taxes than anyone else in the EU (€2.27) leaves the package price at an average of €2.77 in Bulgaria. That is why a good part of the production ends up in other countries. A cigarette costs less than 14 cents (64 in Ireland, 50 cents more), and buying a pack every day costs 83.1 euros per month (384.30 in Ireland, 301.2 euros more).

France translates more expensive tobacco into more contraband

Ireland is the leader in tobacco taxes and high prices in Europe. But the second among 27 is a neighbor of Puerta de España and the tobacconists closest to the border attest to this. They rub their hands daily. France has been increasing the taxes until applying them already for a value of 8.22 euros per pack of 20 cigarettes.

The pack costs an average of 9.70 euros, for 4.53 in Spain, more than double. The difference is evident and the consequences do not happen because the French smoke less, but because they have become the largest consumers of contraband cigarettes on the Continent. The percentage of total consumption of counterfeit and smuggled cigarettes reached 23.1% in France in 2020, followed by 22.4% in Greece and 20.2% in Lithuania.

The French are not the only ones who cross borders in search of cheaper tobacco. The Finns are also given to it, although to a lesser extent than the Gauls. Finland is the third most expensive country in the EU, with a price per pack of 8.60 euros, and cheap tobacco abounds in its surroundings. In fact, it is an exception among Eastern European countries, where prices are much lower than in the West. In any case, KPMG reveals that last year, despite the Covid, 34.2 billion counterfeit and smuggled cigarettes were consumed in the European Union, 7.8% of total consumption, which meant a loss of 8.5 billion euros. in tax revenue.

6,880 million euros more for the state coffers

Our other EU neighbor, Portugal, has traditionally had prices a few cents below those of Spain. Other times they have been on par and have even been more expensive in our country, as is currently the case. Now the package costs an average of 4.64 euros in Portugal for 4.53 in Spain, which has other neighbors, apart from France and Portugal, where tobacco and smuggling are very prominent: Andorra and Gibraltar.

Those special taxes on tobacco that make its price more expensive and vary greatly depending on the country will be increased in Spain by 5.5% in 2022 to add 6,880 million euros to the State coffers. At least that is the forecast of the Government of Pedro Sánchez in its budgets: "Cigarette prices will rise after several years of stagnation." For his part, the president of the National Committee for the Prevention of Smoking (CNPT), Andrés Zamorano, justifies the measure, although the increase planned by the Government seems little to him, and he stated this on October 20 on his Twitter account. . He made no friends among smokers: "If we don't want to continue being Europe's tobacconist, the price has to be equal to or higher than France. Buses come from France to buy tobacco. Luckily we are a peninsula! I feel ashamed as a country, as a @AZamoranoCNPT and as @CNPT_E".

Gibraltar imports wildly and there is contraband

Andorra is a traditional destination to buy tobacco given its exceptional tax conditions, outside the EU, although in practice you barely save one euro per pack and they let you take out less and less legally. What does continue to be a common practice is smuggling, which is almost always carried out by crossing the border through the bush in both directions. Gibraltar is something else. The British colony imports tobacco in excess, knowing that much of it will end up arriving in Spain illegally.

The European Union has reprimanded the UK on numerous occasions for considering Gibraltar to be failing in its obligations to combat smuggling. But nothing has changed nor does it look like it will now that they are out of the EU.

In the Campo de Gibraltar region, meanwhile, with an unemployment rate of over 40%, resorting to fraudulently extracting tobacco from the Rock is often the only source of income that some families find.

Despite the fact that, due to Brexit and Covid-19, which prevented the regular movement of people, Gibraltar reduced its land imports of tobacco by almost a third in 2020, La Roca received 26.6 million packs last year, compared to to 35 in 2019 and 70 in 2018, according to data from the Tax Agency. Although in reality, Gibraltar matters more, since data on tobacco entering by sea would be missing, of which the Spanish authorities are not aware.

The truth is that 40% of the cigarettes imported by Gibraltar end up in Andalusia. Although the colony has reduced its imports, the 26.6 million packs arrived in 2020 would mean that each and every one of the nearly 34,000 registered Gibraltarians would have to smoke 2.14 packs a day to justify the amount imported last year . And that the reduction has been drastic: in 2018, with 70 million packages imported, each Gibraltarian had to 'happen' to smoke 5.64 packs a day. But it is that in 2012, with 139 million packages imported, each registered in the colony came out to 9 packages a day: 180 cigarettes.