TED and TPD: What InterTabac 2026 reveals about the future of tobacco and nicotine pouches

Will raw tobacco be exempt from tax in the future? What does that have to do with a court dispute over Lithuanian tobacco? Will Nicotine Pouches disappear from the market if they are banned as they are in France? And who actually decides this — the EU or each country on its own? These and other questions were discussed at InterTabac 2026, which took place at Messe Dortmund from September 15 to 17. More specifically, in the talks “Expected Developments Regarding TED2 on Raw Tobacco” by Krzysztof Rutkowski, attorney-at-law and tax adviser as well as partner at a Warsaw law firm specializing in customs and tax law, and “TPD: What Are the Direct Consequences for Tobacco Retailers?”, a panel featuring representatives from Belgium, France, the Netherlands, and Italy. Rutkowski had originally announced his talk more broadly as “Expected Developments Regarding the Two EU Directives Currently Under Discussion: TED and TPD.” However, by the time of the trade fair, the EU Commission had not yet published an official draft for the revision of the TPD.

Before getting into the details, the two key terms, TED and TPD, should be clarified. The abbreviation TED stands for Tobacco Excise Directive and determines the minimum tobacco tax rates in the EU and how they are calculated. TPD is short for Tobacco Products Directive and sets out how tobacco products may look, be packaged, advertised, and sold. This covers warning labels, flavour bans, and sales restrictions. Both directives are currently being revised. TED2 is the planned new version of the Tobacco Excise Directive, while TPD3 is the revision of the current TPD (TPD2).

What do tobacco tax and tobacco product directives have to do with nicotine pouches that do not contain any tobacco at all? In the future, TED2 is set to introduce an EU-wide minimum tax on Nicotine Pouches for the first time; so far, there has been no common rule for this. The TPD also currently only covers tobacco products and e-cigarettes. Snus, meaning tobacco-containing Nicotine Pouches, is therefore banned across the EU, with the exception of Sweden. Tobacco-free Nicotine Pouches do not fall under the directive, and each country decides for itself whether to allow or ban them. This is exactly the gap that the TPD revision is intended to close.

TED2: How the EU wants to restructure tobacco tax

Rutkowski’s presentation focused mainly on TED2, the reform of the Tobacco Excise Directive, with a particular focus on raw tobacco. Raw tobacco is tobacco that has already been harvested and dried, but has not yet been processed into cigarettes, fine-cut tobacco (tobacco for roll-your-own cigarettes), or shisha tobacco. Whether and how it is taxed depends on when tobacco is still considered raw and when it is already considered ready to smoke.

The EU Tobacco Excise Directive is set to be revised.

The raw tobacco dispute: When is tobacco "raw" and when is it "smokable"?

In the current TED Directive from 2011, raw tobacco does not appear as a separate category. That is why each EU country decides for itself whether and how to tax it.Currently, 13 countries tax raw tobacco, while 14 do not, according to Rutkowski. For many goods, the tax is automatically based on the customs classification, meaning the assignment of a product to a customs tariff code. According to Rutkowski, tobacco is different. Customs and tax authorities can classify the same goods differently and therefore arrive at different conclusions.

So how is it decided whether tobacco is still considered raw or already smoking tobacco? That is determined by a smoking test in the laboratory. Rutkowski reported on a case in Lithuania. There, an expert from the customs laboratory tested the tobacco by manually cutting a sample, filling it into a cigarette tube, and smoking it. Because this could be done with a few simple steps, the tobacco was classified as smokeable.

That may sound like a minor detail, but this classification determines whether the binding EU minimum tax for processed tobacco applies or the national patchwork of rules for raw tobacco. This exact uncertainty was at the center of two court cases decided in 2026.

The invisible line: How courts decide on raw tobacco

Because the line between “raw tobacco” and “smoking tobacco” is so blurred in practice, such cases keep ending up in court. In Lithuania, a company called “Tabako lapai UAB” experienced this firsthand. The case¹ went to court as criminal proceedings. The company imported tobacco and partially processed it, but it was not cut. The disputed question was whether it was still unprocessed raw tobacco, which is not subject to excise duty. For this purpose, customs carried out the smoking test described in the previous section and concluded that the tobacco could be smoked. Because the case concerned the interpretation of EU law, the Lithuanian court referred it to the Court of Justice of the European Union. Must the classification as smoking tobacco follow the customs classification? On April 15, 2026, the EU court ruled that this is not necessary. For tax liability, only the definition in the tax directive matters.

