The new “tobacco-free alternatives” in the sights of certain European countries

Some European countries are considering introducing stricter rules for new tobacco-free sticks for use with heated tobacco devices from Philip Morris and British American Tobacco[1]. The two manufacturers announced the launch of the sticks, made from nicotine-infused substances like rooibos tea, late last year to counter the European Union's ban on heated tobacco products. flavored.

These products will be included in the new Tobacco Products Directive, which is due to be revised. Some countries where these products are becoming more and more popular now wish to act to regulate them in the same way as tobacco products.

Products intended to circumvent current regulations

Philip Morris has developed a range of sticks, called LEVIA, which do not contain tobacco but a “tobacco-free substrate” infused with nicotine and available in several flavors. British American Tobacco's products, on the other hand, are made from nicotine-infused substances such as rooibos tea. In October 2023[2], both manufacturers had said that these products had been placed on the market to counter the EU ban on certain flavors for heated tobacco. Philip Morris Chief Executive Jacek Olczak had said during an investor presentation that the new LEVIA product could avoid high taxation as well as various obligations imposed on the manufacturer's other tobacco products. LEVIA « will not be subject to the same flavor regulations in some jurisdictions (European Union)” and “ does not match » to existing tax categories.

Products increasingly popular in certain countries

Several European governments, including Latvia, Lithuania, Germany, Croatia, Belgium and Slovenia, are already considering introducing stricter regulations to control these products. In Latvia, a draft law would classify these tobacco-free sticks as tobacco substitutes and subject them to corresponding regulations, while banning all flavours except tobacco from 2025, a Health Ministry spokesperson said.

German authorities, meanwhile, are in discussions with some manufacturers about whether existing tobacco tax laws cover new products, according to a spokesperson for the federal customs authority. Belgium and Slovenia wish to implement specific taxes for these products.

Tobacco-free sticks represent only a tiny part of tobacco manufacturers' revenues, which still come overwhelmingly from manufactured cigarettes. But they marked an important strategic development that companies presented to investors as examples of innovation that could help them grow amid increasingly strict regulations for their other products. In some markets, sticks have seen rapid growth. In the Czech Republic and Romania, they already accounted for half of all sticks sold for BAT's heated tobacco device in December 2023, this figure being 30 % in Germany and 19 % in Greece. BAT plans to roll out these sticks globally shortly.

Keywords: Philip Morris, British American Tobacco, Levia, alternatives, heated tea, nicotine, Europe

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[1] Emma Rumney, European regulators close in on Big Tobacco's new tea sticks, Reuters, published March 28, 2024

[2] Generation without tobacco, Tobacco industry circumvents regulations around heated tobacco with tobacco-free refills, published October 25, 2023, accessed April 2, 2024