France - cheaper cigarettes close by in Belgium..

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December 1, 2009 - Smokers from all over north-eastern France are responding to increases in tobacco taxes by driving over the border to Belgium to buy their cigarettes for about 20 per cent less. French tobacconists are fuming about Belgians stealing their customers.

The owners of Real Tobacco XL, and four other emporiums along the Franco-Belgian border, flooded northern France earlier this month (November 2009) with advertising flyers for their new shop. They sent a loudspeaker car, towing an advertising trailer, through the streets of Dunkirk promoting the fact that cigarettes were at least €1 (1.50939 USD) a packet cheaper 10 miles away in Adinkerke. The French tobacconists' association pounced. They had been able to do nothing, under EU law, about the cheap cigarette shops in Belgium. But they could bring a legal action against the Belgian firm for breaking an 18-year-old law which bans all forms of tobacco advertising in France.

"For three or four years, we have had to watch them [the Belgians] opening more shops selling cheap cigarettes, and we could do nothing," said Patrick Falewee, president of the Dunkirk area tobacco trade association. "Over there they have no system of tobacco licensing, anyone can start a tobacco shop. You just buy an abandoned house in a border village and you start selling cigarettes. Now, at last, we can fight back. They have broken the French law against advertising tobacco and we are going to make sure that they are punished for it. We are going to pursue this case to the end."

This is much more than a local quarrel. At one time, France took a relaxed view of smoking, partly because tobacco was a lucrative state monopoly. In the past decade, however, successive French governments have adopted a more health-conscious approach and have imposed a series of steep tax increases on tobacco. The 6 percent tax increase earlier this month has increased the price of a packet of 20 Marlboros – the most popular brand in France – to €5.60 (£5.10, 8.45126 USD). This is about £1 a packet cheaper than in Britain. It is about €1 (90p, 1.50939 USD) a packet more than in Belgium and at least €2 (3.01825 USD) a packet more than in other EU nations, such as Spain, Italy and Luxembourg.

Earlier this year, the British American Tobacco company estimated that more than one in five of all cigarettes smoked in France was bought abroad. Much the same problem exists in Germany, which has very cheap tobacco neighbours in Poland and the Czech Republic. There is a growing trade in smuggled cigarettes in Europe and an equally illegal growth of sales over the internet. But many French and German smokers have discovered the pleasures of perfectly legal, or almost legal, cigarette tourism.

"They come to the shops in Belgium, not just from Dunkirk and Lille but from as far south as Paris and Rouen," Mr Falewee said. "Legally under EU law they are allowed only five cartons of 200 cigarettes each per car. Of course, they often buy far, far more than that. The Belgian shops do nothing to limit their purchases."

A study earlier this year estimated that 657bn black market cigarettes are sold across the world annually, costing governments nearly £25bn in lost revenue. And the charity Cancer Research estimates that if the smuggling of cheap tobacco into the UK was eliminated, in the long term 4,000 deaths a year could be prevented.

Belgium was the first country in Western Europe to insist on pictorial warnings on cigarette packs. Belgian Prime Minister Herman Van Rompuy has been chosen as the first permanent President of the European Council. The Council is the main decision-making body of the European Union.

Reference: Smokers' paradise: French turn to Belgium for cheap cigarettes, The Independent-UK, 11/30/2009.