Finland's tax reform on nicotine bags may cause price fluctuations. New product prices are affected by tobacco taxes

Finland's tax reform on nicotine bags may cause price fluctuations. New product prices are affected by tobacco taxes

Recently, Pledgetimes reported that Finland’s tax reform on nicotine pouches took effect in early January. The tax reform could cause the price of nicotine pouches to fluctuate, with the price of new items affected by the tobacco tax while the price of older items remains unchanged.

For example, a nicotine bag that previously cost 6 euros may sell for 8.5 euros in the future, and consumers may not know the actual price until they pay. The uncertainty of this price is due to the fact that in principle, merchants can sell nicotine bags that are put into storage before the end of the year at the current price until the end of June next year. The new prices will be applied after the used items are sold out at each point of sale.

The government anticipates in the bill that industry operators may stockpile large quantities of nicotine pouches ahead of the legal reform. Therefore, they can continue to sell at the original price for some time after the new year begins.

Neither the Treasury nor the grocery store union (Päivittäitavarakauppa ry) know, nor want to publicly estimate, when consumer prices for nicotine pouches will start to rise. “We can’t assess that because we don’t know the warehouse sizing and pricing decisions,” Treasury negotiator Jenni Oksanen said.

Since the ban was lifted, the price of nicotine bags in Finland has stabilized at 5-7 euros. In terms of sales statistics, Päivättäitavarakauppa's Luoto estimates that 1.5 million boxes of nicotine pouches were sold in retail stores between July and September alone.

Luoto said that this amount may seem large, but the actual number used is obviously larger. He reminded that nicotine bags are also imported and ordered from abroad. As for whether nicotine pouches increase nicotine product use or displace other nicotine products, no one knows yet.

For example, some users of nicotine products have switched from using snus to using nicotine pouches. Customs said seizures of snus dropped significantly after the ban on nicotine pouches was lifted.

According to the government's bill, the tax reform aims to increase the price of nicotine pouches to prevent the harm they cause.
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