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EUROPEAN UNION
The European Union Tobacco Markets
Austerity Defined Tackling a contentious problem: the large disparity in retail cigarette pricing. By Dr. Iqbal Lambat, CEO Star Agritech Intl. he European Union (EU) was established loosely after the Second World War by the six founding members—Belgium, France, Germany, Italy, Luxembourg and the Netherlands. That number was complemented in 1973 with the addition of Denmark, Ireland and the United Kingdom. Greece became the 10th member of the EU in 1981, with Spain and Portugal following five years later thereby creating the 12 Member European Union. This treaty provided the basis for a vast six-year program aimed at sorting out the problems with the free flow of trade across EU borders, thus creating
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the “Single Market.” In 1993 the Single Market was completed with the “Four Freedoms” of movement of Goods, Services, People and Money freely across EU member borders. In 1995 the EU added three more new members, Austria, Finland and Sweden. A small village in Luxembourg gives its name to the ‘Schengen’ Agreements that gradually allowed people to travel without having their passports checked at the borders. The political divisions between East and West Europe were finally declared healed when no fewer than 10 new countries—Czech Republic, Cyprus, Estonia, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia—
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joined the EU in 2004, followed by two more—Bulgaria and Romania—in 2007. Over the last 12 years since then, the EU has undergone tumultuous times: the bankruptcy of Cyprus, the economic meltdown of Greece, the rise of populism in countries such as Holland, Hungary and Poland. And, at the time of writing this article, UK Prime Minister Boris Johnson is threatening to leave the EU with or without an agreement with the EU under what has become referenced broadly as BREXIT. What is transpiring in the European Union Cigarette and Tobacco markets and what does the future hold? The Continued Decline of EU Cigarette Markets Back in 2007, one would broadly refer to the EU bloc as a combined market of circa 725 Bn cigarettes of consumption. The five big +100 Bn stick markets of Germany, Spain, France, Italy and the UK accounted for slightly over 500 Bn
