Tobacco Asia

44 tobaccoasia Issue 4, 2025 July / August By Stefanie Rossel Modern oral nicotine (MON) products are growing at a rate most industries can only dream of. According to business intelligence firm Euromonitor International, global retail sales of nicotine pouches reached 23.462 billion units in 2024—up from 15.592 billion units the year before, marking a 50.5% year-on-year increase. This growth even outpaced the previous year's 43.7% jump. Research and Mar- kets estimates the global MON market will be worth US$6.37 billion in 2025. With 13.96 billion units sold in 2024 according to Euromonitor data, the United States is the clear global leader. Europe is another key region—particularly Sweden, the other Nordic countries, the UK, Germany, and Poland—while Asia-Pacific, led by Pakistan, is forecast to be the fastest-growing region. "It is key that geographic expansion beyond countries with ex- perience with oral products such as the US or Sweden is the next step for nicotine pouches," says Erwin Henriquez, head of nicotine research at Euromonitor. "They have to go out, they have to go into more countries, and they have to convince consumers that they are a good alternative for nicotine consumption." In the EU, however, the category's trajectory may soon be thwarted by disproportionate taxation—or, in the worst case, out- right bans, which several member states have already enacted in the absence of harmonized EU-wide legislation. In February 2025, France joined the Netherlands, Latvia, Germany, and Belgium in banning nicotine pouches, citing concerns over youth appeal and similarities to snus, such as the "possibility of discreet and invisible use." The ban in France extends not only to manufacture, import, export, sale, and distribution but also to possession. Fines can reach up to €375,000 (US$433,114) or 5 years in prison. By contrast, heroin possession in France typically carries a fine of €3,200 and up to 1 year in prison. Nicotine Pouches at a Crossroads As nicotine pouches continue to grow in popularity, the European Union remains divided on how to tax and regulate them. Other countries, such as Spain, are propos- ing to limit nicotine content to less than 1 mg—a de facto ban, as 99% of current products would be eliminated. Due to slower absorption through oral mucosa compared to cigarettes, pouches re- quire higher nicotine content to provide a similar "kick." Most popular brands contain between 3 and 20 mg. Call for taxation The category faces further headwinds: in early June, 15 EU finance and economy ministers—led by France and the Netherlands—called on the European Commission to tax vapes and nico- tine pouches. The letter formed part of broader pressure for the Commission to update the long- awaited Tobacco Excise Tax Directive (TED), last revised in 2011, which still excludes novel nico- tine products. These are currently taxed differently across member states. While preparatory work is still underway, Euractiv reported on June 12 that an internal im- pact assessment suggested nicotine pouches could be taxed at €143/kg. By comparison, the docu- ment proposed raising cigarette taxes by 139% (from €90/1,000 units to €215/1,000) and rolling tobacco taxes by 258% (from €60/kg to €215/kg). Adopting the revised TED would require unanimous approval from all EU member states. However, Italy, Greece, and Romania—which have lower taxes on novel products and have made significant investments in the tobacco and nicotine sector—have urged the Commission not to lump reduced-risk products like heated tobacco together with traditional cigarettes. Member states are split. Proponents of high taxation, such as France and the Netherlands, cite unknown long-term health risks and argue that novel products offer tobacco companies a backdoor into markets under the guise of harm reduction. Oppo- nents warn that overtaxing such products could en- courage illicit trade and reduce tax revenues. Erwin Henriques, head of nicotine research, Euromonitor International. Nicotine pouch growth may soon stall amid bans, taxes, and new laws. Credit: Jakubdrastich2,CC4.0.

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