EU States, Including Estonia, Propose Tighter Cross-Border Alcohol and Tobacco Limits

EU Members Seek Stricter Import Regulations

A coalition of European Union member states, including Estonia, has proposed amending existing EU legislation to introduce new, tighter limits on cross-border imports of tobacco and alcohol. The move is designed to combat illicit trade, protect national revenues, and reinforce public health objectives across the bloc. Discussions on these potential changes took place at an early-December meeting concerning the revision of the Tobacco Taxation Directive (TED).

Denmark, currently holding the EU's Council presidency, tabled the proposal, which focuses on revising Article 32 of the Excise Duty Directive. This article currently regulates the quantities of excise goods individuals may import for personal use from one EU country to another.

Addressing 'Cross-Border Shopping' and Illicit Trade

The primary motivation behind the proposed amendments is to curb 'cross-border shopping,' a practice where consumers purchase tobacco and alcohol in member states with lower taxes to bypass higher domestic prices. This practice is seen as undermining national anti-tobacco and anti-alcohol measures, leading to significant revenue losses for higher-taxing countries, and negatively impacting public health policies.

Currently, individuals can import substantial quantities for personal use without commercial implications, such as:

• 800 cigarettes, 400 cigarillos, 200 cigars, or 1 kilogram of smoking tobacco.
• 10 litres of spirits, 20 litres of alcoholic beverages less than 22% alcohol by volume, 90 litres of wine (with a maximum of 60 litres of sparkling wine), and 110 litres of beer.

Estonia's Strong Support for Reduced Limits

Estonia is among the countries that have expressed clear support for reducing these quantities. Alongside Belgium, the Czech Republic, and Finland, Estonia advocates for a review of Article 32. Furthermore, Estonia, Finland, and Germany have reportedly pushed for any amendments to Article 32 to extend to alcoholic beverages, not just tobacco products.

Other nations open to a review of Article 32 include Austria, Hungary, Ireland, Latvia, France, Slovenia, Bulgaria, and Malta. The European Commission, however, has shown some hesitation, suggesting that a review of Article 32 might not be appropriate as part of the Tobacco Taxation Directive discussions, given its broader application to both tobacco and alcohol.

Implications for Public Health and Revenue

The proponents of stricter limits argue that the current allowances make tobacco and alcohol more affordable and accessible, thereby jeopardizing the public health benefits of increased taxes and other control measures in individual member states. The ability of consumers to easily acquire cheaper products across borders can invalidate national efforts to reduce consumption. The proposed legislative changes aim to create a more harmonized approach that supports national fiscal and public health policies more effectively.