Reform of tobacco product taxation in the EU: what (really) changes for businesses and the market If adopted, the new excise directive will start to apply from 2028, raising EU minimum rates and also including the “new” nicotine products. Here is a practical guide – designed for manufacturers, importers, distributors and retailers – to understand the Commission’s proposal (July 2025) and prepare in advance. Historical background On 9 December 2024, 16 Member States called for the modernisation of the TTD to include new products. In May 2025, a subsequent letter signed by 15 countries urged the Commission to present the review proposal without further delay. On 16 July 2025, the European Commission therefore presented the proposal for a recast of the Tobacco Taxation Directive (TTD). The proposal expands the scope of the directive to also include electronic cigarettes and nicotine pouches, introducing minimum excise rates for these products. Concerns nevertheless remain among some Member States and across the various supply chains regarding the possible impact on local industries, inflation and illicit trade. Directive 2011/64/EU (TTD) harmonised the structure and minimum excise levels on cigarettes and smoking tobacco, but does not adequately cover e-cigarettes, heated tobacco and nicotine pouches. In line with the EU Beating Cancer Plan, the Commission proposed in 2025 a far-reaching revision, with entry into application envisaged from 2028. Why a revision is needed Divergences between Member States: wide tax gaps fuel cross-border shopping and market distortions. New products without a common framework: misaligned tax treatment for e-liquids, heated tobacco and pouches. Public health objective: higher prices are expected to lead to lower consumption, especially among young people. The pillars [...]