Products do not be in vacuum. The UD213 project, which aims to ban selected nicotine products and reduce the rest, has wider consequences. Tobacco growers, already in difficulty, can find themselves in a tragic position through the Tobacco Directive.
UD213 and Farmers
On Thursday, the draft UD213 returns to the Standing Committee of the Council of Ministers – this is simply a crucial minute of the legislative process. The current law eliminates nicotine sachets and nicotine products without tobacco, alternatively of regulating them fiscally and qualitatively. The direction of the European Commission's Tobacco Directive seems clear: to reduce the production and smoking of conventional cigarettes throughout the Community. The Polish implementation of UD213 is an utmost form that eliminates the full section of the market: at advanced prices and bans certain product categories, there is simply a real fear that customers will quit limited products. And that means hitting the full marketplace and the supply chain.
In the case of tobacco, this means a shrinking request for natural material from which thousands of Polish families live today. And they're not the only black clouds above the growers. In the background, the final phase of the trade agreement with South American countries, i.e. EU and Mercosur, is underway. The agreement will open the EU marketplace to cheaper agricultural products. This besides applies to tobacco.
Difficult situation for tobacco growers
For Polish growers, it means the same as for another farmers: competitive force and a decrease in product profitability. Against the Mercosur agreement of the West Pomeranian province, farmers protested on 5 December. On Monday 8 December, on the website of the Ministry of Agriculture, we could read the message that "the conflict won!" – the amendments passed, guaranteeing protection against the effects of excessive imports of goods from Mercosur countries.
Is it possible to consider whether the Ministry of Agriculture will besides be behind them in the case of UD213? The Thursday legislative process may turn out to be, be or not for many families surviving from tobacco crops. The legislative process of changes to the Tobacco Directive is progressing very quickly, without looking for alternatives or cover mechanisms. However, manufacturers of products specified as nicotine sachets themselves sought to regulate their goods in order to increase consumer safety.
The Lost Billions
The current form of UD213 does not give nicotine producers or farmers any adjustment path. The manufacture recalls that it is an exceptionally profitable market, giving a origin of unchangeable revenues for the state – as much as PLN 8 billion of revenues from excise duties are forecast in the next 5 years. Assuming that a legitimate, orderly nicotine marketplace and tobacco-free products will remain, it will not overregulation.
8 billion zlotys is simply a immense sum. It can be filled with more than 1 missing budget hole, as in the NFZ, which was mentioned in Brussels by Finance Minister Andrzej Domanski. If the money from this marketplace is not to fall apart (for example, the grey area that will grow after excessive regulation), close monitoring is needed.
The Thursday meetings of the Standing Council of Ministers will show whether the government looks at UD213 as part of a long-term economical and agricultural strategy, or simply as an ad hoc regulatory solution – with no consequences for farmers, the budget and the stableness of the full sector.
