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The New Tobacco Products Directive – Potential Economic Impact


In late December 2012, the European Commission adopted its proposal for a new Tobacco Products Directive (TPD) – a proposal that has the potential to significantly impact the tobacco sector and the EU economy.

Roland Berger Strategy Consultants has been commissioned by Philip Morris International (PMI) to assess the potential economic impact of the new TPD. In our study, we analyze the impact of the new TPD on the entire tobacco sector and EU Member States' economies in terms of two key parameters: Employment and tax revenue

In doing so, we focus on the impact of the new packaging and labeling requirements leading to high levels of standardization, the ban on slim cigarettes, and the ban on menthol cigarettes resulting from restrictions on additives. We view these three measures as likely to have the most significant, quantifiable impact. There are potential additional effects on employment and tax revenue which have not been quantified as part of this study.

Our study attempts to be consistent with standard practice in economic modeling. We adopt a comprehensive, quantitative economic model that allows us to simulate future developments in the tobacco sector.

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