An ideological plan against freedom that damages the Italian economy, enriches criminal networks, and punishes consumers.

The Milton Friedman Institute firmly denounces the proposal put forward by European Commissioner Wopke Hoekstra to revise the Tobacco Excise Directive (TED), which, under the pretext of EU tax harmonisation, seeks to impose a massive and uniform increase in minimum excise duties on all nicotine-containing products.

This measure would not only affect millions of European consumers but would also have devastating consequences for the Italian economy and other member states. Italy is the largest producer of tobacco in the European Union, accounting for over 27% of total production, concentrated in the regions of Campania, Umbria, Veneto, and Tuscany. The sector directly involves over 25,000 agricultural workers and 4,400 employees in tobacco manufacturing. Italian tobacco product exports grew by 5.8% in 2023, confirming the strategic value of the industry.

The European Commission is proposing a 139% tax increase on cigarettes and a 258% increase on rolling tobacco, while also introducing new minimum tax rates for alternative products such as e-cigarettes, heated tobacco products (HTPs), and nicotine pouches. Additionally, the proposal sets a minimum tax of €143 per kilogram for nicotine pouches, representing a 790% increase compared to current rates in Sweden.

Hoekstra’s proposed excise hike would reduce legal market demand, shrink production, and jeopardise thousands of jobs. As prices increase, the door would open wide to the shadow economy and organised crime, with a guaranteed loss of tax revenue for most EU countries.

Where similar policies have already been implemented, the results are evident: in France, where excise duties are among the highest in Europe, 33% of the tobacco market is now illegal. In the Netherlands, under Hoekstra’s own tenure, the share of contraband cigarettes rose from 15% to 25% in just two years. In Italy, a similar outcome would deal a severe blow to the legal economy and hand enormous advantages to criminal organisations.

This plan represents the fiscal face of prohibitionism and would benefit only criminal networks while stripping citizens of their freedom of choice and depriving the state of valuable resources.

Adding to this, there is the absurdity of heavily taxing reduced-risk alternative products, which are essential tools in harm reduction strategies.

The Institute welcomes the position taken by the Italian government, which has already formally expressed its strong opposition to the proposal to the European Commission. We hope the government will remain firm and work to build a political alliance with other member states to stop the Hoekstra plan.

The ideological and technocratic nature of the Hoekstra proposal is extremely harmful. It seeks to impose a one-size-fits-all tax model, disregarding the deep economic and social differences among member states. This approach is a direct attack on the principle of subsidiarity and the right of each country to define its own fiscal policy. Forced tax harmonisation is a centralising drift that undermines the foundations of a Europe of nations.

The Commission’s decision on the Hoekstra plan is expected by mid-July. We call on Italy and other member states that have already expressed opposition to block this harmful taxation, which would negatively impact the production chain, public health, consumers, and individual freedoms

Defending individual freedom, fiscal independence, and national sovereignty means protecting citizens, businesses, workers, and consumers. It also means promoting a model of Europe that values differences instead of erasing them with counterproductive policies.”