WHITE PAPER/LEGACY BOOK

European Parliament Working Group on Tobacco

MEP’s Working Group on Tobacco

2019-2024

MEP Michele Rivasi, Anne-Sophie Pelletier, Pierre Larrouturou

With the participation of the University of Bath’s Tobacco Control Research Group (TCRG)
Alliance Against Tobacco and Smoke Free Partnership

European Parliament
FCTC Secretariat

February 2024
 Table of Contents

Abbreviations..................................................................................................................... 3
Presentation of experts and contributors............................................................................4
Foreword of Michèle Rivasi, MEP Greens/ EFA..................................................................6
Forewaord of Anne-Sophie Pelletier, MEP The Left............................................................7
Forword of Pierre-Larrouturou, MEP S&D...........................................................................8

Introduction..........................................................................................9

Chapter 1 : The parallel trade in tobacco, its origin, its organisation,

its health and financial costs, the ways to put an end to it.............12

Smuggling, illicit trade, or parallel trade ?..........................................................12

Parallel trade: a lobbying rationale tool for tobacco manufacturers..................13
The need to ban disinformation from the KPMG Report.....................................14
“Cooperation agreements” instead of prosecutions...........................................15
The Protocol to Eliminate Illicit Trade in Tobacco Products...............................16
How to integrate the Protocol into the TTD and TPD guidelines ?.....................17
The massive ressources of lobbying of the tobacco industry............................17
A strategy to repel any inclination that can govern tobacco..............................18
Flavors of corruption...........................................................................................19
No transparency of the exchanges between the Commission and Big Tobacco
.............................................................................................................................19
For the strict application of Article 5.3 of the WHO FCTC..................................20
The European Ombudsman’s warnings on the links between the Commission
and tobacco lobbies...........................................................................................21
Transparency, a democratic challenge..............................................................22

Chapter 2: Taxation and traceability: levers in the fight against parallel

trade....................................................................................................24

A deleterious delay for the European Beating Plan against Cancer..................24

Increasing tobacco taxes, a solution with multiple benefits...............................25
The emblematic case of the “Dentsu Tracking/Jan Hoffmann” connections.....25
Revolving doors of interests: from Michel Petite to Jan Hoffman.......................26

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 The influence of the tobacco industry lobbies on the development
of the traceability system for tobacco products.................................................27
What are the entangled connections between the Commission, the tobacco industry
and Dentsu Tracking ?........................................................................................28
Behind Dentsu, the tobacco ‘invisible hand’ on the management
of the traceability of tobacco trade in Europe ?..................................................29
From Codentify to Dentsu Tracking, a story to trace..........................................30
The Commission culture of opacity.....................................................................31

Chapter 3. The hidden costs of tobacco on the environment...........32

Tobacco kills us and kills the planet, soils and forests.......................................33

Cigarette butt, the main source of microplastics................................................33
The ‘filter fraud’, to circumvent public health measures.....................................33
New tobacco products are ecotoxic bombs......................................................34
Tobacco manufacturers lie about their environmental impact...........................35
Revising the Tobacco Products (TPD) Directive to protect the climate
and the planet......................................................................................................35
The Polluter-Pays Principle in front of the tobacco lobby...................................36
The need for European regulation on electronic waste and tobacco pollution. 37

Conclusion..........................................................................................38
The proposals of the Parliamentary Working Group on Tobacco.....................................39
Bibliography..................................................................................................................... 42
Annexes........................................................................................................................... 49

2
 Abbreviations

ALTER-EU : Alliance for Lobbying Transparency and Ethics Regulation

ACT : Alliance Contre le Tabac
BAT : British American Tobacco
BECA : European Parliament’s Special Committee on Beating Cancer
CEO : Corporate Europe Observatory
CNCT : Comité National Contre le Tabagisme
DCTA : Digital Coding and Tracking Association
DG : Directorate-General of the European Commission
DG AGRI : Directorate-General for Agriculture, Common Agricultural Policy (CAP) and Rural
Development
DG CLIMA : Directorate-General for Climate Action
DG ENV : Directorate-General for Environment
DG FISMA : Directorate-General for Financial Stability, Financial Services, Capital Markets Union
DG GROW : Directorate-General for Industry and Entrepreneurship
DG MOVE : Directorate-General for Mobility et Transport
DG SANTE : Directorate-General for Health and Food Safety
DG NEAR : Directorate-General for Enlargement and European Neighbourhood Policy
DG TAXUD : Directorate-General for Taxation and Customs Union
DG TRADE : Directorate-General for Trade
EBCP :Europe’s Beating Cancer Plan
EPHAI : European Public Health Alliance Institute
EU : European Union
FCA : Framework Convention Alliance
FCTC : Framework Convention of Tobacco Control
JTI : Japan International Tobacco
MEP : Member of the European Parliament
NGO : Non-Governmental Organization
OCCRP : Organized Crime and Corruption Reporting Project
OLAF : European Anti-Fraud Office
SMW : Small Mixed WEEE
PMI : Philip Morris International
PPE : European People’s Party Group at the European Parliament
S&D : Progressive Alliance of Socialists and Democrats at the European Parliament
SFP : Smoking Free Partnership
STOP : Stopping Tobacco Organizations and Products
T&T : Track and Trace system
TCRG : Tobacco Control Research Group, Bath University
TPD : Tobacco Product Directive
TTD : Tobacco Taxation Directive
WEEE : Waste Electrical and Electronic Equipment
WHO : World Health Organization

3
 Presentation of experts and contributors

Kelvin Khow, Secretariat of the WHO Framework Convention on Tobacco Control

Kelvin Khow Chuan Heng (Malaysia) has been working with the World Health Organisation
(WHO) for nearly two decades. He is currently Program Manager at the Secretariat of the WHO
Framework Convention on Tobacco Control at WHO headquarters in Geneva, Switzerland. Kelvin
Khow has more than a decade of experience in tobacco control, after being based at the WHO
China office in Beijing and the WHO Pacific Regional Office in Manila, Philippines. Previously,
Kelvin Khow worked at the WHO Iraq office on health sector reform and coordination of the
United Nations and donors, and at WHO headquarters on mental health and addiction issues and
strategic support to countries. Kelvin studied at the London School of Hygiene and Tropical
Medicine, the University of Michigan, the United States and the University of Melbourne,
Australia.

Dr. Robert Branston, University of Bath

Robert Branston is an associate professor of business economics within the University of Bath’s
School of Managementin the UK, and is part of the University’s internationally renowned Tobacco
Control Research Group. (TCRG) A trained industrial economist, Dr. Branston conducts academic
research in the broad area of government regulation, with a particular focus on the global tobacco
industry. His recent work focuses on the profitability of the tobacco industry and the taxation of
tobacco products, including the industry’s responses to tax increases and their associated price
strategies, as well as the reform of the EU Tobacco Tax Directive.

Cassandre Bigaignon, Alliance Against Tobacco (ACT)

Cassandre Bigaignon is a specialist in international law and advocacy. Cassandre Bigaignon has
been in charge of European affairs for over a year within the Alliance Against Tobacco (ACT), on
the issues of tobacco and new nicotine products.

Carl Dolan, Office of the European Ombudsman

Carl Dolan is Senior Adviser to the European Ombudsman on policy developments, strategy,
investigations and external relations, in particular on high-level relations between stakeholders and
civil society organisations. Previously, Carl Dolan was the Director of Transparency International
EU. He has also worked in the UK Research Councils, the European Commission and the European
Foundation Centre. Carl Dolan graduated in Economics and Philosophy from University College
Dublin (1991-97) and studied and taught political philosophy at the University of Bristol (1999-
2002).

Martin Drago, Alliance Against Tobacco (ACT)

A former lawyer specialising in European law and personal data law, Martin Drago joined ACT as
an advocacy officer at the end of 2021. Previously, Martin Drago was in charge of political and
legal analysis of the association for the defence of individual freedoms La Quadrature du Net. Still
a volunteer member of La Quadrature du Net, Martin Drago was also an international co-
coordinator of the Friends of the Earth International Food Sovereignty Program.
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Dr. Allen Gallagher, University of Bath
Allen Gallagher is a Research Fellow within the Tobacco Control Research Group, University of
Bath, UK. and a member of the Tobacco Control Research Group (TCRG). He holds a doctorate
from the University of Bath as well as a MSc. in drug and alcohol studies and a BA in politics
(major) and sociology (minor), both from the University of the West of Scotland. His current
primary research focuss isthe illicit tobacco trade and its implications for public health.

Olivier Hoedeman, Corporate Europe Observatory

Olivier Hoedeman is co-founder of Corporate Europe Observatory (CEO), an organisation
dedicated to highlighting the influence of large companies within the European Union. He is also
the co-founder of the European Alliance for Lobbying Transparency and Ethics Regulation
(ALTER-EU).

Dr. Rosemary Hiscock, University of Bath

Rosemary Hiscock is a Research Associate at the University of Bath (UK) Tobacco Control
Research Group (TCRG). Rosemary is currently working on the supply chains of the tobacco
industry encompassing the study of farmers in difficulty in low- and middle-income countries and
the study of transnational enterprises. Her work has also helped understand the tobacco industry’s
attempts to undermine the 2020 ban on menthol cigarettes, as well as environmental filter fraud.

Dr. Olivier Milleron

Cardiologist at Bichat Hospital, former smoker, and member of the Collective Inter-Hôpitaux,
Olivier Milleron signed in 2022 the essay Pourquoi fumer, c’est de droite at éd. Textuel. As a public
service activist, he has accompanied and supported social movements for many years. From the
association Right to Housing to La Fanfare invisible, Olivier Milleron advocates for struggles’
engagements that must be concrete but also joyful.

Lilia Olefir, Smoke Free Parnership (SFP)

Director of SFP since December 2022, Lilia Olefir led the Ukrainian NGO LIFE for 6 years in Kiev,
where she led successful campaigns to adopt the annual increase in tobacco taxes and the
harmonisation of taxes between different product categories, as well as media campaigns to support
changes in tobacco control policy in Ukraine.

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 Foreword of Michele Rivasi, MEP Greens / EFA

Tobacco is a powerful lobby, old and discreet. A toxic scourge, which knows how to use any means
to achieve its ends. The revision of tobacco legislation, so urgent and so necessary, but constantly
postponed since 2020, proves to be the tip of the system of the tobacco lobby, a powerful coalition
of interests that has been manoeuvring for decades to conceal its influence and deceive regulators.
Its influence is devious, as this White Paper and the experts we interviewed sadly illustrate all too
well. Let's not forget that the tobacco companies are the ones who invented the doubt factory and its
techniques for infiltrating scientific data and manipulating public opinion, and who are now familiar
with all the major industrial lobbies.

A key point I'd like to emphasize in the foreword of this White Paper Legacy Book of our MEP
Working Group on Tobacco Products is the Commission's responsibility. Why was the review of the
Tobacco Directives not carried out as promised during the 2019-2024 term? Why has the revision
been so delayed? Why are the rules on independence and transparency that we have set ourselves
for relations with the tobacco industry and its representatives not being respected? The
implementation and proper application of all this is the responsibility of the European Commission.
This is its responsibility. And if necessary, we will call on the courts to hold it to account for its
actions.

I'm coming to the end of my third term. The European that I am is deeply disappointed. The
European Commission's unwillingness to protect itself from the influence of lobbies, conflicts of
interest, pantouflage and insider trading opens the door to corruption. A latent corruption accepted
by both the Commission and the Member States. The gangrene then becomes systemic, with
institutions and individuals seeking to protect each other. In fact, the subject of tobacco is
extraordinarily revealing.

To put an end to this collusion, which is discrediting the whole of the European Union, we need
independent experts, but we also need genuine investigations and sanctions for the officials
responsible or complicit in all these failings and repeated cases of maladministration.

It is our responsibility as Members of the European Parliament, present or future, to exercise our
duty of parliamentary control over the European Commission. It is therefore up to us, as Members
of the European Parliament, to reinforce transparency and ensure that the Commission respects the
rules of the game - in short, to be the guardians of the general interest. If we don't exercise this
power, which is part of our elected mandate, who will?

May this White Paper Legacy Book on Tobacco Products give the next MEPs the courage and
renewable energy to continue our fight for democracy and health.

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 Foreword of Anne-Sophie Pelletier, MEP The Left

Today, the harmful consequences of smoking seem to be common knowledge. Gone are the days
when doctors recommended smoking cigarettes for their health benefits. Tobacco is a poison for the
health of smokers and those around them, and everyone knows it - even if many choose to ignore it.
It's also a poison for flora and fauna, and its production has a catastrophic impact on the
environment. At a time of growing ecological awareness, tobacco must become one of the key
issues in the fight against pollution.

