The economics of tobacco in EU countries

It’s a common habit, we see it everyday around us and the usual reaction is to ignore it.
With approximately 209 million smokers only in European Region (29% of the population) its
very possible that you have friends or members of the family that are doing it. Most recent
studies shows that from those over 200 milion smokers, an estimated 1.5 million will be dead by
the end of this year because of the diseases caused by this “common habit”. This, and also the
large tobacco consumer market have a real impact on a social and economic level.

Tobacco Control Policy Activities

Being such a sensitive and important matter on an international scale, World Health
Organization Framework Convention on Tobacco Control (WHO FCTC) was adopted globally
in 2003 and then later put into force in 2005, being the first international health-related treaty to
have been adopted worldwide. Since then, the European Region made significant progress in
implementing this treaty with 50 of 53 countries ratifying it and use it as a powerful legal
instrument to fight the tobacco epidemic. Control policies like mandatory pictorial warning
labels on packaging , raised taxes,  full protection from tobacco smoke in indoor workplaces and
well-established programmes in the treatment of tobacco dependence and cessation make of
European Region a global tobacco control leader.
Although progress is being made every year, there is a lot more work to be done such as
ban on advertising, promotion and sponsorship which exists in only 5 countries (less than 10% of
European Region). Even if on a political, declarative level all country leaders agree, in reality
almost nothing in this area was achieved. To imagine the scale of the work that has to be done in
the future, we have to realize that European Region is a world leader when it comes to cessation
programs but in the same time only 9 countries are actually implementing these kind of projects.
When it comes to redirecting revenues from the taxes on tobacco, less than 1% are actually
invested back into these kind of programs.
 Along with FCTC, since 2008, WHO implemented the MPOWER package which is
mainly focused on six effective policies that can counter the tobacco epidemic :
Monitor tobacco use and prevention policies;
Protect people from tobacco smoke;
Offer help to quit tobacco use;
Warn about the dangers of tobacco;
Enforce bans on tobacco advertising, promotion and sponsorship;
Raise taxes on tobacco.

These policies were the solution found following the “WHO Report on the Global
Tobacco Epidemic, 2008” that presents “a unique and comparable set of country-specific data
from around the world that will cast an intense spotlight on tobacco use, its impact on people and
economies, and the progress countries are making to reverse the epidemic” according to Dr.
Margaret Chan (former Director-General of WHO).

Overall, new ideas and projects appear in this area every year. Each one with its own
approach on the matter. Maybe some are more efficient or others are easier to implement. The
one thing we can say for sure is that all of it have well intended purposes. So, if we are all on the
same page, why the progress is so slow? We can agree, less than 1% from the taxes revenue on
tobacco invested in social preventing or cessation projects is a small percentage but in the same
time, that means over 450 million euro yearly budget. The countries which invested it in this area
had significant results. We can call it an investment because ultimately, it has a positive impact
not only on public health, but also on economy, increasing productivity and consumption. There
are many reasons why the rest of the countries are not making efforts in this matter, but the main
one is the fact that these kind of programs are completementary to the primordial needs of a
community. While having problems in managing healthcare, education and economy, many
countries from EU region leave fields like “tobacco control” on the bottom of their list of
priorities.
 Electronic Cigarettes

E-cigarettes are known by many different names, including e-cigs, electronic nicotine
delivery systems (ENDS), alternative nicotine delivery systems (ANDS), mods, vape pens,
vaporizers, vapes and tank systems. E-cigarettes heat a liquid – called e-liquid or e-juice – to turn
it into an aerosol or vapor. E-cigarette users inhale the vapor into their lungs.

Although the term “vapor” may sound harmless, the aerosol that comes out of an e-
cigarette is not water vapor and can be harmful. E-cigarette vapor can contain nicotine and other
substances that are addictive and can cause lung disease, heart disease, and cancer.

In the recent years, the use of e-cigarettes has been increasing. With a market with over 2
bilion euro in value, many believe that this device can substitute common cigarettes. But is it
true? It is clearly to soon to draw a conclusion. Recent studies shows that the use of e-cigarettes
reduce the use of tobacco, but how does these affects the user`s health?

Research is being conducted everyday in this matter. For now we don`t have clear, one-
way results, each study showing us different outcome. Some concluded that it might be a
healthier alternative to classic smoking, others have found that e-cigarettes doesn`t help the
smokers to quit this habbit, more so, it even encourage younger individuals to try it. The
diversity of the flavors, the smell and even trends cause a dramatically increase in use of this
devices.

Now, more than ever, UE should approach this matter very seriously. More research has
to be done, focusing on analizing the results. The structures and organizations that study the
results should be consolidated. Data, if collected and used properly can be UE greatest ally in
adopting the right policies regarding e-cigarettes.
 Heated Tobacco Products

Heated tobacco is a new nicotine delivery system that is commonly referred to as “Heat-
not-Burn” by the tobacco industry. Heated tobacco products consist of a small tobacco stick that
is heated electronically, rather than burned. As it starts to heat the tobacco, it generates
an aerosol that contains nicotine and other chemicals, that is inhaled and it also generates smoke.
Same as e-cigarettes, heated tobacco products contain flavors and other compounds that can
affect the smoker and the ones around him.

As early as the 1960s, the tobacco companies developed alternative tobacco products
with the goal of supplementing the cigarette market with products. Heat-not-burn tobacco
products first came to market in 1988, however they were not a commercial success.

In opposition with the big players in the tobacco industry that promoted these type of
products as having less negative impact on public health than regular smoking, WHO report of
2016 clearly stated that no compelling evidence was found to confirm those claims.

From an economic perspective, HTP are a viable solution for the tobacco industry, its
profit margin being almost double than for classic cigarettes. Also, for the major players this was
an occasion to try to go around some EU regulation for advertisement and merchandise. For
economy in general it could be a solution only if the studies show that users of HTP are more
likely to quit consuming tobacco or nicotine, but for now, experimental tests show that there is a
higher volume of puffs at shorter intervals than with traditional cigarettes.

Advertisement for the sticks containing the tobacco from these devices may fall under the
European Union Tobacco Products Directive, but advertisement for the actual product is not
regulated and it is used by tobacco industry to consolidate their brands even more.

In conclusion, we should not allow debate around these new tobacco products to distract
us from the main purpose – promoting regulatory measures that we know are effective at
reducing smoking, continue to support those who wish to stop  smoking and tell smokers that the
safest tobacco product on the market is the one they will never smoke.