Amid an ongoing European consultation on taxation policies, the Association of Convenience Stores (SYKADE), a member of the Cyprus Chamber of Commerce and Industry, held a high-level meeting with the Director of the Customs Department to assess the potential consequences of proposed EU tax revisions on tobacco and nicotine products. The dialogue focused on how pricing shifts could affect both legal retailers and overall market equilibrium.
Price Projections And Consumer Impact
Industry representatives warned that if higher minimum excise duties are introduced, the average retail price of a cigarette pack could rise from approximately €4.50–€5.00 to €7.00–€7.50. Such an increase, they argue, would not only reduce affordability but could also redirect a portion of demand away from regulated sales channels, reshaping purchasing behaviour across the legal tobacco market.
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Smuggling And Revenue Losses
A central concern in the discussion was the persistent issue of illicit trade. SYKADE emphasized the importance of strengthening border inspections and upgrading customs monitoring systems, alongside introducing stricter penalties for trafficking offenses. According to industry estimates, illegal cigarettes account for roughly 13% of total consumption, while hand-rolled tobacco products may reach levels of up to 53%. These parallel markets are believed to deprive public finances of more than €50 million annually in lost tax revenue.
Balanced Taxation And Policy Outlook
While expressing support for public-health initiatives aimed at reducing smoking rates, the association urged policymakers to adopt a data-driven and proportionate fiscal strategy. SYKADE cautioned that excessively sharp tax increases risk expanding the shadow market and undermining legitimate businesses without delivering the intended health outcomes. The organization confirmed that further consultations with the Ministry of Finance are planned, with the goal of aligning revenue protection, consumer regulation, and public-health priorities within a stable and predictable policy framework.