For all these reasons, elected representatives and institutions are increasingly taking up this issue.
The World Health Organization is playing a key role in this process, producing Conventions and
Protocols which now form a body of international law that helps to reduce tobacco consumption.
Across the world, ambitions are flourishing against this scourge, as in the case of New Zealand,
which has devised one of the boldest pieces of restrictive legislation, embodied by the ambition of a
"tobacco-free generation". Unfortunately, the withdrawal of this policy during the latest change of
majority in this country shows the fragility of these advances.

The European Union and its member states are facing the same problem, struggling to translate the
ambitions they have set themselves into law. Between a lack of political will, inconsistency in the
measures adopted and pressure from influential groups, European law is not yet up to the challenge.
To make matters worse, the Commission, master of the Union's clocks, remains far too attentive to
the tobacco industry. These lobbying activities, widely referred to in the course of our work, remain
a very real brake on all the progress necessary to bring about a profound change in our relationship
with tobacco. We must remember that tobacco is not a product like any other, and that its
consumption is never light, anodyne or mundane: tobacco kills.

The purpose of this White Paper is to bring together the knowledge and experience of associations,
universities and institutions, to provide an explicit update on the harmful effects of tobacco, its new
products, and the solutions that already exist and those yet to be invented. This production is the
fruit of work that began on December 17, 2020, and which we recently completed. Its aim is above
all to enable future elected representatives, at national, European and international level, as well as
all those involved in the fight against tobacco, to continue this fight by being able to draw on a
wealth of proposals.

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 Foreword of Pierre Larrouturou, MEP S&D

My father-in-law died of lung cancer. So did one of my aunts. Both had smoked heavily for too
many years. Recently, a friend of mine recovered from lung cancer. Everything is fine now, but we
were afraid. He had never smoked: passive smoking or fine particles from oil combustion? We will
never know where the disease came from…

Tobacco is now recognized as a source of cancer, causing over 700,000 deaths a year in Europe.
The risks are well known, but the number of smokers is still too high. The fight against nicotine
addiction must be at the heart of prevention policies, to provide better support for people who want
to quit, and to better inform younger people about the risks involved. Numerous French reports
show that cigarette sales to minors are still too high, and that the illicit trade is still massive. This
circumvention of tobacco regulations is dramatic. The fight against smoking remains a vital public
health issue, but one that is all too often relegated to second place.

Every year, tobacco costs the French state more than 156 billion euros in healthcare and “social”
costs. This industry, which causes so many health, social and environmental problems, costs us a
great deal, and contrary to popular belief, brings in "only" 16 billion euros in tax revenue. There is
an urgent need not only for stricter control of these practices, but also for greater taxation of these
large firms.

The tobacco industry remains very active in the heart of the political arena thanks to its powerful
and influential lobbying. At a European level, four different directives rule the sale and taxation of
tobacco products. Yet the number of tobacco-related deaths is still way too high, and legislation is
not evolving fast enough. Great ambitions for a tobacco-free Europe sometimes emerge, but they
are constantly pushed back on the political agenda by the industry lobby, which is still too
influential with decision-makers. Clearly, the tobacco industry's interests should not be favored by
our institutions to the detriment of public health. This was one of the battles we shared with Michèle
Rivasi.

The demand for total transparency within institutions, including European institutions, must be a
priority. The fight against the influence of the tobacco industry must be continued and stepped up
(as must the fight against the oil lobby), so that the industries the most harmful to health and the
environment stop interfering in political decision-making.The tobacco industry has developed a
collection of strategies to influence institutions, which the multinational tobacco companies are
eager to use whenever the word tobacco is mentioned in a legislative text. It is therefore urgent to
better control exchanges between these harmful and polluting industries and political decision-
makers.

Let us not forget that the strategy of doubt used by the fossil fuel giants to slow down climate action
was first theorized and used by the tobacco giants. The fight against tobacco is a long political battle
that must be continued, but new industries (oil, cars) that are highly detrimental to the environment
are using the same tactics to exert pressure and unravel legislative texts with the sole aim of keeping
their sales untouched. The fight against tobacco and the fight against its influence are crucial to
achieving a healthier society.
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 Introduction

Tobacco use is a major challenge for public health in Europe. Tobacco prematurely kills
700000 people in Europe every year 1, about 15 % of whom are non-smokers. According to
the German Cancer Research Centre (DKFZ), in Germany 127000 people die each year from
the causes of tobacco, including 85000 from cancer. This represents 13 % of deaths in the
country. For its part, Santé Publique France recalled in 2018 that smoking was responsible for
68000 new cancer cases per year in France and accounted for 20 % of the cancers observed.
The majority of these deaths could be easily avoided. The effects of tobacco are now well
known, as are the measures that would drastically reduce smoking.

Several countries such as the Netherlands2 or Brazil3 show a low prevalence of smoking
because they have been able to implement the public health measures recommended by the
World Health Organisation (WHO). Above all, they were able to oppose tobacco lobbies and
their arguments. This is not the case in the European Union (EU) where smoking prevalence
varies from one Member State to another, with adult smoking rates ranging from less than
20 % to more than 30 %. We will see that the European Commission very easily opens its
doors to tobacco lobbies and is particularly permeable to their demands, although these are
contrary to the general interest, public health, public finances and the good administration of
our institutions.

This far too high number of tobacco deaths in Europe does not prevent the tobacco industry,
despite its hypocritical speech on the end of cigarettes, from continuing to spend tens of
millions of euros each year on lobbying to pressure the European Commission and the
Member States to prevent the adoption of any new anti-smoking measures. Nor does this
number affect politicians, the Commission or the Member States, who become complicit in
the tobacco industry by satisfying its demands.

It should be borne in mind that 700 000 premature deaths per year in Europe are broken
destinies, family dramas, long and difficult diseases and a social cost of heartbreaking
tobacco that must be borne by all, including non-smokers. In addition, tobacco manufacturers
are increasingly resorting to tax optimisation, thus avoiding tax and thus compensation for the
damage they knowingly cause.

1 Organisation Mondiale de la Santé, Bureau Régional de l’Europe. Usages européen du tabac : rapport sur les tendances en
2019, 2019.
2 “The Netherlands at the forefront of tobacco control”, WHO website, URL: https://www.who.int/europe/fr/news/item/31-07-
2023-the-netherlands-at-the-forefront-of-tob acco-control
3 “Tobacco consumption is declining despite the efforts of the tobacco industry to compromise progress made,” Pan American
Health Organisation website URL: https://www.paho.org/fr/nouvelles/16-1-2024-consommation-tabac-diminue-malgre-les-effort
s-tabagism-industry-for
9
 The comparison between road safety and tobacco is sadly instructive in this respect. In
France, a day rarely elapses without a press article or a report on a road accident. These 3 000
annual deaths obviously leave us not insensitive, but tobacco kills 25 times more than road
accidents. Tobacco also costs society 10 times more than it earns. If we have been able to
adopt binding measures to reduce traffic accidents, why are we not able to protect our
children from smoking and the influence of the tobacco industry?

The European Union is the perfect example of this institutionalised weakness in the face of
the powerful tobacco industry. We have been confronted several times with the European
Commission’s lack of will, as we are setting out in this White Paper.

In the EU, tobacco control is governed by two directives: one, relating to the structure and
rates of excise duty applicable to manufactured tobacco (Tobacco Taxation Directive or TTD,
adopted in 2011)4 and the other relating to tobacco products known as Tobacco Products
Directive (TPD, adopted in 2014) 5. The EU and its 27 Member States thus seem to have a
consistent anti-smoking arsenal, yet the EU remains a very lucrative market for the tobacco
industry.

Since the adoption and implementation in the 27 Member States of the above-mentioned
Directives, the context has changed profoundly: new tobacco products have emerged,
consumption patterns have changed, social networks allow the tobacco industry to advertise
hijacked, and parallel trade has grown considerably. The partially obsolete TTD and TPD
directives need to be updated and strengthened. However, their revisions announced for
several years are constantly being pushed back by the European Commission, under pressure
from the tobacco industry.

Revisions to these directives have also become both essential and urgent for environmental
reasons. Since their adoption in 2011 and 2014, the irreversible damage caused by tobacco
cultivation and smoking on our planet has been extensively documented 6. It is thus
established that tobacco is responsible for 5 % of deforestation7, that butts are the primary
source of microplastics, that 3.7 liters of water are needed to make a single cigarette 8
(knowing that it is made six thousand billion of them each year!). And, to add, that the CO2
emitted each year by the tobacco industry corresponds to 3 Million transatlantic flights 9. Yet
the tobacco industry is not concerned by treaties to ban products associated with

4 Council Directive 2011/64/EU of 21 June 2011 on the structure and rates of excise duty applicable to manufactured tobacco
5 Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014 on the approximation of the laws,
regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco
and related products and repealing Directive 2001/37/EC
6 «L’OMS tire la sonnette d’alarme concernant l’impact de l’industrie du tabac sur l’environnement», Site de l’OMS.
7 World Health Organization, « Tobacco : Poisoning our planet », 2022.
8 Zafeiridou M, Hopkinson NS, Voulvoulis N. « Cigarette Smoking: An Assessment of Tobacco's Global Environmental Footprint
Across Its Entire Supply Chain », Environmental science and technology, 2018.
9 Environmental impacts of the tobacco lifecycle Corporate. National Center for Chronic Disease Prevention and Health
Promotion (U.S.). 2022. https://stacks.cdc.gov/view/cdc/118156
10
 deforestation10 nor by the future carbon tax mechanism at borders 11. Despite adversarial
advertising and marketing, new tobacco products (e-cigarettes, tobacco products for heating,
etc.) remain just as harmful, if not more, to the environment as traditional cigarettes.

It is both in order to compel the Commission to launch the procedures for the revision of
these two texts and to raise awareness among MEPs of their importance that Cristian Bușoi (
EPP) set up, in 2019, the Parliamentary Working Group “on the revision of the Directives on
the taxation of excise products including tobacco (TTD) and the Tobacco Products Directive
(TPD)”. This working group was co-chaired by Michèle Rivasi (Greens/EFA), Anne-Sophie
Pelletier (GUE/NGL) and Pierre Larrouturou (S & D/Nouvelle Donne).

The aim of this parliamentary working group on tobacco is to sensitise European

parliamentarians, NGOs, but also all citizens on tobacco-related issues to enable them to cope
with the tobacco lobby’s disinformation campaigns. The memory of the methods used by
several tobacco lobbies during the preparation of the TPD in 2013 and 2014 remains vivid,
with targeted campaigns against MEPs and NGOs – going as far as the burglary of the
premises of several of them. The Dalli case and the suspicions it has generated have also
eroded the bond of trust between institutions and citizens.
While smoking is responsible for nearly 700000 deaths per year in Europe, while the EU has
set itself, through the Europe’s Beating Cancer Plan (EBCP), the objective of a “tobacco-free
generation” in 2040, while the European Parliament, through the BECA report, recalled the
urgency of updating our anti-smoking policies, while the European Commission opened a
public consultation on the evaluation of the legislative framework for tobacco control on 21
February 2023, but constantly rejecting the revisions of the two directives concerned, while
the European system of traceability of tobacco products is both considered contrary to the
WHO Protocol “to eliminate illicit tobacco trade” and ineffective, our Parliamentary Working
Group wished to exchange with public health associations and independent experts, under the
eyes of the press, on strategies for influencing the tobacco industry and their allies on public
health policies to reduce smoking. Our discussions focused on tobacco taxation, public
consultations, parallel tobacco trade and traceability, in the framework of four round tables
held in Brussels and Strasbourg between December 2020 and October 2023.

The purpose of this White Paper is to report on our exchanges, our findings and our concrete
proposals for a swift and useful revision of the directives on the taxation of excise products
including tobacco (TTD) and the directives on tobacco products (TPD), in order to realise the
wish for a Europe without tobacco. The White Paper will be distributed in French and
English to all European parliamentarians, political groups, the European Commission, the
World Health Organisation (WHO) and the WHO Framework Convention on Tobacco
Control (WHO FCTC), public health NGOs and the media.

