As The Brussels Times reported on 19th February, Belgium has emerged as a focal point of Europe’s expanding illicit tobacco market, reigniting a familiar confrontation between public health authorities and tobacco companies over its root causes.
For the tobacco industry, rising illegal cigarette sales are framed as proof that higher taxes and tighter controls have backfired, with focus placed on domestically produced counterfeits and statistics from industry-funded research supporting this claim. Public health experts offer a different view: according to Sciensano, smoking prevalence in Belgium has fallen from 28.5% in 2001 to 17.6% in 2024, while the Belgian national health institute’s studies indicate that counterfeit products are not smokers’ main response to higher prices.
Belgium now stands as a microcosm of the EU’s struggle against illicit tobacco, where industry-driven narratives deflect attention from the sector’s complicity. As the Union revises the Tobacco Excise Directive (TED) and Tobacco Products Directive (TPD), policymakers must resist lobbying efforts to dilute reform and instead pursue measures aligned with the World Health Organization’s Framework Convention on Tobacco Control, strengthening the fight against illicit trade while advancing the Commission’s tobacco-free goals.
Setting the record straight
As Europe’s illicit tobacco market grows, Big Tobacco has wasted little time recycling its familiar playbook, amplifying claims about a supposedly vast counterfeit crisis in order to shape the policy debate. Philip Morris International’s latest data asserts that 33% of cigarettes consumed in France are illegal, alongside 26% in the United Kingdom, 15% in Belgium, 8% in the Netherlands and 2% in Germany. Yet these exaggerated figures blur the structural, tobacco industry-driven dynamics that sustain the market.
Research from Sciensano on the Belgian market challenges the industry’s narrative, indicating that counterfeit cigarettes are far from the primary driver portrayed in lobbying materials. The agency instead highlights organised “tobacco tourism” to Luxembourg, where significantly lower excise duties attract cross-border shoppers, and where manufacturers deliberately oversupply the market far beyond domestic consumption in order to channel excess product into higher-tax neighbouring countries.
In 2024, Luxembourg consumed just 610 million of the roughly five billion cigarettes supplied to its market, leaving an estimated 88% to flow into parallel channels across France, Germany and Belgium. Beyond Luxembourg, Bulgaria – the EU’s lowest-priced cigarette market – has long served as a key source for Belgium’s illicit trade. By the second quarter of 2024, over one-third of Belgian cigarette consumption evaded taxation – up from 20% the previous year. Crucially, counterfeit products accounted for just 1% of this consumption, with the vast majority instead sourced from Bulgaria (45.4%), Luxembourg (14.7%) and other low-price jurisdictions like Romania – products that originate, directly or indirectly, from the manufacturers’ own production lines.
It is precisely these vast, parallel trade-fueling price differentials that the Commission seeks to address through the TED revision. By raising minimum tax thresholds, the reform would narrow the intra-EU gaps that make countries such as Bulgaria and Luxembourg key sources of cross-border supply.
Tobacco industry’s pattern of interference
Beyond raising excise duties on cigarettes and newer products such as vapes, heated tobacco and nicotine pouches under the proposed TED revision, the Commission should also advance a country quota mechanism through the long-awaited TPD overhaul. Explicitly required under the WHO FCTC Protocol to Eliminate Illicit Trade in Tobacco Products, such a system would regulate manufacturer deliveries according to real national consumption and tackle the root problem of deliberate industry oversupply.
Leading the domestic effort, French MP Frédéric Valletoux tabled a European resolution adopted unanimously by France’s National Assembly on 26th November demanding the implementation of country delivery quotas. The resolution calls for sharply limiting the volumes allowed to circulate between member-states and restoring a simple but too often ignored principle: a cigarette should be consumed in the country where it is purchased. Crucially, Valletoux’s resolution also highlights the need for an EU tobacco traceability system genuinely independent of the tobacco industry.
Facing renewed tobacco control momentum, the tobacco industry is once again deploying every lever at its disposal to slow reforms long delayed by its own lobbying. Drawing on significant economic and investment links with member-states including Italy, Romania and Bulgaria, the tobacco industry has worked to build support for a less ambitious TED in the months following the Commission’s proposal last July. This Big Tobacco influence has been particularly visible under the current EU Council Presidency of Cyprus – another Member State with deep ties to the industry – where controversy has erupted over a Cypriot “compromise” text that waters down key TED provisions.
This is a familiar pattern for the tobacco industry, which successfully diluted the 2014 TPD, leaving the EU with a weak traceability system closely linked with the very manufacturers it is meant to oversee, in breach of the WHO Protocol. Operators such as Dentsu Tracking and Inexto have been embedded in the framework, granting the industry undue influence over a system that threatens its illicit trade profits.
Lessons from across the Channel
After years of relying on an ineffective traceability framework while illicit trade has surged, the EU urgently needs a genuinely independent regime, coupled with tax alignment and delivery quotas, to protect public health and recover between €11.6 and €20 billion in lost revenue annually. In this respect, the United Kingdom has just signalled the right path forward, notably in a segment where industry profits are shifting: vaping.
Although the UK still operates the same Dentsu-managed tobacco tracking model inherited from the EU, it has broken new ground with a separate, independent tracing system for vaping products. Announced by HMRC in early February, the contract was awarded to a consortium led by traceability technology providers Cartor Security Printers and SICPA. Unlike the EU’s purely digital track-and-trace model, the new vaping scheme will combine advanced tax stamps incorporating banknote-grade security features with digital technology, while remaining fully independent from manufacturers.
This WHO Protocol-compliant model has already been deployed successfully in roughly twenty countries, proving effective against parallel trade and product diversion. Moving forward, the EU should draw on this model in revising the TPD by introducing an independent system for next-generation products, such as vapes, heated tobacco and snus, while replacing its current combustible tobacco framework.
Across Europe, the debate over illicit tobacco has become a test of political resolve at a pivotal moment for public health policy, with Belgium’s experience illustrating how selective data and industry spin can distort that conversation. In this context, draft positions emerging under the Cypriot Presidency that appear to accommodate industry demands should give serious pause. Moving forward, EU leaders must guard against this drift, close loopholes and hold the line on ambitious reform.
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