If the EU, regulation of heat not burning cigarettes as “novel smoking tobacco products” is unlikely but should not be discarded, completely. Considered as a smoking product, heat not burning could not be released with the flavors that are allowed for a smokeless product, for example. Provisions under this category may also include plain packaging and restrictions on emissions (CO, tar and other substances).
Hence, as a “novel smokless tobacco products” we could imagine that a 20 pack of Marlboro HeatStick (or TEEPs) would be available in different flavors including menthol, with a packaging showing the brand and a health warning pointing out possible addictiveness (according to Article 12), while a 20 pack of combusted Marlboro cigarettes comes now in the sole tobacco flavor, a plain packaging combining an ugly image and text health warnings that indicates it may kill you without any mention of the brand, even not a logo.
Advertising on printed supports, on internet, television and radio is regulated by a EU directive from 2003 and includes a ban on cross-border tobacco product advertising and sponsorship in these media. The directive extends the ban to the free distribution of gifts and the sponsorship of events that involve one or more member states and the free distribution of tobacco. ECigIntelligence experts believe that there may be some weaknesses in the EU provisions on advertising that may allow such heat not burning products to be visible in the media. By advertising the iQOS itself but not the tobacco HeatStick, advertising should not fall outside the legal frame.
Taxation of such tobacco products has not yet been decided at the EU level. For cigarettes, EU legislation only set harmonised minimum rates: a specific component of between 7.5% and 76.5% of the total tax burden (expressed as a fixed amount per 1000 cigarettes) and an ad valorem component (expressed as a percentage of the maximum retail selling price). The overall excise rate must be at least €90 per 1000 cigarettes or at least 60% of the weighted average retail selling price. Excise duty of €115 or more, however, do not need to comply with the 60% criterion.
Member States are free to apply excise duty rates above these minima, according to their own national needs. Currently, manufactured tobacco products fall under four categories: Cigarettes, cigars and cigarillos, fine cut smoking tobacco (intended for the rolling of cigarettes) and other smoking tobaccos. None of these categories seems to concern tobacco HeatSticks, mainly because they may not be “smoked” but just heated by the iQOS.
A Marlboro HeatStick shouldn’t be taxed as much as its combustible counterpart, on a pro rata basis of the amount of tobacco it contains and also because it is promoted as harm-reduction. Can theses taxes on heat not burning devices be lower than those for e-cigarettes? ECigIntelligence anticipates that anomalies in the treatment of products containing tobacco and e-cigarettes may well take the taxes on heat not burning devices even lower in Europe than those for vaping products.
Since they are sold and promoted as harm-reduction products, the regulatory regime is supposed to provide them with a financial advantage compared to combustible cigarettes and to be levelled on the taxes applied to nicotine e-liquids. For the latter, the experience shows that many states already thought about a way to apply excise duties with a lot of originality. In a case study, Italy can certainly be awarded for the most complex equation to tax e-liquid, but how did the AAMS ruled for heat not burning cigarettes?