10 « Accord européen pour interdire l’importation de produits issus de la déforestation », Le Monde, 6 décembre 2022.
11 « L’industrie du tabac est infréquentable car dangereuse pour notre santé, notre environnement et notre démocratie », Tribune
d’Olivier Milleron, Le Monde, 4 février 2023.
11
 Chapter 1 : Parallel trade in tobacco,
its origin, its organisation, its health and financial costs and
the ways to put an end to it

All stakeholders agree that parallel tobacco trade is a scourge that escapes tax regulations and
which health policies fail to put an end to. This theme was invited to all the round tables we
organised, beyond the first one we organised with Cristian Bușoi on 17 December 2020.
Whether we are talking about taxation, “new tobacco products”, measures to reduce smoking,
tobacco lobbying or the conflict of interest Dentsu Tracking/Jan Hoffmann on which we will
go back in more detail, the theme of parallel tobacco trade is needed.

Smuggling, illicit trade, or parallel trade?

Everywhere, tobacco is trafficked, from its production to its consumption and transport. The
WHO estimates that 12 % of the 6,000 billion cigarettes manufactured and marketed each
year worldwide are subject to it12.
‘Smuggling’, ‘illegal trade’, ‘counterfeit’, ‘border purchases’, ‘illicit white’ (or white marks),
“ant trafficking”... The terms are multiple to refer to the tobacco trade outside the legal
network. “As far as possible the concept of ‘parallel trade’ must be preferred because it is
exhaustive, corrects as early as 2018 our associate Younous Omarjee in his Livre Noir du
lobby du tabac en Europe13, while those of ‘smuggling’ and ‘illegal trade’ are only facets.
Readily confused aspects which are mainly the rhetoric of tobacco manufacturers which aim
to give a truncated picture of reality and make-up it in order to better lose their interlocutors,
be they journalists or public authorities. This also obscures their responsibility for feeding
these parallel networks that allow them to circumvent new anti-smoking regulations such as
increases in taxation, fuelling tobacco consumption by the absence of deterrent prices to
purchase. “Parallel trade therefore allows tobacco manufacturers to find new smokers, and
established smokers to reduce the cost of their consumption,” sums MEP Younous Omarjee in
his black book.

Between 2015 and 2018, tobacco manufacturers communicated about the huge share of Illicit
Whites in the illicit trade. These products are cigarettes manufactured by small manufacturers
and sold “under the coat” in countries where they are not referenced. However, for several
years, tobacco manufacturers have been multiplying communications on an explosion of
counterfeiting, notably through KPMG’s Annual Report on Illicit Trade – a report
commissioned by the tobacco manufacturers themselves 14 15 16.
12 «Ratification du Protocole, un pas de géant pour endiguer le commerce illicite, Site d’Alliance contre le tabac».
https://alliancecontreletabac.org/2018/06/30/ratification-du-protocole-un-pas-de-geant-afin-d contain-trade-illicite-products-of-
tobacco/
13 Younous Omarjee, « Le livre noir du loby du tabac en Europe », 2019.
14 « KPMG study, premiere intox by Philip Morris and others », Site du Comité National Contre le Tabagisme, 8 juin 2016. https://
cnct.fr/ressource/communiques/etude-kpmg-intox-philip-morris/
15 « Comment l‘industrie du tabac instrumentalise le commerce illicite pour freiner les politiques de santé publique », Site
d’Alliance Contre le Tabac, 28 juin 2023.
16 « KPMG report on illicit tobacco trade: fanciful data at the service of Philip Morris », Site du Comité National Contre le
Tabagisme, 4 juillet 2017.
12
 Two ways can allow tobacco manufacturers to organise parallel trade. The first is to go
through the countries of Eastern Europe, where taxes are extremely low, and then transport
cigarettes by trucks or boats to countries with high taxes. Tobacco manufacturers can also
“over-supply” Western European countries whose taxes are more lenient. This is illustrated
for example with countries bordering France such as Andorra, Luxembourg, Belgium or
Spain, which feed smokers and non-smokers – sometimes tempted by the resale of cigarette
cartridges.
The notion of “parallel trade” seems more appropriate to describe this multifaceted reality of
tobacco trade outside official and state-controlled networks.

Parallel trade : a lobbying rationale tool for tobacco manufacturers

The theme of parallel tobacco trade was popularised in the early 2000s in three countries in
particular: Canada, Ireland and France. These three countries have decided to put in place a
high sales price policy to combat smoking. Since then, the tobacco industry has made parallel
tobacco trade a major argument to combat new anti-tobacco regulatory projects, such as plans
to increase tobacco taxation or yet urgent regulation on “new tobacco products” such as e-
cigarettes, heated tobacco and snus.
The parallel trade in tobacco is also a major lobbying argument of the tobacco industry to
oppose the generalisation of neutral packaging, the ban on flavourings – which aim to attract
teenagers – as well as the posting of health messages on cigarettes, vape products and heated
tobacco products.
This argument of tobacco lobbies is all the more misleading as the responsibility of tobacco
manufacturers is involved in the organisation and feeding of parallel networks. Unfortunately,
this argument remains due to the lack of knowledge of the nature and origin of this parallel
trade.
Our work highlights the communication strategies put in place by the various players in the
sector around the issue of parallel tobacco trade. Anti-tobacco associations seem to want to
minimise its importance in order to prevent it from becoming an argument not to increase the
taxation of tobacco products. After focusing on the Illicit Whites, the industry is now using
over-valued estimates of counterfeiting to carry out their communication.
“The permanent overestimation of the reality of parallel markets is aimed at a specific
objective: deter governments from undertaking any form of regulation, starting with increases
in tobacco taxes, which have been accused of favouring off-grid purchases. This strategy of
undermining public health policies is a constant of the tobacco industry and its allies" 17 wrote
Professor Yves Martinet, President of the CNCT in France (Comité National Contre le
Tabagisme) in 2021.

17 « Le billet du Pr. Martinet. Rapport KPMG : en finir avec l’opération de désinformation des cigarettiers », Site du Comité
National Contre le Tabagisme, 14th Sept 2021.
13
 The overestimation of counterfeiting not only allows manufacturers to minimise their
responsibilities but also offers them a strong argument to argue for a tax and legislative status
quo that will ultimately promote smoking, and thus the profits of the industry. At our round
table on “Taxation and taxation” on 14 June 2023, Martin Drago of the Alliance Against
Tobacco (ACT) denounced “ the KPMG report whose methodology is widely criticised”,
stressing “ the use of the subject of parallel trade by the tobacco industry to combat the
taxation policies desired by the EU and the Member States”. Yet "KPMG figures are taken up
by national and European parliamentarians. Elected officials should recall that the KPMG
Report is a communication tool for the tobacco industry.

The fight against parallel tobacco trade is a priority claimed by the Commission, the
European Parliament, the Member States, the WHO, associations, and even, as they claim,
tobacco manufacturers. However, no one seems to agree on the origin of parallel trade, nor on
the solutions to put an end to it. Thus, the European Commission considers that cigar makers
are victims of parallel trade and that it is necessary to work with them to combat this
phenomenon. The Commission do not hesitate to write it in response to written questions
from MEPs despite the fact that such a claim goes against a lot of research on the parallel
tobacco trade that demonstrates the involvement of cigar makers in this traffic. These studies
motivate WHO and public health associations to demand that tobacco manufacturers be
excluded from the discussions and solutions to be implemented.

The need to ban disinformation from the KPMG Report

Tobacco majors often conceal their responsibility for the mechanisms of parallel tobacco
trade. This role is more particularly attributed to the annual study carried out by the
consultants of KPMG, a service signed in 2006 and paid for more than 11 million euros by
Philip Morris International18.
It has become the annual mass of disinformation on the illicit tobacco trade. Every year, in
June, several media outlets and elected officials relay the ever-increasing figures from the
KPMG report. Thus, the last three KPMG reports point to an exponential increase in
counterfeiting on French territory: + 600 % in 2020, + 33 % in 2021 and + 47 % in 2022. In
2023, the report claimed that the parallel market for tobacco products accounted for more
than 40 % of total tobacco trade in France. The rengaine is known: as parallel trade continues
to grow, countries should stop or even lower taxes. The communication operation is blatant,
but cigar makers manage to attract attention every year at a lower cost.
Since 2016, the French association Comité National Contre le Tabagisme (CNCT), a member
of Alliance Against Tobacco, has nevertheless echoed the criticisms of scientists on
methodological weaknesses19, opacity and calculation biases of these studies commissioned
by industry. “However, the aim of data manipulation and a biased presentation of the situation
remains the same: scare and deter governments from adopting significant tax increases that

18 « Lutter contre le commerce illicite de tabac en France, un enjeu sanitaire, fiscal, sécuritaire et informationnel », Rapport du
Comité National Contre le Tabagisme, 2022.
19 The methodology used by KPMG to estimate the scale of illicit trade relies on surveys based on the collection of empty packets
in urban areas (carried out by market research agencies commissioned by tobacco manufacturers) and on legal domestic sales
data (supplied by tobacco manufacturers and third-party market research agencies).
14
 can reduce consumption and deter young people from starting smoking," the Committee
summarised in 2017. In the same year, the CNCT demonstrated, with supporting figures 20,
that the data relating to ‘Illicit Whites’ were not only false but even modified from one year to
the next, always in the direction of the propaganda of cigar-makers.
In June 2023, it was the estimates of the KPMG report on counterfeiting that made NGOs
react. For example, the U.S. Association of Independent Investigative Journalists Organised
Crime and Corruption Reporting Project (OCCRP) has shown that tobacco manufacturers in
Pakistan, including Philip Morris International, are the beneficiaries of this black market and
the real instigators of counterfeit factories whose activity they denounced to the Pakistani
authorities.21

‘Cooperation agreements’ instead of prosecutions

In France, parallel tobacco trade became a subject in 2004 with the consequent rise in tobacco
prices initiated under the mandate of President Jacques Chirac as part of his Cancer Plan 22.
For years, the only data available to us on the parallel trade in tobacco came from tobacco
manufacturers, where they explained that they themselves were the first victims of this
phenomenon. Thus, governments, particularly in France, and the European Union, have
signed ‘memoranda of understanding to combat parallel trade in tobacco’ with tobacco
manufacturers, suggesting that working with tobacco manufacturers to put an end to this
scourge was a solution. Wrongly.
These “co-operation agreements”23 on combating illicit tobacco trade between the EU and
tobacco manufacturers were signed in exchange for dropping legal proceedings, against
Philip Morris in 2004 and against British American Tobacco, Japan Tobacco and Imperial
Tobacco in 2005, for “organisation of illicit trade”, and for the payment of more than EUR 2
billion24 over a period of 12 to 20 years. These cooperation agreements signed with tobacco
producers Philip Morris International (PMI) in 2004, Japan Tobacco International (JTI) in
2007, British American Tobacco (BAT) and Imperial Tobacco in 2010, are contrary to Article
5.3 of the WHO Framework Convention on Tobacco Control25. Thus, contrary to international
law, the tobacco industry has paid to ensure that its responsibility for organising tobacco
trafficking is not penalised.
From the 2010s, the work of NGOs and journalistic surveys began to show that the reality
differed significantly from that promoted by the tobacco industry and that the latter’s
responsibility for organising and feeding parallel trade was proven. The most recent estimates
suggest that 60-70% of the current illicit market is made up of products sourced directly from

20 « Rapport KPMG sur le commerce illicite de tabac : des données fantaisistes au service de Philip Morris », Site du Comité
National Contre le Tabagisme, 4 juillet 2017.
21 “Pakistan’s big tobacco problem”, Organised Crime and Corruption Reporting Project website, URL:
https://www.occrp.org/en/loosetobacco/without-a-trace/pakistans-big-tobacco-problem.
22 Plan Cancer 2003-2007, Mission interministérielle pour la lutte contre le cancer.
23 « European Commission and Philip Morris International sign 12-year Agreement to combat contraband and counterfeit
cigarette s », 9 july 2004. https://ec.europa.eu/commission/presscorner/detail/en/IP_04_882
24 « UE : le Parlement s’oppose à un nouvel accord avec Philip Morris », les Echos, 9 mars 2016.
25 « Commerce illicite : le renouvellement des accords de coopération entre l’UE et un cigarettier en question », Site de Génération
Sans Tabac, 30 novembre 2022.
15
 manufacturers26 . The share of border traffic, generated by different taxation and oversupply,
occupies a prominent place in parallel trade. Thus, in 2020, taxes in France amounted to 85 %
of the price of the package compared to 69 % in Luxembourg, 79 % in Belgium or less than
80 % in Spain and Italy. At the same time, Luxembourg received three billion cigarettes per
year for an annual domestic consumption of 600 million cigarettes, and Andorra received
almost 850 million cigarettes for domestic consumption of 120 million. Tobacco seizures that
regularly make headlines are related to sales of large quantities of tobacco to factory-exit
intermediaries, regardless of their final destination. It is this tobacco, brought back by trucks
or boats, that is regularly subject to publicised seizures. The double-play of tobacco
manufacturers is unfortunately a constant.

