Tobacco prices: industry lobby leads the offensive in France

On March 17, 2021, the Institute for Economic and Fiscal Research (IREF, or the Institute), a think tank neoliberal, publishes a study funded by Philip Morris France entitled “Rethinking the taxation of new tobacco and nicotine products to combat smoking”. This publication, relayed by Les Echos without mentioning its funder, although presented as representing "the independent point of view of the think tank", turns out to be a plea in favour of a paradigm shift on the taxation of tobacco and nicotine products, which is part of a concerted offensive by the tobacco industry in terms of tax regulation.

IREF: a think tank with the air of a front group

The IREF presents itself as a think tank – or think tank – a European liberal think tank. Created in 2002, it positions itself, in its own words, as being “for economic freedom and tax competition.”[1]. The Institute, which claims to be "independent of any political party or organization," seeks to influence public debate, particularly on economic and fiscal issues. It is in line with neoliberal organizations, working in favor of the business world, a drastic reduction in state intervention and general tax relief. On its website, the think tank formulates ten reform proposals, including the abolition of civil service status, the privatization of social housing, the opening of health insurance and unemployment insurance to competition, and the elimination of public subsidies to unions.

It is now chaired by Philippe Delsol, a tax lawyer at the company Delsol Avocats, which, according to Wikiliberal, "provides advice and support to many French people wishing to transfer their home abroad."[2]In 2019, Philippe Delsol published his latest book, In Praise of Inequality.

An organization with opaque funding

While the Institute aims to influence the debate and public decision, no information is given by it on the question of its funding, which is exclusively private. In their latest edition of 2017, the European Observatory of think tanks evaluates French think tanks based on several criteria, such as governance or transparency. For this last criterion, IREF ranks last out of 53 think tanks, with the lowest rating that can be assigned[3].

The opacity of a think tank on its funding is particularly problematic, since it prevents the identification of possible links and conflicts of interest that it may face, and casts doubt on the independence of its publications, which may be subject to corporate interests. In other words, it is accepted that the level of transparency of a think tank is a good indicator of his real level of independence[4].

A pro-tobacco industry position

On the tobacco issue, the Institute has published several articles, all devoted to the issue of tax increases. Not surprisingly, the think tank ultraliberal vigorously opposes tax policies in the area of public health, taking up the main arguments used by the tobacco industry itself. Thus, according to the IREF, tax increases would be part of a "paternalistic" logic, the effects of which would be "counterproductive"[5], since their sole consequence would be to boost illicit trade. Thus, instead of reducing tobacco consumption, price increases would result in a reduction in tax revenues.

Who is the author of the study?

The study in question was written by Patrick Coquart, who presents himself as an "expert in human resources and management"[6]. With a Master's degree in Social Policy, he has no particular expertise in tobacco or taxation, and, to our knowledge, has no previous publications to his credit on the issue of tobacco. A regular contributor to the liberal newspaper Contrepoints, Patrick Coquart positions himself more as a "consultant in management, human resources, social relations and communication"[7], but also as a penholder for "organizations, companies, individuals to help them produce original editorial content." On his blog, Patrick Coquart engages in very personal analyses of current events, comparing the ecological proposals of the Macron five-year term to Nazi and Soviet totalitarianism.[8], and the Real Estate Wealth Tax (IFI) to a “massacre of owners” and a “spoliation worthy of the USSR”[9]. Finally, Patrick Coquart is also an “associate researcher” for the Molinari Institute, think tank identified by GST as a front group dedicated to the defense and promotion of the interests of controversial industries, such as the tobacco or hydrocarbon industries.

What does the study say?

Although this study was "carried out with funding from Philip Morris France", the mention of the cigarette manufacturer's participation in its development only appears at the end of the document, and is not indicated in the Echos newspaper, which nevertheless reported its main conclusions.

According to the author of the study, public health policies, particularly through tax increases applied over the last two decades, have limited effectiveness, as demonstrated by the supposedly poor figures for tobacco consumption in France. The study suggests the need to base public policies on "risk reduction" rather than on "prohibition, taxation and blaming consumers". Thus, this risk reduction would be embodied by new tobacco and nicotine products, certified by the management consultant as an effective way to combat smoking.

