European Union finance ministers failed to agree on higher tobacco excise duties and new taxes for vapes and nicotine pouches during Monday’s Ecofin meeting in Brussels. A veto from Malta blocked the draft directive, which required unanimous backing from all member states to update the current framework established in 2011.
The proposed legislation sought to raise minimum EU excise duties on combustible tobacco and incorporate novel nicotine alternatives into the single tax regime. Talks will resume in the coming weeks to explore further revisions.
Nordic Divisions Over Nicotine Pouches
The negotiations, led by the Irish presidency of the EU Council, faced sharp divisions regarding oral nicotine pouches. The European Commission initially suggested a tax of €143 per kilogram. Sweden opposed this figure, arguing that pouches represent a unique cultural product comparable to wine in southern Europe.
When negotiators lowered the proposal to €50 per kilogram, Finland objected. Finnish Finance Minister Riikka Purra stated that the minimum duty had been diluted, noting that lower-priced pouches from Sweden enter cross-border illicit networks directed at young consumers.
Irish Minister Simon Harris defended the broader initiative during the ministerial debate:
“The industry is directly marketing these products to our young people across all our member states to ensure the next generation is addicted to nicotine and nicotine-related products; we have to act.”
Malta Halts Compromise Despite Spanish Concessions
Negotiators drafted a compromise deferring the specific pouch tax rate to satisfy Sweden and Finland. However, Malta maintained its veto, declaring the proposed tax increases across the board disproportionate.
Spain backed the final compromise after securing targeted modifications. Spanish Economy Minister Carlos Cuerpo noted his country’s constructive role throughout the process. Under the draft terms, Spain received an extension until 2036 to apply the €200 minimum tax per 1,000 cigarettes, while the tax on fine-cut rolling tobacco was set at €180 per kilogram instead of the Commission’s initial €215 proposal.
| Product Category | Current Minimum Rate | Proposed Rate (Compromise Draft) |
|---|---|---|
| Cigarettes | €90 per 1,000 units | €200 per 1,000 units |
| Fine-Cut Rolling Tobacco | €60 per kg | €180 per kg |
| Nicotine Pouches | Not taxed at EU level | Specific duty rate deferred |
| Electronic Cigarettes | Not taxed at EU level | Included under EU excise scope |
The failure to secure Malta’s support leaves the EU’s 2011 tobacco excise framework in effect until member states can reach unanimous consensus.