The Protocol to Eliminate Illicit Trade in Tobacco Products

One way to end parallel tobacco trade could be to upward tax harmonisation within the EU.
Indeed, aligning the taxation of tobacco products within the 27 Member States would reduce
the price gap and reduce the share of cross-border purchases.

Lilia Olefir, Director of the Smoke Free Partnership (SFP), a coalition of more than 50 public
health NGOs, showed, however, in her speech of 14 June 2023, the difficulty of achieving
this goal. It recalled that ‘ the price of the Marlboro package in 2022 was EUR 2.9 in
Bulgaria and EUR 15.40 in Ireland’. Adding that these price differentials within the EU
tended to increase. Thus, ‘ in 2018, the price gap for the Marlboro package was EUR 9.38,
and it increased to EUR 12.49 in 2022’, she pointed out, stressing that ‘a significant
difference in the prices of tobacco products in the Member States constitutes an economic
invitation for cross-border purchases, contrary to the Commission’s objective set out in the
European Plan for the Winning Cancer (Pevc)’.
Another option, cited by MEP Michèle Rivasi during the work of the parliamentary group,
would be to impose tobacco delivery quotas within the EU, as defined by the Protocol to
Eliminate Illicit Trade in Tobacco Products.
Indeed, whether it is one of the measures, it seems urgent to implement this international
treaty in order to put an end to the parallel trade in tobacco. Unfortunately, when the Tobacco
Products Directive was drafted and adopted in 2014, the Protocol was neither ratified by the
EU27 nor entered into force28. Similarly, while the European Parliament had incorporated the
text of the Protocol into Article 14 of its TPD report, the trilogue resulted in a European
system of ad hoc traceability of tobacco products in Articles 15 and 16 of the DPT. It was not
until a few years later that this decision was imposed by the Commission during the trilogue,
under pressure from the tobacco industry and with the help of the senior official of DG
Health Jan Hoffmann, who is now accused of collusion with this industry. (see Dentsu
Tracking/Jan Hoffmann Conflict of Interest Chapter).

26 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 », Tobacco Control 2019;28:127-140.
27 This has been the case since June 2016
28 This has been the case since September 2018
16
 How to integrate the Protocol into the TTD and TPD guidelines?
In June 2016, the European Parliament voted against the Commission’s opinion in favour of
ratifying the Protocol. After obtaining the necessary 40 ratifications, the Protocol to Eliminate
Illicit Trade in Tobacco Products formally entered into force on 25 September 2018, and can
be applied as of 2023 by its Parties which are to date nearly 70, including the EU and most
Member States 29.
The revisions of the TTD and TPD directives expected in the wake of the European elections
in June 2024 must take account of this institutional development. The Protocol is to be
incorporated into the Taxation Directive in view of the link between tax increases and the
handling of tobacco producers to develop parallel networks.
The provisions of the Protocol should also be incorporated into the Tobacco Products
Directive to replace Articles 15 and 16 of the current CPT, in line with the positions of the
European Parliament and the requirements of international law.
This is an issue of compliance with international law, and of exemplarity of the European
Union in compliance with its commitments while a ratified international treaty is required, in
international law, to a European directive, as recognised by the Court of Justice of the
European Union 30.
As Commission President Ursula von der Leyen wrote on 7 December 2020 to the members
of the Informal Working Group, but also as highlighted in the Report of the European Public
Health Alliance Institute (EPHAI)31 requested by the ENVI Committee in 2019, amend the
current European traceability system so that it is fully in line with the Protocol and can
inspire similar models in other countries outside the European Union.
The European Ombudsman, Emily O'Reilly, has also repeatedly asked the European
Commission to publish the minutes of its meetings with the lobbies of the tobacco industry.
In vain, despite the recognised influence of the tabatiers in Brussels.

The massive lobbying ressources of the tobacco industry

As Lilia Olefir, director of the NGO Smoke Free Partnership, recalled at a parliamentary
working group hearing, between EUR 10 and 13 million were spent by lobbies on influence
missions to the institutions in 2021 – mainly to the European Commission – an increase of
almost EUR 3 million compared to 2020. Smoke Free Partnership estimates that 160 people
work in Brussels to defend the interests of tobacco manufacturers. There were already more
than 200 people surveying the corridors of the European Parliament when the Tobacco
Products Directive was drafted in 2013, a ratio of one lobbyist to 3.5 MEPs. The ambition of

29 All EU States are parties to the Protocol except Bulgaria, Estonia, Italy and Romania.
30 Cour de Justice de l’Union européenne, 12 décembre 1972, International Fruit Company NV et autres contre Produktschap voor
Groenten en Fruit, C/21 à 24-72.
31 Pushkarev, N., et al., EU Public Health Policies - State of play, current and future challenges, Study for the Committee on the
Environment, Public Health and Food Safety of the European Parliament, Policy Department for Economic, Scientific and
Quality of Life Policies, European Parliament, Luxembourg, 2019.
https://www.europarl.europa.eu/RegData/etudes/STUD/2019/638426/IPOL_STU(2019)638426_EN.pdf
17
 the two directives has thus been greatly revised downwards, as illustrated by the fact that the
European tobacco traceability system is still not in line with the WHO Protocol32.
The same intensive lobbying approach is found today to postpone the revisions of these two
directives, as Lilia Olefir carefully explained to our working group.
Lilia Olefir recalled that the Commission launched the review process of this Directive in
2021 and that it had committed to submit a draft text on 7 December 2022. No official
explanation has been given for this rebuff, which Lilia Olefir attributes to ‘the invisible hand
of the tobacco industry’. The Commission merely justified this postponement to the Greek
calends ‘due to unforeseen circumstances’. In addition, in January 2024, the Commission
postponed the publication of its recommendations on the tobacco-free environment, which
was to incorporate the aerosols of e-cigarettes and heated tobacco devices, as part of the
Europe’s Beating Cancer Plan (EBCP). Stefan De Keersmaecker, DG Health’s spokesperson
for the Commission, said the project had been delayed because it “requires further work and
evidence gathering”33.
For Lilia Olefir, these relentless postponements are the Commission’s response to the
pressures of the tobacco industry, since a revision of the TTD Directive would certainly take
the form of an increase in taxes on cigarettes and rolling tobacco, the imposition of taxes on
new tobacco products and the implementation of measures in line with the WHO Protocol.

A strategy to repel any inclination to govern tobacco

According to Olefir, lobbying by cigar makers to push back the revisions of the TTD and
TPD directives to the fullest extent also prevents the implementation of the EBCP. The
Europe’s Beating Cancer Plan, published on 3 February 2021, identifies revisions to the two
tobacco directives as opportunities to reduce smoking, especially among young Europeans. It
also aims to enable better implementation of the WHO Framework Convention on Tobacco
Control.
Through the ambitious goal of a tobacco-free Europe by 2040, the EBCP aims to reduce
tobacco consumption to less than 5 % by 2040. This is achievable only if the two tobacco
directives are revised as soon as possible.
The Commission’s choice to constantly delay the revision of these two directives leaves time
for tobacco manufacturers to prepare their arguments and lobbying strategy to preserve their
profits. The current European traceability system, which is controversial because it is based
on a solution provided by Philip Morris, allows cigar makers to conceal the overproduction
and over-supply they organise in all Member States. Current legislation and taxation are also
in favour of new tobacco products such as heated tobacco, e-cigarettes containing nicotine or
“snus” tobacco pockets. The tobacco industry, moreover, uses the same strings to defend new
tobacco products as many decades ago with manufactured cigarettes through false scientific

32 « Industrie du tabac : plus d’un million d’euros dépensés en lobbying pour freiner les politiques de santé publique », Site
d’Alliance Contre le Tabac, 4 décembre 2023.
33 « Commission delays smoking file as Belgian presidency calls foul », Politico, 31 janvier 2024.
18
 analyses and misleading studies34. This sap job pays: politicians, civil servants and journalists
take up these studies, publish them, take them into account.

Flavors of corruption
Thus, while the EBCP has been validated by both the Commission and the European
Parliament, the lobbying of cigar-makers is not only carried out in Brussels. Tobacco
manufacturers are present in all EU countries. In the few Member States they still have
manufacturing plants, which allows them to blackmail employment on local governments.
This is important when voting in the Council of the EU which requires unanimity. They are
also very influential in countries where tobacco manufacturers are still allowed to finance
political life35. This is the case in Germany in particular, where elected officials and
politicians often relay the arguments of the tobacco industry.

No transparency of the exchanges between the Commission and Big Tobacco

The NGO Corporate Europe Observatory (CEO) scrutinises and denounces the links between
institutions and lobbies, and its studies on the links between the Commission and tobacco
manufacturers are references.
During our round table on 19 April 2023, Olivier Hoedeman, co-founder and coordinator of
campaigns and research of CEO, detailed the strategy of tobacco manufacturers through the
analysis of the multiple requests for appointments and the proposals of tobacco
representatives to the various Commission DGs and services. The report Targeting the
European Commission: Big Tobacco’s 7 lobbying techniques of Corporate Europe
Observatory and the European Public Health Alliance (EPHA), in collaboration with the
Global Tobacco Monitoring Network Stopping Tobacco Organisations and Products (STOP),
published in 2021, examines the main written and physical contacts between tobacco industry
representatives and the Commission in 2019.36 37
Thus, the documents requested and obtained – after a long wait – by Corporate Europe
Observatory show that the lobbying of the tobacco industry focused on three main priorities
between 2017 and 2019: delay the revision of EU tobacco taxation legislation, influence EU
trade negotiations with Latin America, and finally shape the new European system of
traceability of tobacco products to address the issue of illicit trade. More generally, Olivier
Hoedeman distinguishes seven key tactics in lobbying the tobacco industry:
1. Promoting untruths
2. Postponing regulations
3. Playing the victim

34 « Influence de l’industrie du tabac dans le lobbying pro-vapotage : l’exempe du Royaume-Uni », Site de Génération Sans Tabac,
3 janvier 2024.
35 « Dossier de presse. L’ingérence de l’industrie du tabac : ce qu’il faut savoir », 31 mai 2012.
36 Smoke ans Mirrors : Weak EU transparency rules allow tobacco industry lobbyists to dodge scrutiny, Corporate Europe
Observatory (CEO), 2 July 2020 https://corporateeurope.org/en/2020/07/smoke-and-mirrors
37 Targeting the European Commission: Big Tobacco’s 7 lobbying techniques, CEO / EPHA, 10 march 2021
https://corporateeurope.org/sites/default/files/2021-03/EPHA-Report.pdf
19
 4. Protesting against regulators
5. Preying on third countries
6. Pushing new technologies
7. Playing the EC off against Member States

None of these tactics are truly new: for decades, cigarettiers have been presenting studies to
support their comments and requests. However, it has been proven that many of their studies
are unreliable or even falsified38. The KPMG 2022 report commissioned by Philips Morris on
Illicit cigarette consumption in the EU, UK, Norway and Switzerland is one of the most
egregious recent examples.39 Tobacco manufacturers also have no hesitation in paying for
studies by scientists or doctors with little regard to the rules of ethics40.

“The lack of transparency in the EU has long allowed tobacco industry lobbyists to avoid
controls, and this report suggests that if tobacco industry lobbying continues unchecked,
policies to help people could end up serving the interests of tobacco manufacturers,” warned
Olivier Hoedeman, also co-founder of the European coalition Alliance for Lobbying
Transparency and Ethics Regulation (ALTER-EU), during the 2021 Big Tobacco Report.

For the strict application of Article 5.3 of the WHO FCTC

In view of this state of affairs of greatest concern, Olivier Hoedeman regrets that none of the
DGs, with the exception of DG Health, comply with the requirements for lobbying and
transparency required by Article 5.3 of the WHO Framework Convention for Tobacco
Control (WHO FCTC), which has been ratified by the EU and the Member States.41
According to Olivier Hoedeman, in order to remedy this situation, the Commission should, as
a first step, draw up a proactive list of all meetings, minutes and correspondence existing
between Commission officials and the tobacco industry and/or its representatives in a central
and easily accessible public register.42 Such a scheme is already being implemented in the
Netherlands, for example. Secondly, a clear policy on how officials should manage their
contacts with the tobacco industry needs to be defined and put in place.