Therefore, given their supposedly lower harmfulness, Patrick Coquart advocates preferential taxation for new tobacco and nicotine products, in order to encourage a shift in consumption towards these new devices, similar to French taxation policies designed to promote the development of electric cars. Furthermore, the study highlights the need to set up an "independent scientific committee" to assess the harmfulness and "benefits" of tobacco and nicotine products, by assigning them a "Noci-score", similar to the Nutri-score for the food industry. The assessment of the levels of harmfulness of products is then intended to be used to determine the levels of taxation. However, this independent scientific committee should not be composed solely of doctors and tobacco control bodies, but should include "as many points of view as possible", including tobacconists, or "experts from the tobacco industry" (sic). Finally, the IREF proposes to block any increase in taxation and any change in regulation for the next five years. Unsurprisingly, this suggestion is officially motivated by the need to preserve the purchasing power of the poorest, or to combat illicit trade.

Analysis of the study

This document, based on inaccurate postulates, multiplying approximations, errors of interpretation and untruths, is more in the realm of propaganda than of scientific study, as can be seen by analyzing its main points.

I. Are tax increases ineffective?

Much of the reasoning of the think tank is based on the premise that public health policies, embodied by tobacco tax increases, are ineffective. In reality, all independent scientific research agrees that tax increases remain the most powerful lever for reducing tobacco consumption in a population.[10]To be effective, these increases must be significant, repeated and uninterrupted, and accompanied by additional measures, in particular assistance with withdrawal (reimbursement of care, nicotine patches, awareness campaigns, etc.). think tank also illustrates the ineffectiveness of tax increases by the increase in smoking prevalence observed in France between 2005 and 2010, while this period was precisely characterized by a tax freeze on tobacco products. The implementation of the taxation campaign in France made it possible to reduce smoking prevalence by 5.4 points between 2016 and 2019, going from 29.4% to 24%[11].

II. Do tax increases generate illicit trade?

On numerous occasions, the study points out the supposedly counterproductive nature of tax increases, accused of encouraging illicit trade, and in particular, counterfeiting. For the author, the application of high taxation even tends to encourage insecurity, crime and terrorism. These arguments have no scientific validity, since studies show no correlation between taxation levels and levels of illicit trade.[12][13]. Furthermore, the study, funded by Philip Morris France, fails to mention that the tobacco industry is still massively involved today in the organization and facilitation of global illicit trade.[14]. There is a growing body of evidence that demonstrates that organized cigarette smuggling benefits many criminal and terrorist organizations and contributes to the destabilization of entire regions, such as West Africa.[15]. Illicit trade levels are also largely overestimated by the tobacco industry to dissuade policy makers from increasing taxes. In France, illicit trade is estimated at 6% of the national market.[16], while counterfeiting levels are residual (0.2%), according to cigarette maker Imperial Brands' own internal quantitative study[17].

III. Do tax increases penalize the poorest?

For the author of this study, tax increases would be regressive and would penalize the poorest in particular. Once again, scientific studies demonstrate the opposite. Tax increases are in fact all the more effective in reducing the prevalence of smoking among young people and working-class groups, who are more sensitive to the price argument. While disadvantaged populations are the first victims of smoking, tax increases thus contribute to repairing a social inequality in public health.

IV. Electronic cigarettes and heated tobacco: risk reduction tools?

While the author of this study makes a distinction between new nicotine products (electronic cigarettes) and new tobacco products (heated tobacco), she does not differentiate between these two types of products, which are presented as risk reduction tools.

The electronic cigarette: focus

From a public health perspective, however, it is imperative to treat these two types of products separately. Electronic cigarettes are not innovations initially brought by the tobacco industry. While the effects of their long-term consumption remain uncertain, electronic cigarettes do indeed appear to be less harmful than manufactured cigarettes in the short term. Furthermore, the effectiveness of using electronic cigarettes to quit smoking in the long term remains uncertain and needs to be confirmed by well-conducted prospective scientific studies. However, the tobacco industry, through massive investments, is seeking to take control of this relatively recent market, and is deploying large-scale marketing strategies aimed at targeting younger generations, and introducing them to consumption, and thus perpetuating nicotine addiction, the keystone of the economic survival of cigarette manufacturers.

Heated tobacco: focus

Heated tobacco, on the other hand, is an innovation driven by the tobacco industry. Contrary to what the study and the manufacturers claim, no independent study has been able to demonstrate that the consumption of heated tobacco is correlated with a reduction in risks for the smoker.[18]. Some toxic particles are indeed found at lower levels in heated tobacco aerosol than in manufactured cigarette smoke. On the other hand, for other toxic or potentially toxic particles, the levels are higher. According to independent studies, it is likely that the consumption of heated tobacco can cause diseases that the consumption of conventional cigarettes does not cause. In any case, it is established that heated tobacco is "significantly more harmful than e-cigarettes"[19]Ultimately, its consumption comes with a modified risk, not a reduced risk.[20]. In this way, the promotion of heated tobacco is incompatible with public health. Furthermore, heated tobacco, designed to deliver a nicotine level equivalent to that of a conventional cigarette, cannot be considered a weaning tool. Studies also show that the consumption of heated tobacco overlaps that of manufactured cigarettes (among 69% consumers). Finally, heated tobacco would be more of an entry point into smoking (20%), than an exit point (11%). In total, up to 45% of heated tobacco consumers would be non-smokers.[21].

