Nicosia, Cyprus. Cyprus kiosk owners warned the finance ministry that proposed EU tobacco excise increases could significantly raise prices and increase smuggling from the north. The warning was delivered in a meeting with the customs department on Friday.
Price impact and market concerns
The kiosk owner’s association, Sykade, said the EU’s planned excise hikes could push the price of a pack of cigarettes from €4.50–€5.00 to €7.00–€7.50 and rolling tobacco from €7.00 to €13.00. Sykade said the changes would cause irreparable damage to the legal market and affect consumer behaviour.
Sykade said that “each new increase in taxes inevitably leads to a loss of income, jobs and state revenue.” It added that 50 per cent of kiosk revenue comes from tobacco products and that higher prices would encourage smuggling, business closures and unemployment.
Smuggling estimates and enforcement proposals
Sykade estimates that 13 per cent of cigarettes and 53 per cent of rolling tobacco are already smuggled from the north, causing annual losses exceeding €50 million. The association called for stricter penalties for illegal trade and the modernisation of customs controls at roadblocks.
EU proposal and public health goals
The EU proposal would bring e-cigarettes, heated tobacco and nicotine pouches under excise taxation for the first time, which Sykade said would double their prices. EU ‘clean growth’ commissioner Wopke Hoekstra said the reform is intended to reduce smoking rates below five per cent by 2040 and could save nearly €6 billion in healthcare costs.
Call for an exemption
Sykade urged the government to seek an exemption, citing the island’s division and difficulties in controlling smuggling.
How do you think higher tobacco prices would affect consumer behaviour and illegal trade in Cyprus?