38 « Comment l’industrie du tabac instrumentalise le commerce illicite pour freiner les politiques de santé publique », Site
d’Alliance Contre le Tabac, 28 juin 2023. https://alliancecontreletabac.org/wp-content/uploads/2023/06/CP-
ACT_Commerce_illicite_20230628.pdf
39 Ibid.
40 « David Khayat, ancien Monsieur cancer au service de l’industrie du tabac », Site de Génération Sans Tabac, 15 avril 2021.
https://www.generationsanstabac.org/actualites/david-khayat-ancien-monsieur-cancer-industrie-tabac
41 Article 5.3 excerpt : « In setting and implementing their public health policies with respect to tobacco control, Parties shall act
to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law ».
In addition, Guidelines for implementation of article 5.3 article stressed that « Parties should ensure that any interaction with
the tobacco industry on matters related to tobacco control or public health is accountable and transparent » and « Parties
should interact with the tobacco industry only when and to the extent strictly necessary to enable them to effectively regulate the
tobacco industry and tobacco products. . https://fctc.who.int/publications/m/item/guidelines-for-implementation-of-article-5.3
42 Guidelines for implementation of article 5.3 states in paragraph 2.2 « Where interactions with the tobacco industry are
necessary, Parties should ensure that such interactions are conducted transparently. Whenever possible, interactions should be
conducted in public, for example through public hearings, public notice of interactions, disclosure of records of such
interactions to the public.».
20
 The interpretation of the public interest in European law should be broadened to include
transparency in lobbying and the protection of public health as objections of an overriding
interest, which are enforceable against the protection of commercial interests.
The recommendations of CEO, EPHA and STOP call for a full transparency obligation
regarding trade with tobacco manufacturers and the publication of all documents they share
with Commissioners, officials and MEPs.
Rarely does the Commission agree to distribute the letters and reports of its exchanges with
tobacco manufacturers and when it does so, it is by masking most of the elements so that they
cannot be exploited.43
However, in view of the public health challenges it entails and the social cost it generates,
transparency and exemplarity must be demanded jointly by the European Parliament, the
European Ombudsman and NGOs in view of the revision of the TTD and DPD Directives.
The documents obtained by the Ombudsman reveal how the European Union is struggling to
implement a policy of systematic and proactive transparency regarding meetings with
tobacco lobbyists. These persistent shortcomings, which make the European Commission
vulnerable to the influence of industry representatives, have been described as
“maladministration” by the European Ombudsman Emily O'Reilly.
This transparency requirement should also be extended to external companies, associations
and lobbying firms that work together to defend the interests of tobacco manufacturers.

The European Ombudsman’s warnings about the links between the Commission and
tobacco lobbies

In response to this, the intervention of Carl Dolan, Senior Adviser to the European
Ombudsman, showed the way ahead in order to give the European institutions effective
control powers. For example, it points to shortcomings in monitoring the revolving doors of
Commission officials, and in the voluntary nature of registration in the Transparency
Register.
As early as 2016, the European Ombudsman concluded that “the Commission’s refusal to
publish online the details of all the meetings that its services and staff have with the tobacco
industry constitutes a case of maladministration”.44 Following the European Ombudsman’s
requests for the Commission to put in place a “proactive transparency policy regarding
meetings with tobacco industry lobbyists” for all Commission services and staff – as
enshrined in the WHO Framework Convention on Tobacco Control (FCTC) – the
Commission stated that its online transparency regarding lobbying meetings of a limited
number of senior officials and the possibility of requesting access to documents through EU
Access to Information (AIP) legislation was sufficient.

43 https://www.asktheeu.org/en/request/contacts_with_the_tobacco_indust
44 Decision on the European Commission’s interaction with interest representatives of the tobacco industry (Case OI/6/2021/KR),
European Ombudsman, 19 dec 2023 https://www.ombudsman.europa.eu/fr/decision/en/179448
21
At the hearing of the Ombudsman in the European Parliament, the Ombudsman delivered the
preliminary conclusions of her inquiry into the European Commission’s interactions with
tobacco interest representatives in 2020 and 2021. At that time, the Commission’s
investigation indicates that many Commission departments had meetings with industry.

Ten Directorates-General and Services are concerned: DG AGRI, DG CLIMA, DG ENV, DG

FISMA, DG GROW, DG MOVE, DG NEAR, DG COMMERCE and OLAF. The meetings
took place at all levels: with commissioners, members of their cabinets or directors-general,
but also at lower levels of the hierarchy on which details have not always been made
available to the public. However, only the Health Service (DG SANTE) and the Tax and
Customs Service (DG TAXUD) proactively make public the existence and the minutes of
these interactions, regardless of the grade of the staff concerned. “The Ombudsman therefore
wonders how the Commission can reassure the public that its interactions with tobacco
lobbyists do not undermine public health policies” – as required by the FCTC – if the minutes
do not exist in the detail of what actually happened at those meetings. ».

For Ombudswoman Emily O’Reilly, “the Commission’s failure to take a consistent approach
across all its departments to complying with its obligations concerning the transparency of
interactions with tobacco industry representatives constitutes maladministration. This
included the failure to keep and make available minutes of meetings with tobacco interest
representatives, as well as the failure to ensure a systemic assessment, across all directorates-
general, as to whether potential meetings with tobacco industry representatives are needed.“
“The fact that many Commission services interact with interest representatives of the tobacco
industry shows that the interests of the tobacco sector are transversal,” concluded Emily
O'Reilly.

Eight months later, on December 2023, the Ombudsman insisted. In a follow-up letter
addressed to the Commission and its senior management, she pointed out: “in order to
prevent the tobacco industry from trying to put pressure on different parts of the Commission,
it is essential that proactive transparency requirements are applied to all services and to all
levels of staff”. The Ombudswoman asked also the Commission to report back by 30 June
2024 on the outcome of the assessment of the risk of exposure of the European Commission
management to the tobacco industry and the progress made on that basis.

Transparency, a democratic challenge

With each new revelation, the Commission believes that “the rules have been respected”.
This is the answer that is systematically addressed to MEPs and Corporate Europe
Observatory when they denounce the Commission’s lack of transparency and laxity on
revolving door cases. This is in particular what was answered by the French newspaper Le
Canard Enchainé, when he asked the Commission about the Dentsu Tracking/Jan Hoffmann
22
 scandal45. This is also regularly retorted by the Commission to the European Ombudsman
when it calls on the Commission to respect the commitments of non-favorism and
transparency with regard to tobacco that the Commission itself adopted by ratifying the WHO
Framework Convention on Tobacco Control.

This situation, if not corrected, could lead to citizens’ disinterest and thus to increase
abstention from the European elections. The purpose of these observations is not to disprove
all the members and officials of the Commission, but rather to shed light on certain excesses
that harm the interest of the Europeans. It must be noted that until now, the latter has largely
ignored the alerts transmitted to it. The aim of this White Paper is also to raise awareness
among our peers, elected representatives, but also to all European citizens to make the
Commission heard right and to bring about profound and lasting changes.

45 « Le pantouflage fait un tabac à Bruxelles », Canard Enchaîné du 23 novembre 2022.

23
 Chapter 2 : Taxation and traceability: levers in the fight against parallel trade

WHO notes that “a 10 % increase in tobacco prices leads to a drop in consumption of around
4 % in high-income countries, and by around 5 % in low- and middle-income countries” 46.

From the introduction of the round table organised on 14 June 2023 on this subject, Anne-
Sophie Pelletier recalled that the three MEP members of the informal group had tabled a
written question (see copy in Annexes) underlining the need for any increase in taxes to be
associated with the implementation of the WHO Protocol “to eliminate illicit tobacco trade”.
The MEP added that this increase in taxes should also apply to new tobacco products.47
Indeed, if the EU Member States implement the two main requirements of the Protocol,
namely the introduction of quotas for the delivery of tobacco according to domestic
consumption and traceability of tobacco products strictly independent of tobacco
manufacturers, they will be able to effectively apply the tax increases they wish. Finally,
Anne-Sophie Pelletier clarified that it was necessary to ensure that tobacco manufacturers
could not take advantage of the increase in taxes to increase their profits, especially when the
increase was linked to a desire to preserve public health. The aim is not only to increase the
minimum collection48 but also to increase excise duties.

A deleterious delay for the Europe’s Beating Cancer Plan

Martin Drago of Alliance Against Tobacco, extending Mrs Pelletier’s remarks, first of all
emphasised the instrumentalisation of parallel trade as a lobbying argument. He denounced
the lobbying of tobacco manufacturers, who managed to convince a majority of
parliamentarians to postpone the revision of the directive on the taxation of excise products,
including tobacco (TTD). This lack of revision prevents new tobacco products from being
taxed, due to a lack of a harmonised basis within the EU. For example, France has not been
able to tax heated tobacco at the same level as cigarettes, which is recommended by the
WHO.
Lilia Olefir, after showing that the tobacco industry has also convinced the Commission not
to launch the TTD revision procedure, explains the commercial and financial interest that
motivates tobacco manufacturers: to date, new tobacco products account for 30 % of Philip
Morris International’s sales49. The establishment of taxation on these new products would
impact the market share of the industry, and would be a measure of general interest that can
protect our children and adolescents.

46 Fact sheet, Detail - Tobacco, Site de l’OMS. https://www.who.int/news-room/fact-sheets/detail/tobacco

47 “Contract between Dentsu and the European Commission on tobacco traceability”, Written Question by MEPs Anne-Sophie
Pelletier, Michele Rivasi and Pierre Larouturou, 9 mai 2023
48 the minimum rate of consumer duty that the state collects on a given number of cigarettes sold. A method of calculating this
consumer duty exists: if the result is less than the minimum of perception, the latter is received..
49 « Le géant du tabac PMI annonce une importante transition, mais son chiffre d’affaire donne d’autres informations », Trends
Tendances, 3 août 2022.
24
 For Lilia Olefir, “the absence of the revision of the TTD Directive on taxes will lead to the
fiasco of the European Beating Cancer Plan (EBCP)” which aims to fall to 5 % of smokers in
2040, while 23 % of adults today consume tobacco products.

Increasing tobacco taxes, a solution with multiple benefits

Dr. Robert Branston, Associate Professor at the University of Bath, and part of the Tobacco
Control Research Group (TCRG), insists that raising tobacco taxes is a “win-win” solution:
States protect their population and receive more tax revenues. The key issue, according to
him, is to think about taxation as a whole, affecting all tobacco products, otherwise such a
measure will not achieve the objective of reducing consumption. Roll-your-own, also known
as fine out tobacco, for example, benefits from lower taxation than cigarettes, which
encourages consumers to give preference to these products in order to lower the cost of their
consumption. Dr. Branston advocated identical taxation of cigarettes and roll-your-own
tobacco.
Finally, he recalls that the main tobacco manufacturers make a collective annual profit of $55
billion. Faced with this figure, MEPs Michèle Rivasi and Anne-Sophie Pelletier proposed the
introduction of a tax on the profits of cigar makers to finance the public and environmental
health damage they cause as a result of their activity.

The emblematic case of the “Dentsu Tracking/Jan Hoffmann” Connections

During their work, the members of the Working Group referred on several occasions to the
so-called “Dentsu Tracking/Jan Hoffmann” case, the name of the conflict of interest that
hinders the development of the European system of traceability of tobacco products. This
case concerns the choice of the service provider Dentsu Tracking, appointed without a call for
tenders or transparent procedure, and the suspicious recruitment of a member of DG SANTE,
Jan Hoffmann, within the same company.
Dentsu International is a global marketing and communications company based in Japan,
which operates in more than 145 countries and employs more than 66 000 people 50. The
company has been formed in 2012 following the marriage of Japanese Dentsu and British
Aegis51 . The company has been divided into several subsidiaries, including Dentsu Tracking,
a subsidiary specialised in the management of the supply chain and product traceability, with
a concentration on regulated markets such as tobacco and covering the entire chain of
suppliers of tobacco production in the European Union region.52
Dentsu Tracking’s projects in the field of tobacco in Europe include the establishment of a
tracking and traceability system to combat illicit trade and recover excise taxes, the provision
of tracking and traceability solutions for government and tax authorities, and the design of a
modular system that can be adjusted to the specific needs of countries, including digital

50 Dentsu Switzerland, https://www.dentsu.com/ch/en/who-we-are/dentsu-switzerland

51 « Japanese ad giant Dentsu enters Europe with Aegis », Reuters, 12 july 2012.
52 Site de Dentsu Tracking.https://dentsutracking.com/about-us/
25
 markings, tax stamp management, production line monitoring, data intelligence and other
services.