V. Taxation of new tobacco products: a survival issue for manufacturers

The argument of risk reduction is being used by the tobacco industry to seek advantageous taxation for heated tobacco. However, this tobacco, classified in the tax category of "other smoking tobacco products", already benefits from major, unjustified tax advantages compared to manufactured cigarettes.

At 1^er January 2021, a pack of 20 Marlboros costs 10.50 euros at retail. After deducting the various taxes (consumption duties and VAT), as well as the gross discount intended for the tobacconist, this pack brings in 0.67 euros to its manufacturer[22]. If we take a pack of 20 Heets mini-cigarettes, manufactured by PMI and intended for heated tobacco, its retail price on the same date is 7.50 euros. By deducting these same taxes and the share allocated to the tobacconist, each pack of Heets brings in 1.49 euros to the manufacturer. Thus, while a pack of Heets is 29% cheaper than a pack of Marlboros, its profit margin is nevertheless 121% higher.

This calculation helps to understand the tobacco industry's interest in promoting heated tobacco. While it is not a risk reduction tool, it has the potential to generate beneficial benefits for manufacturers, faced with the global decline in tobacco consumption throughout the world.

VI. “Risk Reduction” as a Public Relations Operation and Marketing Strategy

In addition to this commercial dimension, the instrumentalization of the concept of risk reduction by the tobacco industry is a technique that it uses to improve its image and seek to establish itself as a credible public health player with decision-makers and potential consumers. In this way, cigarette companies aim to establish themselves as a partner in the development of public health policies and in the regulatory process. Ultimately, the promotion of these new products aims to bypass current public health measures, which are considered outdated and less effective than the "solutions" proposed by cigarette companies. This is precisely the meaning of the IREF study, which suggests that a tax policy favorable to tobacco products would be more beneficial to public health than tax increases on all tobacco products.

The public health discourse is limited to a public relations operation. In fact, wherever they can, cigarette companies are implementing aggressive marketing strategies designed to promote smoking, targeting in particular young generations.

VII. Proposals contrary to France's international commitments

For the author of the study, public policies must therefore allow tax breaks, in order to "promote reduced-risk products", assimilated to tools beneficial to public health. In reality, in its guiding principles, the WHO Framework Convention on Tobacco Control (FCTC), ratified by France in 2004, highlights the need for different governments to "reduce the consumption of tobacco products in all their forms", including heated tobacco. Furthermore, the legally binding global public health treaty underlines the importance for public policies "not to be influenced by the commercial interests [...] of the tobacco industry", and to "develop appropriate policies to prevent and reduce tobacco consumption, nicotine addiction and exposure to tobacco smoke". In other words, the implementation of tax incentives in favor of heated tobacco products is contrary to France's commitments in terms of public health. These obligations are based on the principle of the existence of a "fundamental and irreconcilable conflict between the interests of the tobacco industry and those of public health".

The proposals of the think tank : opportunity analysis

In conclusion of this study, the IREF puts forward several proposals, considered by the author to be capable of reducing tobacco consumption, which it is interesting to analyze from a public health perspective:

PROPOSITION 1 : An independent scientific assessment to determine the risk of tobacco and nicotine products, and therefore their level of taxation. As said above, the think tank proposes to involve all stakeholders in this committee, smokers, tobacconists and "experts from the tobacco industry", in order to allow the expression of "a maximum of expertise and points of view".

Analysis : This proposal is in contradiction with its official objectives. In other words, the presence of tobacco manufacturers and their allies in this committee would in fact be irreconcilable with its claim to independence. The particularly generous acceptance of this notion made here may call into question the conclusions of this study financed by Philip Morris, but whose think tank assures that it "represents [...] its independent point of view."

The tobacco industry's participation in these types of committees, which is incompatible with the requirements of the FCTC, has the sole purpose of allowing cigarette companies to impose their agenda, delay, block, or evade decisions, and to use the audience that these committees give them to spread their disinformation. Furthermore, their presence on these committees is then exploited, particularly in developing countries, to present themselves as credible partners to public authorities.

PROPOSITION 2 : The allocation of a Noci-score, similar to the Nutri-score for the food industry, to tobacco and nicotine products, based on their dangerousness and their potential “benefits for people’s health”.

