French tobacco retailers are sounding the alarm on cross-border smuggling, citing a price gap so wide it's turned neighboring countries into discount warehouses.

A pack of cigarettes that costs nearly €13 in France can be purchased for about €5.50 in Italy and between €5 to €6.25 in Spain, according to French retailers. That's more than a 50% discount for anyone willing to drive across the border or pay someone else to do it.

Why the gap exists

France has some of the highest tobacco taxes in Europe, a deliberate public health policy meant to discourage smoking. Spain and Italy tax tobacco far less aggressively, creating a pricing canyon that retailers say is now a smuggling superhighway.

The same dynamic applies to nicotine pouches, which are taxed as tobacco products in France but face lower or no excise duties in Spain and Italy depending on classification. That means French consumers — or anyone reselling in France — can buy pouches abroad at a fraction of the domestic price.

What this means for pouches

Nicotine pouches are already cheaper than cigarettes in most markets, but the cross-border arbitrage is even more pronounced when a product that's €6 in France costs €3 in Spain. Retailers lose the sale. The French government loses the tax revenue. And enforcement becomes a border control problem, not a retail compliance one.

French authorities have ramped up seizures at borders and highway checkpoints in recent years, but the volume of informal cross-border trade — individuals buying for personal use or small-scale resale — is harder to track.

What's next

France shows no sign of lowering tobacco taxes. Spain and Italy show no sign of raising theirs to French levels. That leaves the price gap intact and the smuggling incentive alive.

For nicotine pouch brands, it's a reminder that tax policy doesn't just shape demand — it shapes where and how products move.

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SOURCES:
Tobacco Reporter