In October 2022, the co-chair of the working group, Michèle Rivasi, alerted Commission
President Ursula von der Leyen to this case, before the French newspaper Le Canard
Enchaîné, in its edition of 30 November 2022, taunted ‘the revolving door that makes a
tobacco in Brussels’, denouncing ‘ the recruitment of Jan Hoffmann, an official straight from
the Directorate-General for Health and Food Safety of the European Commission (DG
SANTE), by the company Dentsu, Brussels’ favorite provider in the fight against cigarette
trafficking. A company already in the focus of public health specialists for its links with
tobacco manufacturers’.

This case focuses on the topics discussed in the course of our work: the close relationship
between the Commission and tobacco manufacturers, the management of the revolving door
and the supervision of the recruitment of Jan Hoffmann by a service provider he himself
helped to choose, while the technical certifications prove to be inconsistent with the
provisions of the Protocol to Eliminate Illicit Trade in Tobacco Products. Provisions,
however, were ratified by most EU members and the Commission.

Revolving doors of interests : From Michel Petite to Jan Hoffmann

At first glance, the Dentsu Tracking/Jan Hoffmann case sounds like yet another conflict of
interest. But it is much more than that. It first resonates with a previous case of revolving
doors and conflict of interest with the tobacco industry which has been chronicled: Michel
Petite’s, 10 years ago. This former senior official of the European Commission, who was
Director-General of the Legal Service from 2011 to 2007, was distinguished after joining the
law firm Clifford Chance in 2008 with the award of the “Worst EU Lobbying Award” with
which NGOs pinpoint the most dubious lobbying practices. In the Commission, Michele
Petite is the one who negotiated three of the “cooperation agreements” that we are talking
about in our first part. Now a “advisory lawyer” at Clifford Chance, he finds Philip Morris
among the clients of the law firm. Worse, while Michel Petite works for Philip Morris
International at Clifford Chance, the Commission appoints him to head the Ethics Committee,
which is responsible for assessing the risks of conflicts of interest for European
Commissioners. Chairman of the Ethics Committee from 2009 to 2012 and then renewed for
3 years, he will finally be dismissed one year after his renewal, following the complaint filed
in February 2013 by the NGOs LobbyControl, Corporate Accountability International and
Corporate Europe Observatory53.

“Petite is the link between the tobacco industry and the Commission’s senior officials. (...) He
has met on several occasions with the Commission’s legal services on the Tobacco Directive.
And according to what was reported to me by my team, the Commission’s legal services
changed their previous views as a result of these contacts", declared to the Swiss newspaper
Le Temps54 Maltese John Dalli, former Health Commissioner in charge of the tobacco file,

53 « Conflit d’intérêt et Directive tabac : grande nouvelle, Michel Petite remplacé », Site de Michèle Rivasi, 18 décembre 2013.
54 Philip Morris accusé de corruption à Bruxelles, Le Temps, 4 juillet 2014.
26
 the day after his dismissal in 2014 by José Manuel Barroso, during his second term as
President of the European Commission, on suspicion of trafficking of influence with a
tobacco manufacturer to suck.

This Michel Petite case, which took place during the preparations for the TPD Directive in
2014, reflects the existing and lasting porosity between the European Commission and the
tobacco industry that the Dentsu/Hoffmann case confirms several years later.

The issues of turning doors, conflicts of interest or trade in influence raised by the
Dentsu/Hofmann case have a direct impact on the public finances of the 27 Member States,
representing an estimated shortfall of EUR 20 billion per year 55. In addition, by prioritising
their financial and commercial interests, smoking is also promoted.
By maintaining opacity and impunity on this matter, it is also democracy that is poisoned.
Shedding light on this case also helps to shed light on possible behind-the-scenes officials.

The Dentsu/Hoffmann case is, in fact, all the more troubling that, in essence, it only benefits
interests outside the EU. Dentsu Tracking is based in Geneva, Switzerland. Philip Morris
International is an American company, British American Tobacco and Imperial Tobacco are
British, and Japan Tobacco International is Japanese. All these groups are regularly accused
of tax optimisation56.

The influence of the tobacco industry lobbies on the development of the traceability
system for tobacco products
Dr. Allen Gallagher of the Tobacco Control Research Group within the University of Bath has
studied the tobacco industry’s lobbying efforts relating to the EU’s tobacco “Track & Trace”
(T&T) system. In 2016, the European Commission organised a public consultation on the
implementation of the T&T system. Dr Gallagher’s analysis of the 197 respondents found
that 131 (66.4 %) had financial links with industry and 29 (22.1 %) of these were not
transparent. Almost half of the respondents identified (87) were trade associations, the
majority of which (74 out of 87) had financial links to the tobacco industry. Collectively,
respondents with a financial connection supported an industry-managed T&T solution.
The industry’s use of discrete influence via front groups and intermediary organisations is
common. For example, the Digital Coding and Tracking Association (DCTA), an association
set up by the tobacco industry, rarely discloses its financial ties with the tobacco industry. The
DCTA was launched in 2023 by Philip Morris International, British American Tobacco,
Japan Tobacco International and Imperial Tobacco57, and has been used to promote the
Codentify system, the technology originally developed and patented by Philip Morris
International.. The DCTA is not entered in the Transparency Register, nor in the common

55 « L’argent du trafic du tabac, c’est 20 potentiels milliards par an pour le développement de l’Afrique », Marianne, 16 mars
2017.
56 « Aux Pays-Bas, l’évasion fiscale massive des géants du tabac », Courrier International, 30 octobre 2020.
57 « Digital Coding and Tracing Association », TobaccoTactics, University of Bath, 6 octobre 2023.
https://tobaccotactics.org/article/digital-coding-tracking-association-dcta/
27
 database of the Council, the Commission and the European Parliament, which lists ‘interest
representatives’.
Dr. Gallagher recommends strengthening the transparency register of the European
institutions by requiring registered organisations to provide detailed information on the
identity of their members and the composition of the structures to which they are affiliated.
In 2013, the EU signed the Protocol to Eliminate Illicit Trade in Tobacco Products. The
requirements of this international treaty have been public since its drafting in 2012, including
its Article 8 on strict independence from the tobacco industry for any traceability system.
WHO opposed the use of the Codentify system in the European tobacco tracking system, as
well as the Framework Convention Alliance (FCA) – now known as the Global Alliance for
Tobacco Control (GATC), which brings together nearly 500 NGOs in more than 100
countries. Despite all these warnings, the Commission is imposing a traceability system for
tobacco products that it knows is contrary to the Protocol. In doing so, the Commission
continues to play a role in the tobacco industry.
Asked about the problematic situation of Dentsu Tracking, which has been in charge, within
the European market, of the traceability of tobacco products since 2019, under particularly
opaque conditions, Michèle Rivasi deplores that "since there has been traceability [in the
EU], has the illicit trade decreased? No, no! That means it’s a failure. And why is it a failure?
Because there is no will for an independent traceability system”.

What are the entangled connections between the Commission, the tobacco industry and
Dentsu Tracking?

When drafting the text, Article 14 of the TPD, in the version adopted by the European
Parliament in October 2013, incorporating the text of the Protocol, replaced by the current
Articles 15 and 16 of the TPD to create a specific European system for the traceability of
tobacco products circumventing the commitments of the Protocol.
This situation is all the more disturbing as Dentsu Tracking’s contract, which was due to end
in December 2023, was quietly renewed last June. This renewal of Dentsu Tracking’s contract
as a ‘secondary deposit’ of the trade identification and traceability system data was
announced on 18 July 2023 by DG SANTE in response to a written question tabled on 9 May
2023 by the co-chairs of the parliamentary working group Anne-Sophie Pelletier (The Left),
Michèle Rivasi (Greens/EFA) and Pierre Larrouturou (S&D) 58. Despite the Commission’s
denials, the decision to renew the contract with Dentsu and therefore to maintain a system not
compliant with the Protocol was once again taken without publicity, without a call for tenders
and without an efficiency evaluation report.

At the end of November 2017, the European Commission adopted the“implementing and
delegated acts” on the traceability of tobacco products. These acts are put forward by the

58 Answer to the Written Question, 9th may 2023, Contract between Dentsu and European Commission on tobacco traceability :
https://www.europarl.europa.eu/doceo/document/E-9-2023-001518-ASW_EN.html
28
 Commission to justify the conformity of the procedures followed in its selection of the
service provider Dentsu.

These two implementing texts, which derive from Articles 15 and 16 of the DPT Directive
and drafted in a particularly technical manner, are in line with the interests of the tobacco
industry.

Why did the Commission conduct a targeted consultation in November 2022 to revise part of
the European traceability system, when the entire European tobacco trade traceability system
is not in line with the WHO Protocol? Why not completely recast the system following the
publication of an evaluation report or the proposed revision of TPD, the publication of which
has since been promised at the end of 2022? The Commission does not undertake any
voluntary communication on this subject, merely answering some of the questions addressed
to it – in a lack of detail and with some latency.

Behind Dentsu, the tobacco invisible hand control on the management of the traceability
of tobacco trade in Europe

Here we point out another anomaly: the absence of Dentsu Tracking in the EU Common
Transparency Register. Worse, our verifications revealed that in reality no company of the
Dentsu Group, not even Dentsu Aegis Network Switzerland with which the Commission
declares to have renewed the contract in June 2023, is entered in the Transparency Register
common to the European institutions.
This lack of management of Dentsu and its subsidiaries is regrettable, and the resulting lack
of transparency seems unjustifiable and particularly damaging. We are surprised that the
Commission can agree to work and have close relations with representatives of a company
that does not fulfil its transparency obligations.
Moreover, the role of one of the Commission’s interlocutors raises questions, with Jan
Hoffman combining, as demonstrated, his experience as a manager of DG Health and his
current position as responsible for compliance at Dentsu Tracking. This question is reinforced
by the fact that this former manager of DG SANT worked in the Commission DG which – as
recalled in the opinions of the European Ombudsman in 2016 and 2023 59 – was particularly
exemplary in its compliance with the transparency requirements in its meetings and
exchanges with the tobacco industry. Thus, Dentsu’s failure to comply with its transparency
obligations required by EU codes of conduct seems all the more problematic.

From Codentify to Dentsu Tracking, a story to trace

59 Ombudsman finds lack of transparency in the Commission’s meetings with tobacco lobbyists”, European Ombudsman’s
website, 19 April 2023. https://www.ombudsman.europa.eu/fr/news-document/en/168641
29
 We have the right to question the real links between the companies Dentsu Tracking, Dentsu
Aegis Network Switzerland and Dentsu International in the field of traceability of the tobacco
trade in Europe, due to the troubled history of Codentify, the tracking and tracing system
developed almost 20 years ago by Philip Morris International.

The international network of anti-corruption journalists OCCRP conducted an investigation 60

to obtain an initial overview of the situation. In 2005, employees of Philips Morris
International filed the patent for Codentify, a tobacco traceability system based on barcodes
on cigarette packs. The leak of a memo reveals that in 2010 Philip Morris International (PMI)
granted a free license to its three main competitors for Codentify, and that their common
strategy is to make this technology available to governments. To promote Codentify to
government agencies, the four leading tobacco manufacturers – Philip Morris, British
American Tobacco, Japan Tobacco and Imperial Tobacco – created in 2011 and officially
launched in 2013 a new organisation: the Digital Coding and Tracking Association – the
same DCTA that did not indicate its links to the industry in its submission to the European
Commission’s public consultation on tobacco traceability and security features, as reported at
a parliamentary working group hearing by Dr. Allen Gallagher.

Journalists also note the involvement of IT services company Atos, led from 2009 to 2019 by
Thierry Breton, the current European Commissioner for Industry, Digital, Defence, Space,
Tourism and the Internal Market. The Atos group, apparently engaged in the development of
Codentify from its inception, also promoted Codentify in 2011 and 2014 via its subsidiary
Worldline, in other markets, particularly those in Southeast Asia.

In 2017, Dentsu Aegis Network acquired Geneva’s IT services company Blue Infinity, which
also contributed to the development of Codentify. Blue Infinity, now a member of Dentsu
Aegis Network, became Isobar in 2019. A year earlier, in 2016, DCTA sold Codentify’s
rightsto Inexto, a company founded in Switzerland in Lausanne and a subsidiary of the
French group Impala. “17 months after the tobacco multinationals sold Codentify to Inexto
and Philip Morris International said Inexto was independent, leaked documents suggest that
Inexto and transnational tobacco companies continued to maintain financial and operational
relationships,” said researcher Dr. Allen Gallagher of the Tobacco Contro Research Group,
University of Bath.