Analysis : Such a proposal seeks to encourage consumers to switch their consumption to the least harmful tobacco and nicotine products. This is a false good idea. Unlike the food industry, there are no tobacco or nicotine products that are safe for health. This proposal illustrates the lack of perspective of this study: no other over-the-counter product has levels of danger equivalent to those of tobacco, which therefore require specific and restrictive measures, such as health warnings and illustrations, plain packaging, or the banning of all forms of advertising, promotion and sponsorship. By wanting to transpose the measures of the food industry to tobacco, we deny the latter the unprecedented scale of its impact on public health. However, the normalization and trivialization of smoking is one of the priority objectives of cigarette manufacturers.

PROPOSITION 3 : Implement tax simplification for all tobacco products. think tank proposes in particular to review the tax structures, by giving them only two variables: one based on weight, and one on the dangerousness of the product. The author also puts forward the opportunity to prefer specific taxes to proportional taxes. For the author of the study, the application of this new taxation must be characterized by a general reduction in taxes on tobacco and nicotine products, followed by a tax and regulatory freeze over a period of five years.

Analysis : This proposal by IREF is fully in line with the economic interests of the tobacco industry in general, and those of Philip Morris International in particular. First, reducing or blocking tax levels is a priority issue for the sustainability of cigarette manufacturers: each time such a blockage has taken place in the past, and in particular during the tax moratorium from 2005 to 2011, the decline in consumption caused by prevention measures was stopped and consumption among young people started to rise again.

Furthermore, IREF's request to match taxation by weight rather than by unit is a strategy to obtain advantageous taxation for heated tobacco. If mini-cigarettes are taxed by unit, a pack of 20 Heets is taxed at the same level as a pack of 20 Marlboros. On the other hand, if these mini-cigarettes are taxed by weight, they consequently become less taxed than conventional cigarettes.

Finally, the IREF, by proposing to promote a specific excise, joins Philip Morris' position on the question of the structure of taxes. The specific excise functions as a fixed monetary tax per cigarette, whatever the base price, thereby reducing the price differences between brands, to the benefit of the most expensive, high-end brands.

PROPOSITION 4 : Allowing a tax alignment of heated tobacco, presented by the think tank as a less toxic product, compared to the electronic cigarette.

Analysis : As demonstrated above, no independent study shows that the consumption of heated tobacco presents less risks than that of manufactured cigarettes. On the other hand, heated tobacco is considered to be "considerably more harmful than the electronic cigarette". In the same way, this proposal is contrary to the requirements of the FCTC, ratified by France.

Taxation that would encourage consumers to switch to these new products would result in significant losses in tax revenue. While taxation is intended to discourage people from starting to smoke, it is also intended to offset the major costs to society that the consumption of these products causes.

PROPOSITION 5 : Implement a differential insurance system, allowing insurance companies to take into account the smoking status of individuals. Thus, smokers, with a riskier profile, would see their contributions increase, thus allowing them to “take responsibility”.

Analysis : This measure is in contradiction with the criticism of the IREF, accusing tax increases of penalizing poor smokers. This proposal, if it were implemented, would have the first consequence of considerably increasing insurance costs for smokers. Finally, this measure may appear all the more inequitable since it only addresses smoking on the demand side. For the think tank, the issue of tobacco control rests solely on the smoker, who is solely responsible. However, since tobacco is a market, this study omits the fact that it is also dependent on supply, which is the responsibility of manufacturers. As such, smoking is recognized by all public health stakeholders as an industrial epidemic, that is to say, an epidemic maintained and spread by tobacco manufacturers.

A concerted lobbying strategy in France

The publication of this study, whose postulates and conclusions faithfully reflect the tobacco industry's objectives in terms of taxation, comes shortly after the launch by the Finance Committee of the National Assembly of a fact-finding mission on the "evolution of tobacco consumption and the yield of taxation applicable to tobacco products during confinement and the lessons that can be learned from it". Thus, this mission officially aims to assess the weight of the parallel market in France, and to propose solutions to reduce its phenomenon. In other words, it is the question of the taxation of tobacco products that is targeted by this mission.

At the same time, the tobacco industry is deploying a public relations strategy with French parliamentarians, communicating on the proclaimed explosion of counterfeit products on the French market. As mentioned above, counterfeiting, in France as elsewhere, is at residual levels. The manufacture of tobacco products requires specific equipment and ingredients (machines, boxes, filters, tobacco), the acquisition of which, outside of legal manufacturers, remains suspect. The overestimation of the counterfeiting phenomenon is in reality a strategy of the tobacco industry, intended to divert attention from smuggling, in which cigarette manufacturers are massively involved. Furthermore, counterfeiting allows manufacturers to appear as victims of illicit trade, when they are the main beneficiaries.

