“The EU is experimenting with the regulation of electronic cigarettes. The TPD Directive (2014) set the framework, but countries implemented it in different ways: some chose a liberal approach and got a white market, others applied strict restrictions or high taxes – and the market went into the shadows. Ukraine is still choosing which way to go.”, — write: www.pravda.com.ua
Such a gap between official and real volume indicates a significant share of unregulated trade. If the policy is ill-conceived, the state risks losing tax revenues and pushing consumers to the illegal market.
European experience: what is the TPD directive In 2014, the European Union adopted Directive 2014/40/EU (TPD)which became a common basis for the regulation of e-cigarettes and liquids. The document established key requirements: nicotine concentration limits, packaging standards, mandatory warning signs, and notification – the manufacturer had to warn about the release of a new product six months in advance.
The idea was clear: to create transparent rules of the game that will reduce health risks and lead the market out of the “wild field”. But in practice, the countries followed different paths.
Great Britain made a bet on reducing the harm from smoking. There are no excise taxes on liquids, different flavors are allowed, and the state has an open information policy: electronic cigarettes were even considered as a potential means to minimize the risks of smoking.
The result speaks for itself. According to the data Office for National Statisticsthe proportion of smokers in Britain has fallen from over 20% in 2011 to 12.9% in 2022. This is one of the lowest indicators in Europe.
Germany chose a different strategy. Here, the excise tax on liquids was introduced in 2022, and already in 2025 it reaches 0.26 euros per milliliter, and in 2026 it will rise to 0.32 euros. The tax burden is significant, but it is balanced by the high incomes of the population: the average salary exceeds 4,300 euros (in Ukraine it is 550 euros at the rate of excise tax on liquids of 0.3 euros per milliliter), and a pack of cigarettes in Germany costs 9–10 euros. In such conditions, the market remains predictable and legal.
France made a bet on the maximum taxation of ordinary cigarettes. Taxes make up more than 80% of the pack price (Eurostat), while liquids are excluded and not subject to excise tax. As a result, the state encourages smoking cessation, but creates a field for the smuggling of cigarettes. The shadow share in the cigarette market is the highest in Europe (37%).
Greece became an example of chaos. Here, in 2017, an excise tax of 0.1 euros per milliliter was introduced even on nicotine-free liquids, and in 2024-2025 the government changed the policy on flavors several times: from a complete ban to a partial restoration and back again (VapingPost). Such unpredictability paralyzed the industry: 10,000 jobs were at risk, and 400,000 consumers switched to the black market.
IN Denmark the situation is different. Here, the excise duty on nicotine-containing liquids is €0.2 per milliliter for strength up to 12 mg/ml and €0.34 for over 12 mg/ml (SKAT). Non-nicotine liquids are not taxed.
But in addition to the excise tax, there is a strict notification system: for each flavor or strength, the manufacturer or importer pays a one-time fee of 4,950 euros and another 1,970 euros annually. If a company has dozens of flavors and strength variations, the costs multiply and the bills end up being measured in the hundreds of thousands of euros. This makes the market practically closed for small businesses and leaves room only for big players.
What awaits Ukraine Today, Ukraine repeats rather negative scenarios. The country has one of the highest excise taxes on liquids in Europe – 300 euros per liter, or approximately 0.3 euros per milliliter. For a country where the average salary is around 550 euros, this tax burden is disproportionate.
According to industry experts, the volume of the electronic cigarette market in Ukraine is estimated at 250 million euros, and its dominant part is in the shadows. This means that a huge part of sales takes place outside the legal field.
As a result, the state loses tens of millions of euros in taxes, and control over the quality of products is practically absent.
Three main enemies The first enemy is unpredictability. If the rules change every year, as in Greece, the business does not invest, and the consumer goes to illegals.
The second is administrative barriers. The Danish experience proved that when fees multiply by the number of tastes, small companies disappear and the market becomes monopolized.
The third enemy is prohibitions and surcharges. Ukraine is already facing this problem today: the high rate of excise duty and the prohibition of aromas do not lead to a decrease in consumption, but to the flourishing of gray trade.
How to build a balanced model Ukraine needs stable rules that will not change every season. Businesses must understand that investments in legal trade will not be devalued by another ban. Tax policy should be reasonable: rates should take into account the level of income of the population and correlate with excise taxes on other nicotine-containing products.
The registration procedure should be transparent and accessible, without excessive bureaucracy. At the same time, the state is obliged to guarantee consumer protection – from banning sales to minors to quality control and product labeling.
Ukraine cannot afford another market in the shadows. Either we create rules that work for the state and citizens, or we continue to work for smugglers. The choice is simple: strategy or chaos, budget or black market.
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