How buying cigarettes abroad affects French tobacconists

The price of a packet of cigarettes has risen sharply in recent years, and the trend is not about to stop. A further increase is planned for 2023, adding to the concern of tobacconists, who are watching their turnover fall.

Tobacco subject to a double increase

The gradual rise in the price of tobacco in France was introduced as a deterrent to smokers. Some packets now cost more than 10 euros. Élisabeth Borne has announced that cigarette prices will follow inflation. After going up by 50 centimes in 2022, a packet of cigarettes will rise by a further 35 centimes in 2023.

Tobacconists had been expecting a new increase for several months. Inflation caused the value of the tobacco market to fall by 8 % last year, which in turn squeezed trade margins and pushed share prices down. That is why tobacconists argue for small, regular increases rather than a single sharp rise that might turn smokers away for good. Where the increase comes from excise duties, tobacconists gain nothing from the higher prices.

Buying tobacco abroad: an increasingly common practice, though unlawful

Higher packet prices, however, also mean workarounds. Smokers, already affected by inflation, look for other ways of obtaining their cigarettes. The black market and cross-border purchases are the two main routes. The French state puts the tax revenue lost to these practices at 5 billion euros.

Spain, Andorra, Switzerland and Belgium appear to be the favoured destinations for smokers looking for cheaper packets, all the more so as stocks there remain plentiful: these countries take delivery of far more cigarettes than their own consumption requires.

The black market worries the state and tobacconists alike, since it accounts for an estimated 400 million euros of lost turnover every year. Only 1.9 % of black-market cigarettes are counterfeit; the remaining 98.1 % therefore come straight out of the manufacturers’ own factories.