A second case² comes from Germany. Rutkowski reported that in 2017 customs seized more than one ton of tobacco that was intended to be processed into shisha tobacco and suspected tax evasion. The transporter stated that it was not smoking tobacco, but raw tobacco. Two subsequent examinations came to different conclusions. The Education and Science Center of the Federal Finance Administration concluded that the tobacco was suitable for smoking because it could be prepared with just a few simple steps, even at home using instructions from the internet. An expert appointed by the tax court, however, considered it to still be raw tobacco that could not be smoked without industrial processing. Is tobacco only considered smokeable if the public sees it as smoking tobacco? And does it still count as “without industrial processing” if a consumer can complete the remaining processing at home? In its judgment of April 29, 2026, the Court of Justice of the European Union replied that it does not matter how the general public perceives the tobacco.

“the expression 'capable of being smoked' does not lay down a criterion relating to the perception of consumers” – from “DeepDive – Expected Developments Regarding TED2 on Raw Tobacco” by Krzysztof Rutkowski, InterTabac 2026

Several steps that a consumer can carry out at home are still considered “without industrial processing.” The court justified this by stating that steps such as boiling water, glycerin, and sugar do not follow a standardized procedure and that instructions for doing so are freely available online.

What follows from these two rulings? Neither customs classification nor the consumer view matters, and even tobacco that first has to be processed at home can be considered smokable. So when is tobacco still regarded as raw at all? The legal status of snus in Germany and the amendment to Austria’s tobacco law illustrate how national tobacco laws are structured.

What TED2 is supposed to change

What exactly is meant to change with TED2? Two key changes were addressed in the presentation. Raw tobacco is to be redefined across the EU in a new and clearer way. In addition, a minimum rate of 0 euros per kilogram is to apply³. That does not mean raw tobacco would be tax-free in the future. Countries may still tax it at a higher rate, but they must refund the tax paid as soon as it is turned into a finished product that has already been taxed³. Regardless of this, the control obligations are to remain in place. They run via the EMCS (Excise Movement and Control System), the electronic system the EU uses to monitor transports of excise goods between member states. This also includes proof of goods losses and sanctions for violations. So the bureaucratic burden will remain high in any case. Here, Rutkowski criticized that the definition is still too broad and that the administrative burden for small primary processors is disproportionately high. This becomes particularly clear in the case of weight loss caused by moisture. Raw tobacco contains water, so its weight can change between dispatch and arrival. Under the proposal, every loss above an allowed threshold must be investigated, and the authorities may impose penalties. Rutkowski criticized that it is unclear how such losses are to be calculated and verified and how missing quantities are to be handled. His assessment of this: “practically impossible”.

Why TED2 is still taking time

Why has not much happened with this proposal so far? Tax matters in the EU are subject to a special legislative procedure. The Council, meaning the representatives of all member states, must decide unanimously. The European Parliament is only consulted; its opinion is not legally binding⁴. Because unanimity is required, an objection from just one country is enough to delay an agreement. Sweden rejected the planned minimum tax rates for Nicotine Pouches, and a compromise proposal did not receive the necessary support at a meeting of EU ambassadors on 3 June 2026⁵. In a post on X, Finance Minister Elisabeth Svantesson said about the planned tax increase on Snus: “Now we are stopping the EU from raising the tax on snus. […] Other countries do not get to decide over our snus”⁵. From the perspective of a German addiction researcher, Sweden’s approach should set a precedent: He is calling for the EU-wide legalization of Swedish oral tobacco. Other member states had also already expressed their own reservations, for example about the level of the general tax increase⁶. Independently of that, the European Parliament also rejected the Commission proposal in Strasbourg on 17 June 2026⁷ . Because Parliament only has an advisory role, this rejection does not change the actual procedure, as Rutkowski emphasized in his presentation. The date proposed by the Commission for TED2 to take effect is 1 January 2028.⁸ In reality, however, this timeline is only feasible if the Council reaches an agreement soon.

TPD – Where the EU rule ends, national solo action begins

The panel “TPD: What Are The Direct Consequences for Tobacco Retailers?” was not about an ongoing legislative process like TED2. Instead, representatives from Belgium, France, the Netherlands, and Italy reported on what already applies in their countries today. Some of it is based on the existing 2014 TPD, while some comes from national solo measures. A recurring pattern became clear. Bans and restrictions did not make demand for nicotine products disappear — they merely shifted it.

TPD3 is intended to further harmonize the rules for tobacco and nicotine products across the EU.

