Sweden's Proposal to Raise Snus Tax Hurts the Public Health
If the Swedish Parliament moves forward in raising the excise tax on snus at a significantly higher percentage than on cigarettes, a danger to the Swedish public health will be the result.
For 2015, Sweden is proposing to raise the tax on snus 12%.
Sweden tried raising the snus tax to the point where the retail price was close to that of cigarettes in the past. The result was an increase in cigarette consumption by Swedish consumers. Changes were later implemented to widen the spread between snus and cigarettes which reversed that trend.
Why would Sweden risk the health of its people and potentially increase the cost of government-funded healthcare? The answer is pathetic and helps explain why Sweden has done little to overturn the targeted trade discrimination of the EU Snus Ban.
When Sweden significantly increases the excise tax on cigarettes, there is a large uptick in black market sales of cigarettes. This reduces the amount of tax revenue the Swedish government collects.
Since snus is overwhelmingly manufactured in Sweden, there is no black market potential within Sweden since the snus is taxed at point of manufacture. As yet another government which practices zero-sum economics, they operate from the naive assumption that the number of snus users will remain growing at current trends and they will reap more revenue with little risk.
Instead of raising the tax on cigarettes at a higher rate than snus to discourage cigarette use while aggressively increasing the prosecution of black market cigarette importers and sellers, Sweden chooses the course of least effort.
Between 2005 and 2014, Sweden has raised the excise tax on snus 250% as compared to only 50% on cigarettes!
Snus users and cigarette smokers in Sweden are the losers as are those snus users around the world who have chosen Swedish snus as a much safer alternative to highly carcinogenic cigarettes to satisfy their nicotine addiction.
Currently, the proposed tax increases are scheduled to go into effect 1 January 2015.
Swedish Match will raise snus prices if the excise tax passes
Swedish Match is announcing today that they have already created an action plan if the Swedish Parliament goes through with this large increase in snus taxes.
The price increase will reflect the amount of tax increase and will go into effect simultaneously with the new Swedish cigarette and snus tax increases. The other Swedish snus manufacturers are expected to follow the lead of Swedish Match and proportionally increase their snus prices as well.
A sad day for Sweden and Snus
It is ironic that Sweden, home to the first and most widely used form of reduced harm tobacco, is now tacitly promoting cigarettes through a smaller tax increase than the one on snus in order to enrich the government coffers.
Are black market cigarettes a problem? Of course they are. Just last week, the Wall Street Journal reported that the UK had fined BAT for overselling cigarettes in the low-tax Belgium market which were consequently smuggled into the UK black market.
Worse are the black market cigarettes made in small factories in Russia and and other countries where there is no effort at quality control or cleanliness. As dangerous as Big Tobacco cigarettes are, these knock-off brands are even more deadly.
Either way, cigarettes will kill you which only adds to the outrage at Sweden's upcoming tax actions.
Sweden has demonstrated the lowest level of cigarette-related illness of all EU countries for decades. Will that continue? Does the Swedish Parliament even care so long as they get their 30 pieces of silver?
How many of the 150MM cigarette smokers in the EU will sicken and die unnecessarily because Sweden tolerates the blatant trade discrimination and insult which is the EU ban on Swedish snus?
Apparently, no one really cares so long as the money keeps flowing in. I just wish governments would drop this hypocritical championing of the public health and saving "the children".
Money is all that matters at every level of government and nicotine addiction provides it. It is no surprise that among all the potential sources nicotine addicts can turn to, cigarettes remain the most effective nicotine delivery system ever devised in human history.
Swedish Snus Ambassador to the United States
Reporting From Sweden and the USA for SnusCENTRAL.org