BRUSSELS — The EU has delayed a key vote to hike tobacco and nicotine taxes until November to allow extra time for Sweden to form a new government after its national election on Sunday. Stockholm has emerged as the main holdout against the Commission's proposal to raise levies on cigarettes, vapes and other nicotine products. The tax hikes are designed to wean smokers off cancer-causing tobacco while also preventing younger people from taking up addictive nicotine products, which affect brain development in teens and increase cardiovascular risks.
The European Commission proposed increasing levies on cigarettes and setting minimum rates on newer products like vapes, heat-not-burn tobacco and nicotine pouches in July last year. The plan has become a flashpoint for Sweden, which has a long tradition of using snus — a pouch of tobacco that sits between the gums. As such, Stockholm has strongly opposed raising taxes on similar nicotine pouches.
Delaying the vote gives extra time for Sweden to appoint a new finance minister and for the capitals to negotiate a way out of the current stalemate. The Irish presidency of the Council of the EU, which is steering the talks, confirmed the vote has been pushed from October to November's ministerial meeting. Four diplomats granted anonymity to speak candidly about the sensitive negotiations said the postponement is meant to give Sweden's next government extra time to change its mind.
A spokesperson for the Irish presidency said they will "continue[s] to engage bilaterally with the aim of securing unanimous political agreement at the November ECOFIN" meeting of finance ministers. The original plan was to vote on the latest text on Oct. 9 — just over one week after the new Swedish parliament is convened. But negotiations to form a new government in Sweden took one month after the last election in 2022.
Given the precedent, the diplomats said there's little chance Sweden will change its mind before Oct. 9, as the outgoing minister has no mandate to make commitments on behalf of the government. "If Sweden's minister says that it doesn't have a mandate to approve the legislation [in October], then it's over," said a senior EU government official. As with all tax files, the so-called Tobacco Taxation Directive requires unanimity.
While other countries besides Sweden oppose the legislation for different reasons, Stockholm's resistance is seen as the most serious stumbling block, said two of the EU diplomats with knowledge of the discussions. With elections looming, Swedish politicians across the political spectrum have campaigned against the EU's plan to hike taxes on nicotine pouches. The topic is particularly sensitive in Sweden, where nicotine pouches are firmly embedded in the national culture.
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