At the end of March, a group of 16 European NGOs raised the alarm on a key EU advisory body about the tobacco industry’s alleged influence.
The Public Health Coalition points in particular to a recent report from the European Economic and Social Committee (EESC), which addresses the industry’s discussion points in the debate on the ongoing revision of the EU Tobacco Excise Tax Directive (TED).
Significantly, the EESC warns against “excessive increases” on the grounds that they could fuel illicit trade, recycling one of the tobacco industry’s oldest false narrative arguments against stricter regulation, while ignoring the World Health Organization’s (WHO) guidance on the unprecedented effectiveness of this policy in curbing tobacco use.
With the WHO European Region leading the world in tobacco and nicotine consumption, the TED review represents a unique opportunity to strengthen tobacco control in the EU, resist industry influence and decouple the case for effective tax policy from the debate on illicit trade. In this effort, French MP Frédéric Valletoux recently laid out a strong path for France and Europe to tackle the growing parallel trade enabled by big tobacco companies that keeps smoking rates high while depriving tax revenue that could be reinvested in national health systems.
Valletoux’s parallel tobacco trade warning
Of the European countries most exposed to illicit tobacco flows, France is arguably best placed to call Big Tobacco’s bluff. In a letter addressed to French Prime Minister Sébastien Lecornu in February and published by La Tribune Dimanche, Frédéric Valletoux, chairman of the National Assembly’s Social Affairs Committee, points to the role of cigarette manufacturers in boosting parallel trade through the “organized oversupply” of countries bordering France.
With this letter, Deputy Valletoux has rightly identified parallel tobacco resulting from industry-fueled oversupply as the main driver of the broader illegal market in the EU, with the flooding of neighboring markets with lower taxes by large tobacco companies an effective way to mitigate the impact of France’s high excise duties. Valletoux points in particular to the damning example of Luxembourg, which, despite a domestic consumption of only 600 million, receives around 5 billion cigarettes per year and this eightfold surplus supplies the parallel markets in France, Belgium and Germany. Meanwhile, France is only supplied with 25.5 billion cigarettes, while the market should normally receive around 41.5 billion, while the remaining 16 billion are purchased abroad.
This is not a minor market distortion. A joint report published in October 2025 by French Customs and the Interministerial Mission to Combat Drugs and Addictive Behavior (MILDECA) found that the parallel tobacco trade costs the French state €4.3 billion in tax revenue every year, while destabilizing the tobacco dealer network and weakening anti-smoking efforts. As Valletoux notes, this plague of cheap tobacco traps smokers in addiction, attracts younger consumers through lower prices and in turn increases the annual social cost of tobacco, estimated at €156 billion in France alone.
Clarification of counterfeit myths
Crucially, the Customs-MILDECA findings also debunk one of the tobacco industry’s most useful myths to obscure its facilitation of parallel trade. As Valletoux points out in his letter, this report shows that 80% of France’s parallel tobacco market comes from purchases in neighboring countries, while counterfeit cigarettes and informal street resale account for only a marginal share. The only other official quantitative study conducted in the EU, in Ireland, came to the same conclusion.
When two official studies from two EU member states point in the same direction, the credibility of the annual KPMG report on illicit tobacco consumption inevitably comes into question. In fact, the industry has spent years overstating the role of counterfeiting while diverting attention from cross-border oversupply by securing lobbying from KPMG, which reportedly provides €11 million in funding each year, according to CNCT.
This practice is not unique to France. In early March, the Global Center for Good Governance in Tobacco Control (GGTC) released a report that concluded that the tobacco industry in many countries routinely uses illegal trade as a weapon against tax increases and anti-smoking measures. Interestingly, the report also highlights the repeated criticism of the KPMG studies, focusing on their methodological weakness and conspicuous lack of transparency.
As the GGCT report authors also note, contraband products largely originate from manufacturers’ own supply chains. An independent review of Philip Morris International’s methodology found that up to two-thirds of illicit cigarettes worldwide are manufactured by major tobacco companies themselves before entering informal markets through oversupply and deliberate transfer.
Given the damning findings of both the GGTC and Customs-MILDECA reports, KPMG’s next report, due out in June 2026, will show whether the tobacco industry’s narrative can still be credibly maintained. If the figures again prove distorted or misleading, serious questions must be asked as to whether a report that is systematically used as a lobbying tool in the tobacco industry violates the lobbying rules set out in Article 5.3 of the WHO Framework Convention on Tobacco Control (WHO FCTC).
Europe’s only way forward
By countering this manipulation by the tobacco industry, France has already taken an important first step. With the support of the French government, on November 26, 2025, the National Assembly unanimously adopted a European resolution introduced by Frédéric Valletoux calling for the implementation of the WHO Protocol to eliminate illicit trade in tobacco products. As non-binding as such resolutions may be, this one sends a clear political signal and positions France at the forefront of European anti-tobacco efforts.
The urgency can hardly be overstated. As MP Valletoux argued, the protocol should have been implemented by the EU and its member states from September 25, 2018. Instead, under pressure from the tobacco lobby, the Commission failed to take the necessary enforcement steps, resulting in a gridlock that allowed parallel trade to flourish, particularly in countries with stricter tobacco control regulations. But contrary to Big Tobacco’s claims, the policy solution is encouragingly simple.
As Valletoux argues, the only viable starting point is consistent enforcement of the WHO protocol to ensure true independence from industry and effective safeguards against its interference. In his letter to the French Prime Minister, Valletoux demands that this step must be completed by January 1, 2027, to give France enough time to set up a new cigarette traceability system that is completely independent of manufacturers, in line with Article 8 of the Protocol. Currently, tobacco companies still choose and pay the IT providers responsible for cigarette sales data in the EU, violating the WHO model that requires government control of traceability systems.
According to Valletoux, a derogation request, which is regularly used to speed up the implementation of public health measures, could lead to the WHO protocol being applied instead of Articles 15 and 16 of the EU Tobacco Products Directive (TPD). Delivery controls should also be addressed directly by issuing a decree specifying the quantities manufacturers are allowed to deliver each year. With Valletoux showing the way forward, the French government should now take this position to Brussels and work with the Commission to create a much more robust tobacco control framework based on the WHO FCTC and its protocol. Anything less would mean once again handing over public health and revenue to Big Tobacco.
