By Timothy S. Donahue
Europe’s next wave of tobacco and nicotine rules are coming fast. During a panel session at InterTabac 2025 in Dortmund, Germany, on Sept.19, an audience of manufacturers, retailers, and compliance leads heard a clear message: Companies must plan for harmonization where they can, and unpredictability where they must, in order to navigate the new rules.
The session, “Navigating the TPD3, Tobacco Excise Directive and WHO FCTC COP11,” was moderated by Robert Sidebottom, Global Institute for Novel Nicotine (GINN) regulatory and compliance chair; managing director, Arcus Compliance, with Tim Phillips managing director, Tamarind Intelligence, Ciprian Boboi, founder and board member, Independent European Vape Alliance (IEVA), and Peter Schweinschwaller, president, European Confederation of Tobacconists (CEDT), on stage.
Sidebottom opened by laying out the structure of the panel and an “opening round,” then a “thematic deep dive” across compliance, cross-border issues, retail developments, and market evolution, plus a short lightning round. He encouraged an open forum, allowing questions to be asked “during the actual panel briefing,” not just at the end.
Combustibles are still king
Phillips outlined the commercial landscape. Drawing from a decade of market analysis that started’ with the last TPD,” he said novel nicotine products- such as heated tobacco, vaping, and pouches– now generate over $80 billion annually. “Put that into context,” he added: “the combustible cigarette market… is worth about $800 billion a year. So this sector… is still only 10% of that, but it is the 10% that is growing very quickly.” Among these, pouches—worth “between $7.5 and $8 billion”—remain “the smallest part… but… the fastest growing,” expanding far beyond its Nordic origins into the UK, U.S. and beyond.
That growth faces a patchwork of regulations. Boboi said IEVA continues to argue for differentiation and harm reduction as core principles. “Vaping is harm reduction… and can help over 100 million smokers” across Europe “switch to less harmful alternatives and eventually… quit nicotine.” The alliance’s “mantra,” he said, is simple: “the solution is differentiation—very clear, through regulations [and] taxation.” The practical challenge, he added, is that “messages are mixed,” with “the scientific world or medical world” not yet providing “enough support” to change policy on a large scale.
Retailers, meanwhile, are already in the middle of the transition. Schweinschwaller—who stressed he is “a retailer myself”—described stores juggling shrinking cigarette sales, divergent national rules for new categories, and frequent rule changes that make planning difficult. What do shops need most? “Stability… so we can adapt… and do our jobs, to bring [choice] to the customer.”
Compliance, excise harmonization could help
On compliance, Schweinschwaller reiterated the retailer’s request: “stability and dignity.” Frequent changes in rules—“six months later, oh, no, you cannot sell it anymore, or it’s too expensive”—hinder sensible investment in fixtures and training. Sidebottom agreed that clear, lasting rules are essential for effective compliance systems.
Phillips addressed the issue of taxes directly. He doesn’t see excise taxes as the main threat. “One of the biggest threats… is the illicit trade and the lack of … regulation,” he explained. A unified EU approach “is probably a good thing,” he argued—but levels matter. Minimum rates for pouches proposed in the draft Tobacco Excise Directive appear “pretty much higher than nearly every country that currently applies tax,” which could backfire.
Still, if excise leads finance ministries in enforcement, “enforcement really tightens up quite fast,” he said, noting Tamarind’s new global enforcement tracker shows actions “going upwards.”
Boboi welcomed harmonization but warned that the design of a tax is as important as the rate. His red flag is ad valorem proposals that he explained are “for a mature market… not when you have 10,000 small” firms and a dynamic category.
“Don’t [impose] something you can’t control.” He pointed to Italy’s experience. After a punitive liquid tax produced far less revenue than forecast, successive reductions to €0.10/ml “actually” increased collections—“the red line example,” he said. The lesson, said Boboi, is that excessive taxes and tight restrictions push markets underground, while calibrated differentiation supports both revenue and harm-reduction aims.