“Inexto is not part of the tobacco industry and does not represent the interests of the tobacco
industry,” the company emailed OCCRP journalists in 2020 61. As of that date,
TobaccoTactics.org from the University of Bath reports, Inexto’s top managers were long-
time former employees of Philip Morris International, named as inventors on patents relating
to Codentify. For example, Inexto’s Managing Director from 2016 to 2023, Philippe
Chatelain, was Director of Product Monitoring, Intelligence and Security at PMI for 14 years,
60 The EU Track and Trace Smokescreen, OCCRP, 11 mars 2020. https://www.occrp.org/en/loosetobacco/without-a-trace/the-eus-
track-trace-smokescreen
61 Ibid
30
 and one of the inventors of Codentify62, alongside Erwan Fradet, Codentify Product Manager
at PMI for five and a half years, and Patrick Chanez, who worked for more than ten years at
PMI in the research and development of technologies to combat illicit trade. Both are now
also executives of Inexto. In all, as of May 2020, according to TobaccoTactics.org, 16 Inexto
staff were former PMI employees, and a number of tobacco industry executives who
previously worked for or with DCTA worked for Inexto – including two former directors of
British American Tobacco, also founders of DCTA63.

Further, research by Dr. Allen Gallagher raises questions over the extent to which the EU’s
“Track & Trace” (T&T) system is compatible with the Protocol on Illicit Trade because of its
“mixed” governance and the fact that seven of the eight organisations approved as data
repositories providers have pre-existing trade links with the industry. Dr. Gallagher concludes
that“Parties to the Protocol should ensure their own tracking and tracing systems are fully
consistent with the Protocol and its values rather than simply replicating the EU’s model”64.

The Commission culture of opacity

For months, the Commission refused to respond to Michèle Rivasi’s questions and requests
for documents. The Commission ended up meeting the MEP’s requirements by sending
hundreds of documents, e-mail exchanges, all of which are scratched (see annexes) and
unusable.
This attitude of the Commission illustrates the lack of consideration of Commission officials
for the European Parliament and for parliamentarians, who represent all European citizens. It
also demonstrates a culture of inter-self, protected by the Commission. These exchanges
between the Commission and Dentsu also prove the non-compliance with Dentsu Tracking’s
obligations, which is not included in the Transparency Register despite its lobbying and
commercial activities.

Thus, Dentsu Tracking obtained the market for traceability of tobacco products within the EU
without any transparency. It obtained from the Commission the renewal of its contract in
December 2023 in the same opacity, despite the denunciation of the conflict of interest
Dentsu/Hoffmann. The role and responsability of the European Parliament in its monitoring
and control of the Commission’s activities is thus greatly affected and severely crippled by
this lack of transparency.
It will therefore be up to the European Parliament, after the publication of this White Paper,
to use all possible means, including judicial ones, to shed light on the nature of the relations
between the Commission and Dentsu, and on the potential implications of a large-scale
conflict of interest on such a sensitive and crucial subject as this one.

62 « L’industrie du tabac continue de saper la lutte contre le commerce illiicte des produits du tabac », Site du Comité National
Contre le Tabac, 20 juillet 2018.
63 Digital Coding and Tracking Association, Site de l’Université de Bath, 6 octobre 2023.
64 Gallagher AWA, Gilmore AB, Eads MTracking and tracing the tobacco industry: potential tobacco industry influence over the
EU’s system for tobacco traceability and security features. Tobacco Control 2020;29:e56-e62.
https://tobaccocontrol.bmj.com/content/29/e1/e56
31
 Chapitre 3 : The hidden costs of tobacco on the environment

The issue of smoking refers primarily to health and social damage, the human and financial
costs of which are excessive for both smokers and non-smokers. However, the environmental
cost of the tobacco industry is also a major concern, and represents an equally real danger.
According to the WHO report published in 2022 65, in addition to the tobacco industry being
responsible each year for more than 8 million deaths, it also leads to the destruction of 600
million trees, and the clearing of 200 000 hectares of land, and the consumption of 22 billion
tons of water. Tobacco production, processing and transport are responsible for 84 million
tonnes of CO2 emissions: that is the equivalent of the annual CO2 emitted by a country like
Peru.

We discussed this topic of the hidden environmental costs of tobacco at the round table held
on 4th October 2023 in Strasbourg, and Kelvin Khow, Programme Manager at WHO
summarised with a shock formula: “ tobacco kills us and kills the planet, soils and forests”,
with reference to World No Tobacco Day 2022, the theme of which was: ‘Poisoning our
planet : #TobaccoExposed’.

Kelvin Khow recalled that the WHO Framework Convention on Tobacco Control (FCTC),
which entered into force in February 2005 and has been ratified by 183 Parties, including the
EU, was already exposing and referencing environmental issues. Article 18 of the WHO
FCTC invites the Parties to ‘take due account of the protection of human health with regard
to the environment with regard to tobacco cultivation and the manufacture of tobacco
products in their respective territories’. This objective shall be accompanied by a
consideration in Article 17 of the necessary transitional measures for farmers and workers in
the tobacco industry, which must be put in place through the cooperation of the Parties with
each other and with relevant regional and international organisations.

Beyond the harmful smoke of cigarettes that diffuse in the air and the butts that pollute
waterways and oceans, the tobacco industry has a significant impact on the environment at
every stage of its production. During our discussions within the working group, Olivier
Milleron, author of the book Pourquoi fumer, c’est de droite 66 highlighted the massive use of
deforestation by the tobacco industry, to gain cultivable land and to dry tobacco leaves.
Chemicals are also used in large quantities, as the land dedicated to tobacco production is
used in monocultures. By adding to this the water consumption necessary for production and
manufacturing, then the transport and distribution of products, each stage of tobacco
production is an important source of environmental nuisance.

65 WHO raises alarm on tobacco industry environmental impact, OMS, 31 may 2022. https://www.who.int/news/item/31-05-
2022-who-raises-alarm-on-tobacco-industry-environmental-impact
66 Olivier Milleron, « Pourquoi fumer c’est de droite », ed.Textuel , 2022.
32
 Tobacco kills us and kills the planet, soils and forests

The statistics related to this pollution are particularly striking 67. Tobacco is grown in 125
countries, out of 3.2 million hectares of fertile land. 5 % of the global deforestation is linked
to tobacco cultivation. For every 15 packs of cigarettes made, a tree is cut down. Six trillion
cigarettes are produced each year: each of them requires 3.7 liters of water. Of the 6,000
billion cigarettes smoked each year, 90 % have a filter. Most of these butts (4,500 billion) end
up in nature, despite their cellulose acetate composition, one of the first plastic fibers
developed by the chemical industry. A single butt can pollute 500 litres of water or 1 m³ of
snow and takes 12 years to disappear.

Cigarette butts, the main source of microplastics

The Secretariat of the WHO FCTC representative’s alarm is corroborated by the speech of
Dr. Rosemary Hiscock, Research Associate at the Tobacco Control Research Group,
University of Bath, who drew attention to the environmental damage caused by butts, the
main source of microplastics pollution for thirty years.

WHO, in 2022: alerted us to the approximately 4500 billion cigarette filters polluting our
oceans, rivers, sidewalks, parks, soils and beaches every year68. These filter butts contribute to
microplastic pollution that can be found in water, in the air, but also in the lungs of smokers
and non-smokers.

Research published by the Truth Initiative 69 attests to the environmental toxicity of butts. In
addition, INERIS experiments demonstrated significant overmortality of earthworms and
inhibition of plant growth due to the presence of butts in the soil) and destruction of marine
life (a single butt can decimate half of a population of fish swimming in 1 liter of water,
according to a 2011 study by the University of San Diego) 70.

The ‘filter fraud’, to circumvent public health measures

Filters were marketed by the tobacco industry and became popular in the 1960s as health
concerns grew, explained Rosemary Hiscock. The tobacco industry uses marketing of filters
to deceive the smoker about the real danger of the product: the filter does not reduce the
health risk. Instead filters make the experience of smoking more enjoyable and easier.
Marketing for filters targets women and youth, two demographic groups where and easier
smoke could be more appealing.
67 « Poisoning our planet : #TobaccoExposed », WHO 2022.
68 « L’impact des mégots de cigarettes sur les ressources en eau », Site du Centre d'information sur l’eau.
69 « 5 ways cigarette litter impact the environment », Site de Truth Initiative, 21 avril 2017.
70 « Les déchets du tabac, des bombes écotoxiques pour la planète », Le Monde, 9 août 2023.
33
 Rosemary Hiscock also denounced an additional recent drift: the use of the filter by the
tobacco industry to circumvent public health measures. To undermine the ban on menthol or
flavours, tobacco manufacturers have marketed cigarettes with filters in which consumers can
insert flavour capsules, sold separately.

It is therefore more than likely that a ban on filters, which have no health justification, could
lead to changes in the perception of cigarettes and the habits of some of the consumers, and
furthermore would reduce opportunities for tobacco manufacturers to circumvent legislation.

New tobacco products are ecotoxic bombs

Whilst the environmental disaster caused by traditional cigarettes is becoming more widely
known, it is imperative that awareness is raised on the negative environmental implications of
“newer nicotine and tobacco products” according to Cassandre Bigaignon, European
advocacy officer within Alliance Against Tobacco (ACT), a collective of 23 public health
associations.

For Ms. Bigaignon, the newer nicotine and tobacco products are indeed ecotoxic bombs. The
development and marketing of these products (e-cigarettes, heated tobacco, snus and nicotine
pouchs) further accentuates the environmental footprint of the tobacco industry. Packaging,
casing, electronic components and batteries require plastic, metal and chemicals. Heated
tobacco products, such as Philip Morris International’s IQOS (PMI), combine the negative
effects of traditional cigarettes (presence of tobacco) with electronic cigarettes (plastics,
metals and battery). These products contain plastics, metal coils, atomisers, batteries,
microcontroller chips and chargers. For example, the blade of a heated tobacco product IQOS
is made of platinum and gold, covered with ceramic. Mining for metal and chemical
components create pollution.

The electronic cigarette consists of plastic and a battery containing lithium, bromine and
cobalt. Cassandre Bigaignon cites a study 71 that indicates that 60 % of French people have no
idea how to dispose of e-cigarettes components – they are sometimes discarded improperly as
litter or cause fires in landfill. Littered plastic, heavy metal and battery acid leaks have
irreversible effects on nature: inhibition of plant growth and germination, nutrient
malabsorption and soil contamination.
Like traditional cigarettes, the environmental pollution of new tobacco products exists at all
stages of their lifecycle: during their manufacture, when consumed with the vapours released,
and after use.

71 « Les produits du tabac et de la nicotine, des bombes écotoxiques pour notre planète », Site d’Alliance Contre le Tabac. https://
alliancecontreletabac.org/2023/06/22/tabacetenvironnement/
34
 Disposable e-cigarettes (sometimes known as ‘puffs’ or ‘bars’) accelerate this pollution.
These single-use devices generate a significant amount of waste, which is difficult to recycle.

Tobacco manufacturers lie about their environmental impact

Nicotine itself is described as a ‘hazardous waste’. Current disposal legislation treats e-

cigarettes as waste electrical and electronic equipment (WEEE) category 2. This category of
waste has become one of the largest in the world, amounting to between 20.000 and 25.000
tonnes each year in France alone72.
‘As a result of their composition, these devices are considered as Small Mixed Electrical
Waste (SMW) which, such as telephone or vacuum cleaner, must be subject to an individual
collection system (drainage or specific collection point)," recalls Surfrider Foundation and
Alliance Against Tobacco 73.
Theoretical recycling processes are, in practice, impossible to achieve because of complexity
and especially cost. For many disposable e-cigarettes, batteries are not readily extractable
because they are moulded directly into the plastic. The plastic itself does not biodegrade
easily and when it does, becomes harmful microplastic particles
In reality, there is no attempt made to recycle the majority of these devices. Today, if it is not
abandoned in the street, where they can end up in soil or waterways causing environmental
damage, this waste is thrown into household garbage bin in the household (64 % states
Surfrider Foundation and Allaiance Against Tobacco), preventing recycling.
This actuality is contrary to manufacturers’ claim.
As with the consequences of smoking, tobacco manufacturers largely conceal the real and
devastating impact of these new nicotine and tobacco products on the environment. Despite
this finding, British American Tobacco (BAT) states that it is ‘ incorporating sustainability
throughout the supply and production chain’. Philip Morris International (PMI) claims to act
“ in favour of climate protection and waste prevention” when Japan Tobacco International
(JTI) claims to minimise “ its impact on the environment”.

