Rising Tobacco Prices in France Fuel Concerns of Illegal Trade

According to recent reports from French media, tobacco prices are expected to increase by as much as 1.50 euros by 2024. Retailers have expressed deep concerns over the regulated prices of hand-rolled and heated tobacco, fearing that such price hikes will further fuel rampant illicit trade.

According to reports, tobacco retailers are expecting a 40 to 50 euro cent increase in cigarette prices on January 1, 2024, as tobacco taxes are currently linked to inflation levels. In 2023, the tax department implemented a new tax system for previously low-tax products such as hand-rolled cigarettes and heat-not-burn cigarettes. Most tobacco manufacturers have stated that prices will be raised by 50 euro cents to account for the impact of inflation, but some companies have taken a more aggressive approach. For example, Philip Morris International (PMI) has announced that their Marlboro products will see a minimum increase of 1 euro, according to a document released by customs on Tuesday.

"This price adjustment exploits the consumers of hand-rolled and heated cigarettes, most of whom are living in poverty," lamented the Tobacco Distributors Association. "We were aware that prices would increase, and the adjustments in the prices of hand-rolled and heated cigarettes were inevitable. However, the situation has now exceeded our expectations, and the drastic price increase is likely to drive consumers towards the illegal market," expressed the Tobacco Distributors Association.

The French government's new anti-smoking plan, proposed at the end of November last year, predicts that by early 2027, the minimum price for a pack of 20 cigarettes will gradually increase to 13 euros, with the first step being an increase to 12 euros in 2025.