2Firsts, September 18, 2025, Dortmund, Germany – The InterTabac and InterSupply exhibitions opened in Dortmund, Germany on September 18th, raising concerns within the industry about the serious issues raised by the European tobacco tax reform. In July 2025, the European Commission proposed revising existing tobacco tax rules, significantly increasing the minimum tax rate across the EU.
At a press conference opening the event in Dortmund, leading representatives of the German tobacco industry expressed reservations about the proposed tax rate, arguing that it was far higher than justified by changes in consumer incomes and economic evidence.
Unintended Consequences
Speakers predicted a series of negative consequences from the proposal, including a decrease in excise tax revenue and an increase in illicit trade, particularly in economically weaker EU member states. Regarding nicotine pouches, industry representatives at the conference stated that the tax increase could directly render the entire industry unviable.
Michael von Foerster, CEO of the German Cigarette and Tobacco Industry Association, called the move "a money-making scheme disguised as coordinating EU fiscal policy." He noted that such a move would not protect health or increase state tax revenue, but would instead disrupt the legal market and stimulate illegal sales.
His sentiments were echoed by Jan Muecke, CEO of the German Tobacco Industry and Next Generation Products Association. Muecke noted that Germany's "gradual, predictable tax increase strategy" has been effective, achieving steady growth in tobacco tax revenue even amid stagnant cigarette sales.
A Bad Example
Muecke contrasted Germany's situation with France and the Netherlands, both of which have implemented sudden and significant tax increases on tobacco products. He noted that in France, the price of cigarettes increased from €8.60 in 2019 to €12.50 in 2025, leading to an "explosive growth" in the illegal market. According to Muecke, the French government lost approximately €9 billion in tobacco tax revenue as a result.
After a similarly large tax increase in the Netherlands, tobacco tax revenue also fell by 24%.
"The message is clear," said Muck. "High taxes don't make people quit smoking; they simply encourage them to buy products from other sources."
Political Support
Bodo Mehrlein, CEO of the German Cigar Industry Association, noted that the proposal would increase taxes on some cigar products by more than 1,000%. He said the policy runs counter to efforts to improve the competitiveness of European companies and puts enormous pressure on tobacco industry owners.
Despite industry concerns, attendees found hope in feedback from German politicians. Some politicians said they would oppose changes to the current tax system, which is considered effective in Germany.
"Germany's tobacco tax system is correct," said Muck. "We hope it will remain so, and we hope the German government can exert influence in Brussels."
For more on-the-ground coverage, visit the 2Firsts Inter Tabac Special Section.
