EU delays key tobacco tax vote until after Swedish election

BRUSSELS — The EU has delayed a key vote to hike tobacco and nicotine taxes until November to allow extra time for Sweden to form a new government after its national election on Sunday.

Stockholm has emerged as the main holdout against the Commission’s proposal to raise levies on cigarettes, vapes and other nicotine products.

The tax hikes are designed to wean smokers off cancer-causing tobacco while also preventing younger people from taking up addictive nicotine products, which affect brain development in teens and increase cardiovascular risks.

The European Commission proposed increasing levies on cigarettes and setting minimum rates on newer products like vapes, heat-not-burn tobacco and nicotine pouches in July last year.

The plan has become a flashpoint for Sweden, which has a long tradition of using snus — a pouch of tobacco that sits between the gums. As such, Stockholm has strongly opposed raising taxes on similar nicotine pouches.

Delaying the vote gives extra time for Sweden to appoint a new finance minister and for the capitals to negotiate a way out of the current stalemate.

The Irish presidency of the Council of the EU, which is steering the talks, confirmed the vote has been pushed from October to November’s ministerial meeting.

Four diplomats granted anonymity to speak candidly about the sensitive negotiations said the postponement is meant to give Sweden’s next government extra time to change its mind.

A spokesperson for the Irish presidency said they will “continue[s] to engage bilaterally with the aim of securing unanimous political agreement at the November ECOFIN” meeting of finance ministers.

Pushing for a deal

The original plan was to vote on the latest text on Oct. 9 — just over one week after the new Swedish parliament is convened.

But negotiations to form a new government in Sweden took one month after the last election in 2022. Given the precedent, the diplomats said there’s little chance Sweden will change its mind before Oct. 9, as the outgoing minister has no mandate to make commitments on behalf of the government.

“If Sweden’s minister says that it doesn’t have a mandate to approve the legislation [in October], then it’s over,” said a senior EU government official. As with all tax files, the so-called Tobacco Taxation Directive requires unanimity.

While other countries besides Sweden oppose the legislation for different reasons, Stockholm’s resistance is seen as the most serious stumbling block, said two of the EU diplomats with knowledge of the discussions.

With elections looming, Swedish politicians across the political spectrum have campaigned against the EU’s plan to hike taxes on nicotine pouches. The topic is particularly sensitive in Sweden, where nicotine pouches are firmly embedded in the national culture.

“Other countries do not get to decide over our snus,” wrote Swedish finance minister Elisabeth Svantesson in June.

Help or harm?

The EU executive initially suggested taxing pouches at either 25 percent of the retail price or €71.50 per kilogram. That would mean a steep price increase for consumers in Sweden, where the national levy is only €18.36 euro per kilogram. 

Sweden counters that its low tax rate should be applied across the bloc, arguing that nicotine pouches have helped drive down the smoking rate.

EU government officials will meet on Sep. 14 — the day after the Swedish election — to discuss the details of the latest compromise proposal, which has renewed a long-running debate over the so-called Swedish experience.

Supporters of nicotine pouches say the plan to raise taxes limits smokers’ ability to access a less harmful product that can help them quit cigarettes.

Tobacco and nicotine companies frequently cite Sweden to demonstrate the success of alternative nicotine products like snus and pouches as a smoking cessation tool. Snus is illegal in all EU countries except Sweden, which won an exemption when it joined the EU.

The proportion of Swedes who smoke daily has fallen dramatically from just over 30 percent in 1980 to 5 percent in 2024.

Up until the current government, there was “no acceptance of a harm reduction or harm minimisation approach,” said Karl Fagerström, a researcher on tobacco and nicotine who has received consulting fees from tobacco companies. He said he was not against taxes on nicotine pouches as long as the levies on cigarettes are higher.

However, the Public Health Agency of Sweden, an arm of the government, pointed to tobacco control policies including bans on tobacco advertising, tax regulation, age limits and smoking bans for how Sweden achieved its low smoking rates.

“The decline in cigarette use has been going on for a long time, and to date, there is no scientific evidence that recent changes in the use of snus and nicotine pouches have contributed to this decline,” said the agency in a statement.

Anti-smoking campaigner Helen Stjerna, secretary-general of the non-profit A Non Smoking Generation, said the government’s position was a “tragedy” given Sweden’s historically strong stance on tobacco control. “We’re really going backward. All these things we’ve been doing for decades, it’s all forgotten,” she said.

The issue is also controversial across the bloc with EU countries such as France banning nicotine pouches for public health reasons and stirring a diplomatic row with Sweden.

The World Health Organization has warned countries not to follow Sweden in its permissive approach toward nicotine pouches. It frames nicotine pouches as an attempt by tobacco companies to create a new generation of nicotine addicts as cigarette sales fall.