When rules diverge, the market adapts around them
Schweinschwaller outlined the cross-border situation from the perspective of enforcement. With pouches or vapes outright banned in some EU countries and strictly limited in others, consumers often travel or order online. Austria benefits when neighboring bans backfire (“you can imagine how happy the retailers are on the Hungarian [border]”), but he said it’s “not very good for the market.” Sidebottom said that the main risk is that consumers “will find a way to access” the product. The market will likely move towards illicit products.
Phillips stated that the upcoming TPD and the Tobacco Excise Directive will set the direction. The Commission seems “pretty against the category” on certain issues—he highlighted early pouch tax ideas—but politics are not uniform, and Nordic support for pouches provides a counterbalance. He anticipates the excise tax rules “to go through” numerous negotiations “around rates,” driven by the EU’s “appetite for tax… because it needs money.” Regardless of the final form, he believes there will be a push for the development of consistent controls (possibly track-and-trace-like tools) so retailers can identify compliant products.
Boboi emphasized how divergent national policies drive gray and black markets. In Denmark, he said, data shows that “80% of the vaping market is coming from the black market” after restrictions; in the Netherlands, “drug dealers… are selling vapes,” upselling other substances. Harmonized, evidence-based rules—with clear distinctions between combustibles and non-combustibles—are, in IEVA’s view, the only sustainable way forward.
Retail and the need to self-police
Asked whether new formats are cannibalizing each other or simply expanding choices, Phillips said the answer is “both.” Consumers “are multi-using” across pouches, vape, and heated tobacco—and “a lot of them are using combustible products” alongside next generation products. The innovation cycle is still early: “We’ve barely even started,” and “there will always be… products that certain consumer segments want.”
That dynamism comes with a reputational cost if the category doesn’t self-regulate. Boboi urged vendors to “take care of innovation” but keep communications focused on adult smokers; Sidebottom bluntly noted that an industry “with millions of cans of nicotine pouches” with youth-oriented designs lacks credibility with the medical community and regulators.
Schweinschwaller said tobacconists can be part of the solution: keep new products in-store, perform age checks even when not legally required, and maintain a responsible presence at retail.
The case for harm reduction
Harm reduction was a recurring theme throughout the hour. Boboi began with the principle—“vaping is harm reduction”—and argued that “the big change will come” when “the medical world” engages with the evidence. However, Phillips offered a pragmatic caution: “The concept of harm reduction is [currently] dead” as a political message in Brussels … “governments are not thinking around harm reduction” but instead focus on how to make the sector “exist” within or alongside tobacco law. That doesn’t mean stop, he said: “Gradually things will change,” and the industry should “keep banging the drum.”
Schweinschwaller agreed that the political headwinds are real. When he meets lawmakers, he begins with “I represent 120,000 small family-run businesses,” and saves “the word tobacco” for last “because whenever I mention it, [they] flinch.”
Boboi divided policymakers into three groups: those who are pro-harm reduction, those who are anti-harm reduction (who “don’t even want to debate”), and a large middle group for whom the topic is “too controversial.” For that middle group—along with clinicians and the public—more effective approaches might be clearer product oversight, moderate taxes, and strict enforcement against illegal supply, which could be more convincing than abstract arguments alone.
Final takeaways
In a quick lightning round, Schweinschwaller’s ask was simple: stability so shops can invest, educate, and enforce age checks consistently. Boboi’s one-liner to policymakers: “Don’t regulate reduced-risk products like cigarettes.” He linked that to Europe’s goal of reducing smoking prevalence to 5%. Phillips’ closing advice was operational: this is a huge opportunity, but one that’s volatile. Strategy must be based on real-time data on markets and regulations to avoid preventable mistakes.
Sidebottom’s wrap connected the themes seamlessly. Nicotine pouches “are the future for the category,” he said—but industry must “self-police,” call out bad actors, and prepare for a U.S.-style dynamic in Europe, where some firms launch after 180 days if filings are strong and authorities delay in responding to submissions.
Most importantly, he argued, the sector will need to educate consumers, regulators, and clinicians “about what pouches actually are, what they mean, [and] what the risk profile really is.” Only then will TPD3 and the excise directive debates move beyond noise to lasting, workable policies.