France: When a ban fuels the black market

Alexandre T. Analis, a trade journalist for the French tobacco retail sector, reported on the current situation in France. The French government has largely banned Nicotine Pouches there. The decree was issued on 5 September 2025¹⁷. Most of the rules have applied since 1 April 2026. Since then, the import, offering, transfer, purchase, possession, and use of nicotine pouches have been banned in France. Other nicotine-containing, tobacco-free products such as nicotine pearls, chewing gum, or liquids are also covered. Chewing tobacco as well as medicines and medical devices for smoking cessation remain exempt⁹. According to the assessment of the Conseil d'État, France’s highest administrative court, sales had already been prohibited beforehand under other provisions of the Public Health Code¹⁰.

However, one company challenged the ban before the Conseil d'État. The court ruled partly in the company’s favor and suspended the part of the regulation concerning manufacturing, production, and export. The deadline had given companies too little time to adapt¹⁰. This did not affect the other bans, which entered into force as planned on 1 April 2026⁹. Several tobacco companies and the association of French tobacco retailers also challenged the ban. On 13 July 2026, the Conseil d'État rejected most of the objections to the ban. It considers the prohibition on offering, transferring, purchasing, or using Nicotine Pouches to be appropriate and compatible with EU law¹⁷. What remains unresolved is whether France may also ban manufacturing, transport, import, export, and possession if the goods are intended exclusively for sale in another EU country. The European Court of Justice (ECJ) is expected to clarify this. Until then, the proceedings are on hold¹⁷.

But what actually happens to demand when a product is banned? Does it simply disappear? According to the panel speakers, it does not. Shortly after the ban, numerous websites reportedly appeared online offering counterfeit, cheap Nicotine Pouches. A black market with street sales and illegal webshops had emerged. At the panel, Analis summed it up like this: “If you ban a product, it goes in the illicit market.” So a ban does not stop demand, especially when many tourists come from countries where the products are allowed. The panelists also commented on the poor reputation of Nicotine Pouches in France. Nicotine Pouches are a new product that is said to possibly carry a lower risk than cigarettes. Because this claim mainly comes from the industry, it is often not taken seriously. This makes it difficult in France to publicly discuss possible differences in risk between the products at all.

Belgium and the Netherlands: two versions of the same ban

In Belgium, tobacco and vaping products have no longer been allowed to be visibly displayed in shops since April 1, 2025. In addition, food stores over 400 square metres have not been allowed to sell tobacco at all since then¹¹. Standardised packaging without brand logos had already been introduced beforehand, and only then came the display ban. It was reported during the panel that many customers did not notice this at first and asked whether the shop even still sold tobacco, because they no longer recognised the sales areas. Smaller brands disappeared from the shelves because customers could no longer see what was available. The conversion costs for shops were said to be considerable. In November 2025, Belgium’s Constitutional Court ruled the sales ban for large supermarkets discriminatory following lawsuits, including from Buurtsuper, an interest group for supermarkets, and the tobacco manufacturer Philip Morris Benelux. As a result, supermarkets over 400 square metres will be allowed to sell tobacco again from January 1, 2027, but it must still not be visibly displayed¹².

In the Netherlands, the display ban has already been in place since July 2020. The panel said the effect on the market had been barely noticeable: customers kept buying from the same places, and only the costs remained with retailers. Because customers can no longer see the products, sales staff have to advise more actively and know more about the products. The ban itself did not make demand disappear, it only changed the way the products are sold. Many retailers had to rethink their entire store concept.

The sale of nicotine pouches has already been completely banned in Belgium since 2023 and in the Netherlands since January 2025, regardless of the display ban for tobacco and vaping described here.

Despite having different lengths of experience with the ban, Maxime Stelleman, who represented Belgium on the panel and is vice president of the Belgian retail association Prodipresse, and Sabas Gras from the Dutch retail association CTS (Collectief Tabak Speciaalzaken), saw one common point. The costs stay with retailers, not with the state or customers.

Italy: How one country is tackling cigarette smuggling

According to Stefano Liberti, the representative from Italy, the Italian black-market initiative “Monitoraggio Agromafie Contrasto Illecito Settori Tabacchi ed E-Cig”, or M.A.C.I.S.T.E. for short, is a working group centered around the Italian financial police, the Guardia di Finanza, that brings together experts from various fields. Its aim is to better understand the illegal tobacco trade and counter it more effectively. Behind it is an Italian foundation together with the agricultural association, and the project also runs in cooperation with Philip Morris Italia¹³. Illegal tobacco trade is not purely an Italian issue, but a Europe-wide problem that takes different forms in each country. According to a KPMG study commissioned by Philip Morris Products SA, around 55.3 billion illegal cigarettes were consumed in 38 European countries in 2025. The study estimates the tax revenue loss at around 22.4 billion euros^{13, 18}. A study by M.A.C.I.S.T.E researcher Stefano Liberti also showed that crime is increasingly changing. Instead of only involving traditional cigarettes, it is now more and more about e-cigarettes, which are sold through covert factories and online trade rather than on the street¹³. Italy is considered a special case because cigarette consumption in the country is comparatively low. Even so, the financial police have already discovered more than 20 illegal warehouses storing cigarettes. The goal of many of these operations is not even the Italian market itself, but production for lucrative sales markets abroad. According to Liberti, this is exactly what shows how important it is to view the problem not only nationally, but internationally as well.

