Significant price increases for tobacco products are expected in the coming years as the European Commission advances plans to revise the directive that sets excise taxes on tobacco products. According to the proposal, which was recently discussed at the EU Finance Ministers Council (ECOFIN), a 139% increase in excise tax is planned from 2028, rising from the current €90 to €215 per 1,000 cigarettes.
Cigarettes: price increases set to reach €7 per pack
This means that the final price of a pack of 20 cigarettes –which currently costs around €4.60 in Greece, of which €3.74 are taxes (81.3% of the price)– could reach or exceed €7, provided tobacco companies don’t absorb part of the increase.
Corresponding charges are also planned for alternative tobacco products. For heated tobacco products, the minimum excise tax is expected to increase gradually from €88 to €155 per 1,000 pieces, while for e-cigarette liquids the tax will rise from the current 10 cents per milliliter to 36 cents.
The Commission defends the directive revision, emphasizing that the current framework has remained unchanged for 15 years and that the main objective is protecting public health. However, the tax increase is also linked to EU budget needs, as new revenue sources are being sought for the European Union.
During last week’s ECOFIN meeting, Greece’s Finance Minister Kyriakos Pierrakakis requested a longer transitional period to avoid sudden market and consumer shock. He also highlighted the risk of reigniting smuggling, as excessive taxation creates fertile ground for international networks trafficking illegal tobacco products.
According to KPMG’s 2024 annual report, illegal cigarette consumption in Greece dropped to its lowest level in a decade, reaching 17.5% of total consumption, down from 23.7% in 2023. An estimated 2.5 billion illegal cigarettes were consumed, resulting in public revenue losses of €438 million – significantly reduced compared to €620 million the previous year.
