After a two-month delay triggered by sweeping anti-mining protests, Panama has convened leading tobacco control players from around the world for a pair of World Health Organisation (WHO) summits aimed at reining in Big Tobacco’s excesses. Spanning the first half of February, the COP10 to the WHO FCTC and MOP3 to the ITP Protocol conferences are mobilising representatives from over 180 countries to counter the industry’s cynical moves, including its interference in the fight against the illicit tobacco trade.
Indeed, just days before COP10’s kick-off, the University of Bath’s Tobacco Control Research Group (TCRG) published a new study suggesting British American Tobacco’s (BAT) involvement in Iran’s illicit tobacco trade, including potential involvement in smuggling its own products.
Far from an isolated incident, Big Tobacco’s infiltration of policies intended to stamp out the illicit tobacco trade have long been documented in Europe, with new data revealing the consequent failure of the EU’s flawed track and trace system – a situation which calls for an urgent, WHO-compliant revamp of Brussels’s tobacco control approach.
Illicit trade stalling tobacco control progress
Although global smoking rates have declined in recent years, the WHO recently reminded that this plague continues to cause over 8 million deaths every year—15% of which are non-smokers; consumption reduction targets for 2025 now seem out of reach amid the industry’s continuous exploitation of weak regulations to reach new smokers via advertising and the black market.
The WHO predicts that Europe will replace southeast Asia as the region with the highest tobacco consumption levels, it projects that Europe will replace it by 2030, with stubbornly-high smoking rates seen in countries such as France, Bulgaria and Greece. In the EU, a growing illicit tobacco trade is hindering progress on the bloc’s smoke-free ambitions, with these three member states among those particularly affected by illicit consumption.
Big Tobacco continues to claim that high excise taxes in countries such as France push smokers to the cheaper black market – a misleading narrative clearly disproven by the strong illicit trade in low-tax countries like Greece and Bulgaria, or on the contrary, the low level of illicit trade in some high-tax countries like Sweden.. Tobacco control leaders in France have begun to expose this deflection of responsibility, with NGOs and MPs alike highlighting the industry’s oversupplying of small, low-tax markets with the intention for excess product to be smuggled into high-tax countries to circumvent strong tobacco control regulations.
Failing EU track and trace: is industry influence to blame?
This fundamental conflict of interest between the tobacco industry’s commercial considerations and WHO-aligned public health objectives has plagued recent EU efforts to curb its illicit tobacco trade.
In place since 2019, the EU’s track and trace system – operated by the tobacco industry-linked Dentsu Tracking – has consistently failed to reduce the bloc’s illicit tobacco consumption and meaningfully bolster excise tax collection. Illicit trade remains a serious problem in the bloc—costing the EU an estimated €20 billion in lost tax revenue every year—and country-level tax figures for 2022 recently published by the European Commission reveal a concerning picture about efforts to address the situation.
Across the EU, cigarette excise tax collection rose by a meagre 0.5% in 2022 relative to the previous year – less than half of the already-modest increase posted in 2021 – while seven member states experienced drops in tobacco tax revenue. Rising only 5.6% since 2018, cigarette excise tax’s contribution to total EU government revenue has dropped to just over 1% as its marginal gains fail to keep pace with overall tax revenue increases—even before we take into account recent hikes in countries like France.
Moreover, while EU smoking rates have stagnated and its illicit trade has grown, cigarette tax collection has continually declined since 2019, with the ineffectiveness of the bloc’s track and trace system contradicting the dubiously positive assessment in a recently-published study led by former DG SANTE official Filip Borowski and prompting well-founded probes into operator Dentsu’s ties to Big Tobacco.
Dentsu under Parliamentary microscope
As the OCCRP and the TCRG have separately exposed, Dentsu—through its 2017 acquisition of Blue Infinity—has inherited the digital technology used in the Codentify track and trace system, created by the tobacco industry. No wonder, then, that the TCRG has concluded that the tobacco industry has been largely successful in minimizing the independence of the EU track and trace system, required under the WHO Illicit Trade Protocol.
The curtain is steadily being lifted from the industry’s relentless efforts to influence European tobacco control measures including track and trace systems. Over the past year, MEPs, led by the late Michèle Rivasi, have increasingly spotlighted a potential conflict of interest involving Dentsu’s hiring of former DG SANTE official Jan Hoffman, who had worked at the Commission on tobacco traceability, shortly after the company’s selection in the track and trace system’s opaque tender process.
Interestingly, just three months after Rivasi exposed the Hoffman-Dentsu affair, Filip Borkowski – who had served above Hoffman as Deputy Head of Unit in DG SANTE – suddenly assumed a case handler position in DG CNECT, a directorate whose Joint Research Centre had already promoted the Codentify system. After MEPs Rivasi, Anne-Sophie Pelletier and Pierre Larrouturou submitted an initial Parliamentary question to the Commission regarding Hoffman-Dentsu and transparency concerns last May – eliciting a glib written reply from the EU executive – Larrouturou managed to convene a group of nearly 40 MEPs to sign on to a subsequent question in November.
Crunch time for EU tobacco control
While awaiting an oral answer from the Commission, the Parliament is holding an 8 February debate on the Dentsu scandal within the broader context of the Commission’s poor transparency regarding its interactions with tobacco industry lobbyists – a long-running issue repeatedly flagged by European Ombudsman Emily O’Reilly in recent months. In response to O’Reilly’s conclusions, the EU executive has announced an investigation into its exposure to Big Tobacco influence late last year. Yet in January, the Commission once again defended its transparency record despite the Ombudsman’s evidence to the contrary, after which O’Reilly issued a follow-up letter doubling down on her demands.
With five months before the Ombudsman’s next evaluation, the Commission will need to take quick, robust action to meaningfully address Big Tobacco interference, which has potentially contributed to the delay of the EU’s Tobacco Products and Tobacco Taxation Directives revision. In the crucial months following the Panama-hosted COP10/MOP3 conferences and as the European institutions are reshuffled following the upcoming elections in June, Brussels policymakers must effectively reorient the bloc’s approach in line with the WHO-led global tobacco control agenda.
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