According to estimates from the Dutch Statistics Office, the smoking rate among adults in the Netherlands is projected to be 18% by 2024. To combat this, the Dutch government has implemented a series of excise tax increases on tobacco products aimed at reducing consumption. However, the anticipated impact of these tax hikes has not materialized as intended; instead, it has altered the behavior of many smokers. A significant number are now crossing borders into neighboring countries such as Belgium, Germany, and Luxembourg in search of more affordable tobacco products.
A recent study by the Dutch Institute for Health and the Environment (RIVM) highlights that a staggering 60% of the tobacco products consumed in the Netherlands come from abroad. The financial implications of this trend are substantial. According to a report commissioned by the Association of Cigarette and Cut Tobacco Manufacturers (VSK), the Dutch Treasury is estimated to incur an annual loss of approximately €2.6 billion (around $3.05 billion) due to smokers seeking cheaper alternatives overseas and engaging in illegal tobacco trade. Data from market research firms WSPM and Kantar suggests that as much as 40% of all cigarettes consumed in the Netherlands are purchased either abroad or through illicit channels, with the figure for rolling tobacco soaring to about 50%.
Jan Hein Sträter, the VSK director, has voiced strong concerns about the changing landscape of tobacco consumption. He attributes the current situation to an ongoing trend of rising taxes in the Netherlands, asserting, “People were used to fixed prices, and now the norm is to opt for cheaper alternatives, whether foreign or on the black market.” Sträter argues that the tax increases have not significantly reduced the number of smokers—in fact, the percentage of smokers has only decreased from 20% in 2020 to 18% in 2024. He advocates for the harmonization of tobacco tax rates with those in neighboring countries, tightening controls on illegal markets, and enforcing regulations on digital sales channels.
Is the price difference truly that significant? Yes, it is striking. The tax hikes in 2024 saw cigarette prices in the Netherlands rise by 24%, and rolling tobacco jumped by 45%. Consequently, a pack of cigarettes now costs more than €11 ($12.90), while a carton is priced at around €130 ($152). In contrast, the same items can be purchased for approximately €6 ($7) and €70 ($82) respectively in Luxembourg. The disparity in prices for rolling tobacco is even more pronounced, with the cost soaring to twice or thrice that of its German counterparts.
The dramatic price gap has spurred criminal activity, as organized crime attempts to cash in on the lucrative tobacco trade. In the previous year alone, authorities seized approximately 15 million cigarettes at the port of Rotterdam. Even more alarming, 2.6 million cigarettes were confiscated in Limburg in April 2025, along with over 20 million cigarettes and 3,700 kilograms of rolling tobacco found in Brabant during the same month.
Looking ahead, the RIVM warns that potential future tax increases could yield diminishing returns. Despite a moderate tax increase in 2023—11% for cigarettes and 28% for rolling tobacco—the RIVM predicts that fewer individuals will attempt to quit smoking while tobacco prices remain comparatively low across the borders. The institute suggests that the government should take two main actions. First, it advocates for bolstering measures to counteract cross-border purchases, given the current allowance for individuals to bring in up to four cartons of cigarettes, one kilogram of rolling tobacco, 200 cigars, and 400 cigarillos. Second, the RIVM recommends imposing special taxes on e-cigarettes, especially since young people often begin their smoking journey with them before transitioning to traditional cigarettes.
The foundations of Dutch tobacco policy can be traced back to the National Prevention Agreement established in 2018. This policy is based on two key principles: increasing prices and reducing the number of outlets selling tobacco. While there has been a slight downward trend in smoking rates, the investigative journalism website TabakNee argues that VSK’s analysis overlooks a fundamental truth: the primary goal of increasing taxes is to deter smoking among young people. The site further contends that the real economic losses are largely attributable to revenue lost from the illegal tobacco trade, rather than just cross-border purchases.
This ongoing issue underscores the complexities surrounding tobacco policy in the Netherlands. High taxation is intended to dissuade consumption, but the unintended consequence has been the growth of a shadow market and cross-border purchases. As determined as policymakers are to reduce smoking rates, they may need to reevaluate their strategies in light of changing consumer behavior.
Addressing these challenges will necessitate a multifaceted approach. Perhaps solutions should encompass international cooperation to align tax rates across borders or further investment in public health campaigns aimed at discouraging smoking among young people. Additionally, stricter enforcement against smuggling operations will be critical in mitigating the financial losses stemming from illicit trade.
In conclusion, Dutch smokers crossing borders in search of more affordable tobacco products signify a complex interaction between tax policy, consumer behavior, and market dynamics. As government officials grapple with an insatiable illegal market and diminishing returns on taxation, innovative strategies built on evidence and international collaboration may prove vital in achieving long-term health objectives for the Dutch population.
Source link
