On World No Tobacco Day, the European Parliament published a graphic showing European smoking rates by country. “EU tobacco rules are helping to reduce smoking and prevent deaths,” the post boasted. It also noted, in much smaller text, that Sweden has become the first EU country to achieve the ‘smoke-free’ target of getting smoking rates below 5% of the population.
There’s just one problem. While Brussels claims credit for Sweden’s success, behind the scenes, it is fighting tooth and nail against the Swedish approach to tobacco policy.
For decades, Sweden has taken a lenient approach to many nicotine products, like the traditional snus and its more recent iteration, nicotine pouches, in the hope that their availability will keep people off cigarettes. The results speak for themselves. The country’s distinctive strategy for reducing smoking by allowing access to less harmful alternative products has proved effective. Sweden is the only EU country where snus is legal and nicotine pouches circulate freely. It chooses permissiveness instead of punitive taxes or outright bans.
The results have been excellent: 41% fewer cancer cases and 44% lower tobacco-related mortality than the European average. Yet Brussels’ tolerance for Sweden’s model is narrower than it looks. Snus, the older tobacco-based product, still enjoys the exemption Sweden negotiated on joining the EU in 1995. Nicotine pouches, the tobacco-free product behind much of Sweden’s recent progress, enjoy no such protection. A pending revision to the EU’s Tobacco Taxation Directive would impose a harmonised excise duty on pouches across the bloc, while the incoming TPD3 overhaul is expected to cap nicotine content and restrict the flavours that have made pouches an appealing substitute for smokers.
Rather than learning from Sweden’s success, Brussels continues to push for more restrictions. The EU looks set to press ahead with revisions to the Tobacco Products Directive (TPD), which could make it much harder to access those less harmful products which have been Sweden’s smoke-free saviours. The European Commission launched a call for evidence on product standards and advertising rules, while a separate revision to the Tobacco Excise Directive, proposed in July 2025, would bring harmonised taxes on nicotine pouches across the bloc for the first time.
Europe’s restrictive approach is backfiring spectacularly. The market for illegal tobacco is booming. In 2025, according to new research from KPMG, illicit cigarette consumption in the European Union exceeded 10% of total consumption for the first time in more than a decade: 41.8 billion units. Counterfeiting exploded by more than 20% in a single year and now accounts for 44% of the entire illicit market. Beyond the health risks of black-market products, EU member states lost 16.7 billion euros in tax revenue.
The countries with the highest illicit shares are precisely those which imposed the strictest restrictions, including outright bans on nicotine pouches. France leads, with 41.4% illicit (20.5 billion cigarettes). The Netherlands sits at 22.1% and Belgium at around 25%.
The European Union’s favoured restrictions are to blame for this problem. There has been a major structural shift: illicit trade relies no longer mainly on contraband coming from Eastern Europe but on counterfeiting concentrated in the major Western European markets, with supply chains that are faster, more fragmented, and harder to trace.
These results should not be surprising. When the state prohibits a product, it does not vanish into thin air. It moves onto the black market, where it becomes more valuable. Organised crime adapts and creeps closer to the consumer. Criminal gangs enjoy a new revenue stream.
This pattern repeats itself throughout the history of substance control policies. In New Zealand, similar policies have already been hurriedly reversed. The country passed a pioneering generational tobacco ban in 2022 and revoked it in 2024 precisely because of fears of an explosion in the black market and organised crime, as well as the need for tax revenue from legal sales.
Europe needs a balanced and moderate approach to reducing smoking, not knee-jerk restrictions. The KPMG report identifies countries that have achieved sustained reductions in illicit trade through a balanced policy. The common denominator is an approach closer to the Swedish model than to the one the European Union intends to pursue.
Brussels must reverse its attempts at fiscal harmonisation of nicotine products and its increasing prohibitions and restrictions on lower-risk alternatives, allowing markets to function and countries to correctly apply the principle of subsidiarity. A more liberal market that treats adults as capable of making their own choices and that prioritises lower-risk alternative products over prohibitions would reduce both cigarette consumption and associated crime, more than any number of snowballing product regulations in Brussels.
