Afew years ago, Adinkerke was a forgotten, dilapidated village of red-brick houses, just inside the Belgian border with France. In the past four years, however, it has been transformed into a glittering mini-Las Vegas: a village full of garish signs reading “Smokey River”, “Eurobaccy”, “Tobacco Alley”, “Smugglers’ Corner”, and “Coronation Street Tobacco Shop”.
The village stands less than a mile from the long ribbon of dunes and beaches, stretching north of Dunkirk, from which the British Army was evacuated 69 years ago. The opening this month of yet another tobacco shop in the village – a garish cigarette supermarket called Real Tobacco XL – has ignited a new Battle of Dunkirk: a potentially noxious legal row between France and Belgium over the rights of EU citizens to dodge national anti-smoking policies by crossing European borders to buy cheap fags.
The owners of Real Tobacco XL, and four other emporiums along the Franco-Belgian border, flooded northern France earlier this month with advertising flyers for their new shop. They sent a loudspeaker car, towing an advertising trailer, through the streets of Dunkirk promoting the fact that cigarettes were at least €1 a packet cheaper 10 miles away in Adinkerke. The French tobacconists’ association pounced. They had been able to do nothing, under EU law, about the cheap cigarette shops in Belgium. But they could bring a legal action against the Belgian firm for breaking an 18-year-old law which bans all forms of tobacco advertising in France.
“For three or four years, we have had to watch them [the Belgians] opening more shops selling cheap cigarettes, and we could do nothing,” said Patrick Falewee, president of the Dunkirk area tobacco trade association. “Over there they have no system of tobacco licensing, anyone can start a tobacco shop. You just buy an abandoned house in a border village and you start selling cigarettes. Now, at last, we can fight back. They have broken the French law against advertising tobacco and we are going to make sure that they are punished for it. We are going to pursue this case to the end.”
This is much more than a local quarrel. At one time, France took a relaxed view of smoking, partly because tobacco was a lucrative state monopoly. In the past decade, however, successive French governments have adopted a more health-conscious approach and have imposed a series of steep tax increases on tobacco. The 6 per cent tax increase earlier this month has increased the price of a packet of 20 Marlboros – the most popular brand in France – to €5.60 (£5.10). This is about £1 a packet cheaper than in Britain. It is about €1 (90p) a packet more than in Belgium and at least €2 a packet more than in other EU nations, such as Spain, Italy and Luxembourg.
Earlier this year, the British American Tobacco company estimated that more than one in five of all cigarettes smoked in France was bought abroad. Much the same problem exists in Germany, which has very cheap tobacco neighbours in Poland and the Czech Republic. There is a growing trade in smuggled cigarettes in Europe and an equally illegal growth of sales over the internet. But many French and German smokers have discovered the pleasures of perfectly legal, or almost legal, cigarette tourism.
“They come to the shops in Belgium, not just from Dunkirk and Lille but from as far south as Paris and Rouen,” Mr Falewee said. “Legally under EU law they are allowed only five cartons of 200 cigarettes each per car. Of course, they often buy far, far more than that. The Belgian shops do nothing to limit their purchases.”
Over the border in Adinkerke, the Real Tobacco XL supermarket is doing a brisk trade. The shop is at least 50 yards long and 25 yards wide – about quarter of the size of a football pitch – and also sells chocolate and a small selection of drinks. But cigarettes and rolling tobacco are its stock-in-trade. If you don’t mind rolling your own, you can buy a large drum of Louxor tobacco – enough to make 1,200 cigarettes – for €48.55.
Serge, the manager of the shop, declined to talk about the rights and wrongs of the legal case brought by the tobacconists’ association across the border. “The French are making a big hoo-ha about our shops here but the real price difference is not between France and Belgium but between here and Britain. Eighty per cent of our customers here are not French but British,” he said. Was he suggesting that the French were being a little hypocritical? That Calais had been making a living for years from the thirst of Britons for cheap, low-tax booze and the cross-Channel hunger for lower-tax tobacco? Yet, now that the cigarette tax pattern had started to favour Belgium, they were complaining.
Serge grinned and turned to serve another customer. “You are saying that, not me,” he said. Hélène Marcuzzo, 32, from Dunkirk, was loading up her car with cigarettes for herself and chocolate for her two children. “I can buy 200 cigarettes for €46 here, compared with nearly €60 in France,” she said. “I never buy cigarettes at home any more, except in an emergencies. I understand why the French shops are upset,” she went on, “but what about the poor French smoker? They keep putting the taxes up and up. What are we supposed to do?” Give up smoking, maybe? Ms Marcuzzo looked appalled. “Oh, no, no, no, no,” she said. “No, no, no, no.”
Mr Falewee of the Dunkirk tobacconists’ association has another solution to suggest. “It’s very simple,” he said. “We need a proper European health policy, which would harmonise all cigarette taxes in the European Union. As things stand, there is no point in trying to discourage people from killing themselves by raising taxes because they will just clear off somewhere else to buy their cigarettes.”
The European Commission has already tentatively suggested something similar. With taxes on 20 cigarettes currently ranging from the equivalent of 82p in Bulgaria to £4.62 a packet in Ireland, the EU would need a king-size harmonisation. This could be a first test for the ingenuity of the European Union’s answer to Hercule Poirot, the new Belgian President of the European Council, Herman Van Rompuy.
Contraband cigarettes EU and beyond
*The dramatic differentials in cigarette prices, not merely among EU countries but also between the EU and some countries outside it, have provided money-making opportunities to many others besides the enterprising tobacconists of Dunkirk.
*Since joining the EU in 2004, Poland has been steadily hiking tobacco duty to meet EU targets. As a result, cigarettes are frequently smuggled into Poland from bordering Ukraine, where tobacco is much cheaper.
*In the former Yugoslav republics, the yawning gap between local and EU cigarette prices has prompted the growth of a lucrative smuggling trade across the Adriatic. This, it is claimed, has hugely enriched some of the local post-Communist elites. Milo Djukanovic, the Prime Minister of Montenegro, is fighting Italian accusations that he himself is involved in the trade.
*A study earlier this year estimated that 657bn black market cigarettes are sold across the world annually, costing governments nearly £25bn in lost revenue. And the charity Cancer Research estimates that if the smuggling of cheap tobacco into the UK was eliminated, in the long term 4,000 deaths a year could be prevented.
30 November 2009, Independent