Revising the Tobacco Products Directive (TPD) to protect the climate and the planet

The revision of the TPD Directive should include the environmental impact of traditional
cigarettes and newer nicotine and tobacco products. More awareness of the environmental
damage caused by traditional and newer nicotineand tobacco products is needed. As
Cassandre Bigaignon discussed, two-thirds of smokers say that better information on the
environmental impact would encourage them to think about their consumption.74
In addition to potential users modifying their own behavio in response to new understanding
of the environmental implications, further legal restrictions are needed for these addictive

72 « Fumer tue, jeter un mégot pollue », Ministère de la transition écologique français, mars 2020.
73 « Les produits du tabac et de la nicotine, des bombes écotoxiques pour notre planète », Site d’Alliance Contre le Tabac.
74 Sondage BVA pour ACT-Alliance Contre le Tabac. Les indicateurs de l’ACT #7. Mai 2022
35
 products as the nicotine make them difficult to stop using. The irreversible environmental
damage of single use and disposable e-cigarettes has been clearly established and these
devices have been subject to prohibitions.
Despite the initiatives of several Member States to ban ‘the Puff’, the European Commission
has still not taken a position on the subject and several obstacles remain to the implmentation
of a general ban on Puff in Europe. However, the Batteries Directive sould work to outlaw
disposable e-cigarettes by 2026. Article 24 of the TPD 75 should also be revised to facilitate a
Member State’s willingness to ban certain tobacco products.
The case of Puff-type e-cigarettes should serve as a benchmark. What is possible for ‘the
Puff’ must be tomorrow for traditional cigarettes, other types of e-cigarettes, heated tobacco
products such as IQOS or nicotine pouches.
Experience shows that once a tobacco product is offered for sale, it becomes extremely
difficult, either to regulate it or, a fortiori, to prohibit it. Tobacco manufacturers finance
scientific studies commissioned to sow doubt about the need for restrictions of products on
the market, saving time and delays. The solution is simple: the revision of the Tobacco
Products Directive (TPD) must include the requirement of prior marketing authorisation for
any new product presented by tobacco manufacturers – such a scheme currently operates in
the USA.
The preservation of public health must prevail over the interests of the Single Market: this is
the meaning of the slogan “putting health in all policies”, as highlighted by the European
Commission in its promotion of a European Health Union.

The Polluter-Pays Principle in front of the tobacco lobby

Of course, additional binding measures are needed. Several recommendations of the WHO
Framework Convention on Tobacco Control (WHO FCTC) are particularly relevant. An
additional measure would be to impose on the tobacco industry the principle of extended
producer responsibility, so that it is held liable for the cost of disposing of waste nicotine and
tobacco products satisfactorily. A further measure would be prohibition of on cigarette filters,
whose health benefits are largely unproven and that harm the environment as a source of
plastics pollution.

From a financial point of view, let us apply the Polluter-Pays principle by imposing on
tobacco manufacturers, and other tobacco supply chain companies such as filter component
makers on the costs of satisfactory butt clean up. This includes the cost of carbon emissions,
air pollution and other environmental costs. This contribution could be equivalent to at least
20 % of the selling price of a pack of 20 cigarettes. Let us take the example of France: the
price of Marlboro’s package would increase from EUR 11.5 to EUR 13.80, of which EUR 2
would be spent on environmental protection measures. Considering that the selling price of a

75 This article prevents Member States from banning or restricting the marketing of tobacco or tobacco-related products once they
comply with the directive, except in the case of a public health situation specific to the said State, which in the case of new
products is not applicable since they cause public health problems in all Member States.
36
 pack of 20 cigarettes at the level of its actual social cost would be up to EUR 45, the price
level set by such an ecological malus should be considered acceptable.
As an “ecological malus” has been created to financially penalise the most polluting cars, an
“ecological malus” can be created on new tobacco products. A malus that could be here again
at least 20 % of the public sale price. The resulting benefits could be spent on environmental
conservation measures.

The need for European regulation on electronic waste and tobacco pollution

For a comprehensive approach and ability to fully protect the health of our citizens, it is
desirable to enshrine in EU law the prohibition for industry to describe any of its activities as
“environmentally responsible”. This will prevent cigarette manufacturers from receiving
awards or high ratings for environmental responsability. For example, in 2022, the CDP
awarded Philip Morris International a “Triple A” rating in carbon, forest and water
management. Such accolades obcure the company’s disastrous environmental impact.

It is to this end that, in the context of negotiations on the Green Claims 76 text, Anne-Sophie
Pelletier attempted to include in the text the ban on the tobacco industry from making green
claims on their products and their activities. This amendment, taken up initially by the
rapporteurs, faced the reluctance of right-wing groups. Finally, a reformulated version of this
amendment was included in the revised text. At the time of writing, the text was voted in
plenary.

It is also necessary to amend European legislation to prevent Member States from delegating
to the tobacco industry the management and awareness-raising of waste tobacco products. In
France, the tobacco industry has been officially designated as the provider of these services
by the Ministry of the Environment, via the eco-organisation ALCOME, which is connected
to the tobacco industry. There is an absence of an explicit ban on tobacco industry-related
entities involvement in European law. Tobacco manufacturers therefore use this decision to
carry out greenwashing actions, in this case butt clean up. The revision of the TPD Directive
must prohibit Member States making any such delegation.

76 Draft Directive on justification and communication on explicit environmental claims, 2023/0085 (COD).
37
 Conclusion

The members of the parliamentary working group on tobacco and the experts, researchers
and NGOs who accompanied them worked two years on the anti-smoking policy that the
European Union is supposed to lead in the 27 Member States to achieve its goal of a
“tobacco-free generation” in 2040.
The MEPs Working Group on Tobacco as a whole is particularly affected by the
Commission’s shortcomings and failures to fulfil its obligations, and more generally by the
lack of real political will at European level to put an end to the dominant position of the
tobacco industry. A real burst is necessary to hope to pursue a public health policy
commensurate with health, social and environmental issues.
The European Commission is working closely with tobacco manufacturers, in violation of the
WHO Framework Convention on Tobacco Control, which the EU has ratified. The
Commission refuses to answer questions and fulful requests for documents on its links with
tobacco manufacturers made by both MEPs and the European Ombudsman.The Commission
refuses to launch the revisions of the directives on tobacco taxation (TTD) and tobacco
products (TPD), which only industry opposes.
In June 2016, the Protocol to Eliminate Illicit Trade in Tobacco Products was ratified at the
request of the European Parliament. The inefficiency of the current European system of
traceability of tobacco products is largely established yet the Commission refuses to
implement the Protocol.
We are committed, and that is the meaning of this White Paper, to contribute to the
implementation of the recommendations set out below as soon as possible. The challenge is
to make it possible, on the one hand, to develop a truly effective anti-smoking legislative and
fiscal framework, and on the other hand to build a tight wall between tobacco manufacturers
and the European institutions. The tobacco industry, because it markets products that are
particularly harmful to health and the environment and for its direct impact on the lives of
millions of people, is not an industry like any other.
With this White Paper, we hope to shed light on the areas of shadow that persist on this
subject.
We will continue to work towards this goal with public health, consumer and environmental
protection associations, as well as with independent researchers and experts wishing to
participate in this public debate, thus helping to restore citizens’ confidence in their European
institutions.

38
 The proposals of the European Parliament’s Working Group on Tobacco

Revision of the TTD and TPD Directives in summer 2024

 Revisions to these two directives must be launched and conducted together, as they are
intrinsically linked: the tax rates of the TTD are related to parallel trade, which is dealt with
in the TPD.

 The revision of the TTD Directive will have to be reflected in:

● by a sharp increase in the minimum tax rate for tobacco products in the Union,
● by creating harmonised taxation of new tobacco products (heated tobacco, e-
cigarettes, snus, etc.) by implementing the Protocol to Eliminate Illicit Tobacco Trade,
ratified by the EU in June 2016.By introducing a tax on the turnover of tobacco
manufacturers to finance the social and environmental costs of tobacco, and to
compensate for the shortfall associated with the tax optimisation of tobacco
manufacturers

 For its part, the DPT Directive will need to be reflected, inter alia, in the introduction of new
strict rules governing the lobbying activities of tobacco manufacturers and their affiliates (see
below), and the implementation of the Protocol to Eliminate Illicit Trade in Tobacco Products
in place of Articles 15 and 16 of the current Directive.
 Opening discussions to move towards a tobacco-free generation, building on the legislation
passed in New Zealand in 2022 that include a ban on the sale of tobacco to people born after
2008.

Tobacco industry lobbying and transparency

 Creation of an independent ethics committee to put an end to suspicions of conflicts of

interest and corruption. In particular, this Ethics Committee will be responsible for
supervising the revolving doors, monitoring asset declarations, defining the activities carried
out in parallel with the elective mandate – This Ethics Committee will also be responsible for
compliance by the members of the Commission with the rules of transparency and ethics,
which are required by the Treaties that the European Union has ratified, in particular in the
WHO Framework Convention on Tobacco Control (WHO FCTC).

 Strict application of Article 5.3 of the WHO FCTC, both by the European Commission, the
European Parliament and the Member States, both with representatives of tobacco
manufacturers and with associations, entities and companies associated with them.

39
  Systematic publication of meetings, names of participants, and reports of exchanges between
representatives of the tobacco industry and those of the European institutions.

 Mandatory registration in the Transparency Register of all tobacco manufacturers and related
entities (Dentsu Tracking, external lobbying firms, law firms, ad hoc associations, etc.).

 Raise awareness of the untruths contained in reports sponsored and funded by the tobacco
industry, and denounce the methodological shortcomings of these reports when they are
updated.

 Prohibition within the European Union of any funding of political parties and electoral
campaigns by tobacco manufacturers, directly or indirectly.

 Prohibition within the European Union of any sponsorship or funding of sports, cultural,
social and health activitiesby tobacco manufacturers, directly or indirectly.

 Prohibits tobacco manufacturers and related entities to fund surveys, quantitative or

qualitative opinion studies without such funding being clearly established and disclaimed
when such surveys and studies are published and reported.

● Opening an investigation into the conflict of interest Dentsu/Jan Hoffmann as soon as

possible, either by the European Ombudsman or by the EPPO.

Combating parallel trade

● Request for recognition by the Commission of the involvement of tobacco manufacturers in

the organisation and feeding of parallel tobacco trade.

● Implementation of delivery quotas for tobacco products and “new tobacco products” and
independent traceability of these products, as required and defined by the Protocol to
Eliminate Illicit in Tobacco Products, to end the organisation and feeding of parallel networks
by tobacco manufacturers. Make the implementation of the Protocol to Eliminate Illicit Trade
in Tobacco Products (quotas and independent traceability) the corollary of any debate on
tobacco taxes.

● Denunciation of the contract awarded to Dentsu Tracking for the establishment of the
European traceability system in view of its non-compliance with the WHO Protocol “to
eliminate illicit tobacco trade”, the conflict of interest that hinders it. Since the last
“cooperation agreements” signed between the EU and tobacco manufacturers, the European
Parliament opposed the Commission’s opinion in March 2016 to the renewal of the
agreement signed with Philip Morris International.

40
Protecting our planet from smoking, new tobacco products, and tobaccomanufacturers

● Ban on conventional cigarette filters and rolling filters, in the name of the disastrous health
and environmental consequences of its use and degradation. Interim measure prior to this
prohibition of filters: introduction of a significant environmental contribution on butts to be
paid by tobacco manufacturers, the amount of which could be established at least 20 % of the
selling price of a pack of 20 cigarettes.

● Creation of an “ecological malus on new tobacco and nicotine products” of at least 20 % of

the public sale price. The benefits of such taxation would also be devoted to environmental
protection measures.

● Prohibition for the industry to describe any of its activities as “environmentally responsible”

● Requirement of prior marketing authorisation for any new product presented by tobacco and
nicotine product manufacturers.

● Revision of Article 24 of the DPT to facilitate the possibility for a Member State to prohibit
certain tobacco and nicotine products. This revision must be part of the necessary
preservation of public health by the Member States.

● Prohibition of granting any delegation to tobacco and nicotine manufacturers and their allies
regarding the management and awareness of waste tobacco products.

● Ban, at European level, on the marketing of certain new tobacco and nicotine products posing
particularly significant risks to consumers and the environment (puffs, snus...).

Prevention and support:

● Obligation to reduce the level of nicotine in tobacco and nicotine products.

● Introduction of a system of prevention of tobacco and nicotine products consumption for

young people in all the Member States of the Union.

● Provision of support services for people who wish to stop smoking, drawing on existing
research...

41
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