TPD3: The current status

The situation across the EU is just as varied as it is in these four countries. The European Commission also agrees that this needs to change. However, this is not a new decision. A public consultation on the matter already took place in 2022, but since then the process has been repeatedly delayed. On 2 April 2026, the European Commission published its evaluation of TPD2. In it, the Commission examines how effective the directive is¹⁶. The biggest gap in the current legal framework, according to the Commission, concerns flavours, disposable e-cigarettes, and nicotine pouches, as there are still no uniform EU rules for any of the three¹⁵. The issue is especially clear when it comes to nicotine pouches. In one EU country they are freely available, in the next they are banned. Health Commissioner Olivér Várhelyi commented on the evaluation as follows: “If legislation does not keep pace, there is a risk that declining smoking rates in Europe will be replaced by a new epidemic of nicotine addiction, while traditional tobacco use continues to cause harm, including among people aged 55 and over.”¹⁶ His goal is a “smoke-free generation by 2040”. The Commission announced that it will revise the legal framework later in 2026¹⁶. On 18 May 2026, it launched a “Call for Evidence”, meaning a request for citizens, companies, and associations to submit initial feedback on the planned initiative before a specific legislative text is drafted¹⁵. The proposal for TPD3 is not expected before late 2026 or 2027. Actual implementation in the member states typically takes years after that¹⁴ . That also explains why Rutkowski had to rename his InterTabac presentation from TED and TPD to TED2 on his own. In September 2026, at the time of the trade fair, there was still no actual legislative text that could have been discussed.

In terms of content, the TPD is no longer expected to apply only to tobacco and e-cigarettes in the future, but to nicotine products in general¹⁵. The German Association of the E-Cigarette Trade (VdeH) criticized the evaluation report: “The report has fundamental flaws and does not meet the requirements of an evidence-based, balanced assessment.”¹⁴ The Commission justifies its strict plans with concerns about a so-called gateway effect, meaning that new nicotine products could encourage young people to start using tobacco. Associations from the e-cigarette industry, on the other hand, argue that the report ignores the fact that these same products offer adult smokers a way to switch to a less harmful alternative without tobacco smoke and the carcinogenic compounds it contains¹⁴. This approach is called harm reduction. The aim is to reduce health risks by switching to less harmful alternatives, without requiring complete abstinence. Who is right, the Commission or the associations? Both are arguing about the same product, but with different target groups in mind: the Commission focuses on young people, the associations on adult smokers. So far, there is a lack of reliable long-term data on nicotine pouches to fully support either argument. What is certain is that tobacco smoke is eliminated, but nicotine’s addictive potential remains.

Conclusion – what the future holds

Back to the questions from the beginning. What can be said in response after InterTabac? Raw tobacco is not supposed to become tax-free, but rather receive an EU minimum rate of 0 euros per kilogram, while countries may tax it at a higher rate. When it comes to taxes, the Council decides unanimously; for tobacco-free nicotine pouches, each country still decides for itself. TPD3 is intended to close this gap. And do bans make Nicotine Pouches disappear from the market? The speakers see it more as a shift in demand.

At the end of his TED2 presentation, Rutkowski summarized where he sees possible issues for the planned launch in January 2028. These included the definition and scope of the term raw tobacco, liquidity and security deposits, the calculation of losses, as well as costs, administration, and control.

At the panel on the consequences of the TPD for retail, the participants also spoke about future outlooks in their respective countries. Alexandre T. Analis reported that the French government is not willing to reverse the Nicotine Pouches ban. He does not expect a change until after the elections. “We are waiting for the elections in France,” said Analis. Sabas Gras from the Netherlands advised taking a firm stand against the measures. From Belgium, Maxime Stelleman recommended preparing customers for the rules early, rather than waiting until they come into force. His most important advice to the industry: “My main advice is to mobilize collectively”. From Italy, Stefano Liberti described the M.A.C.I.S.T.E. initiative itself as a response to the future, with the aim of thinking and growing internationally in order to better understand the cross-border dimension of the black market.