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Higher cigarette prices due to an excise tax hike has led a growing number of Dutch consumers to buy their cigarettes from abroad or the illicit market. Photo credit: Pxhere.
Research conducted by the Netherland’s finance and health ministries indicate that while higher taxes on cigarettes are prompting more people to quit smoking, it is also leading to an increase in smuggling.
Every two years, researchers collect discarded cigarette packets from the streets to analyze smoker behavior in the Netherlands.
During the last survey in 2021, 15% of the empty packets contained cigarettes that had evaded Dutch tobacco duties. This figure rose to 25% in the most recent survey, as reported by the ministries.
The findings reveal that nearly 19% of the cigarettes were purchased from shops in other countries, while 4% were either counterfeit or illegally smuggled. Comparatively, two years earlier, only 1% were identified as fake or illegal.
According to research conducted by the public health institute RIVM, smokers in the Netherlands acquire approximately 10% of their tobacco from abroad, either through personal importation or by enlisting others to do so.
The study, which conducted two surveys in 2023 before and after the excise tax hike, further indicates that price increases serve as an added motivation for smokers to quit, with health considerations remaining the foremost reason. Of those surveyed by RIVM, 28% reported making attempts to quit smoking, with 10% able to quit completely and 18% reducing their consumption. A significant 53% of smokers who have either attempted or successfully quit identified increased costs as a contributing factor influencing their decision. Further findings from the research indicate that those who attempted to quit smoking had already intended to do so even before the excise duty increase.
On average, people started buying more tobacco products abroad where prices were significantly lower, such as in Germany and Belgium. Notably, smokers who reported increased cross-border purchases were not exclusively from border regions. It is estimated that following the excise duty increase, there has been an absolute increase of 10 to 11% in tobacco product purchases abroad.
Earlier this year, the price of a packet containing 20 cigarettes rose by nearly one euro to approximately €11.10, as part of additional government efforts to deter smoking.
Similarly, the price of rolling tobacco increased by €3.60 to about €24, with further hikes anticipated. According to figures from the finance ministry, the tax on cigarettes now totals approximately €7.81 per pack.