The tobacco industry is finally exerting strong pressure on the National Assembly, through amendments brought by deputies identified as being close to the manufacturers, such as Charles de Courson or Lise Magnier. These two parliamentarians thus tabled an amendment in October 2020 proposing a tax reduction in favor of heated tobacco, also promoted as a harm reduction tool, and with a stated concern for public health. Similarly, in November 2018, deputy Christophe Blanchet tabled an amendment, announcing that it was "proposed by Philip Morris" and aimed at better combating the phenomena of street sales and counterfeiting in large cities, which are singled out for maintaining a climate of insecurity.

Thus, all of these observations lead us to believe that the tobacco industry is implementing a concerted lobbying strategy with the aim of obtaining advantageous taxation for its heated tobacco products, within the framework of the next revision of the European Directive on tobacco products, of which the IREF study is one of the manifestations.

[1] IREF, Presentation and expertise, 05/03/2013, (consulted THE 31/03/2021)

[2] Wikiliberal, Jean-Philippe Delsol, (accessed 31/03/2021)

[3] European Think Tank Observatory, France of think tanks. Results and analysis of the “think tank and transparent France 2017” label, December 2017

[4] L'OBS, Montaigne Institute, Terra Nova, Iris… Who funds think tanks?, November 19, 2013, (accessed 03/31/20121)

[5] Challenges, Tobacco: why increasing taxes is counterproductive, January 4, 2017, (accessed 03/31/2017)

[6] The pen without the mask, Patrick Coquart's blog, Who am I? (accessed 31/03/2021)

[7] Molinari Institute, Patrick Coquart, (accessed 31/03/2021)

[8] The pen without the mask, Patrick Coquart's blog, Macronian youth are “On the Move”, (accessed 31/03/2021)

[9] The pen without the mask, Patrick Coquart's blog, The massacre of landlords in Mr Macron's France, (accessed 31/03/2021)

[10] Bader P, Boisclair D, Ferrence R. Effects of tobacco taxation and pricing on smoking behavior in high risk populations: a knowledge synthesis. Int J Environ Res Public Health. 2011;8(11):4118-4139. doi:10.3390/ijerph8114118

[11] BEH Public Health France - 2020

[12] Chaloupka FJ, Straif K, Leon ME. Effectiveness of tax and price policies in tobacco control. Tob Control. Published Online First: 29 November 2010. doi:10.1136/tc.2010.039982

[13] Joossens L, Raw MCigarette smuggling in Europe: who really benefits? Tobacco Control 1998;7:66-71.

[14] Gilmore AB, Gallagher AWA, Rowell A. Tobacco industry's elaborate attempts to control a global track and trace system and fundamentally undermine the Illicit Trade Protocol. Tob Control. 2019 Mar;28(2):127-140. doi: 10.1136/tobaccocontrol-2017-054191. Epub 2018 Jun 13. PMID: 29899082; PMCID: PMC6580790.

[15] OCCRP, British American Tobacco Fights Dirty In West Africa, February 26, 2021 (accessed 03/31/2021)

[16] Lalam N, Weinberger D, Lermenier A, Martineau H, Observing the illicit tobacco market in France, French Observatory of Drugs and Drug Addiction, June 2012

[17] Younous Omarjee, The Black Book of the Tobacco Lobby in Europe, 03/09/2018

[18] Dautzenberg B, Dautzenberg MD. Heated tobacco: systematic review of the literature [Systematic analysis of the scientific literature on heated tobacco]. Rev Mal Respir. 2019 Jan;36(1):82-103. French. doi: 10.1016/j.rmr.2018.10.010. Epub 2018 Nov 11. PMID: 30429092.

[19] Dusautoir R, Zarcone G, Verriele M, Garçon G, Fronval I, Beauval N, Allorge D, Riffault V, Locoge N, Lo-Guidice JM, Anthérieu S. Comparison of the chemical composition of aerosols from heated tobacco products, electronic cigarettes and tobacco cigarettes and their toxic impacts on the human bronchial epithelial BEAS-2B cells. J Hazard Mater. 2021 Jan 5;401:123417. doi: 10.1016/j.jhazmat.2020.123417. Epub 2020 Jul 7. PMID: 32763707.

[20] Glantz SA, Heated tobacco products: the example of IQOS, Tobacco Control 2018;27:s1-s6.

[21] Ibid

[22] Customs, Taxation applied to manufactured tobacco, January 29, 2021, (accessed 03/31/2021)

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