The Spanish government is set to block the EU’s proposed tax hike on tobacco and nicotine products, citing its demands for a lower rate for hand rolling tobacco.
Madrid made the demand at a meeting of top EU diplomats known as the Council of Permanent Representatives last Wednesday, according to sources.
Spain's intervention threatens to derail a deal that EU governments have spent months negotiating, with the Irish Presidency hoping to secure an agreement when finance ministers meet on 9 November.
According to a report of the meeting seen by Clearing the Air, Spain insisted that the proposed minimum tax rate for fine-cut tobacco must be significantly reduced. Sweden has already said it will reject the most recent proposal, which reduced rates on nicotine pouches, but insufficiently so for Stockholm.
But Spain's objection is different: it is demanding relief for a combustible tobacco product, rather than a safer alternative.
Apparently, nicotine alternatives deserve a crackdown, but rolling tobacco deserves a tax break.
With a general election scheduled for 29 November, just three weeks after the planned EU agreement, the politics of raising taxes on smokers could hardly be more sensitive.
Spanish Prime Minister Pedro Sánchez's government faces voters at the end of the month, and a commitment to making rolling tobacco more expensive may not be the sort of campaign message it wants to deliver.
The position is particularly striking given the enthusiasm with which Spain's Health Minister, Mónica García, has championed tougher restrictions on alternative nicotine products.
Just weeks earlier, García joined health ministers from seven other EU countries in demanding sweeping new restrictions on tobacco and nicotine products.
In an October letter to EU Health Commissioner Olivér Várhelyi, the eight governments called for a freeze on new nicotine products entering the European market, restrictions on flavours and the possibility of national bans on nicotine pouches.
The letter also demanded tighter controls on advertising and marketing, while setting out an ambition to phase out nicotine dependence altogether.
Yet while Spain's health ministry is pushing Brussels to restrict products that can offer smokers alternatives to cigarettes, its government is simultaneously threatening to veto legislation unless taxes on rolling tobacco are lowered.
Apparently, nicotine alternatives deserve a crackdown, but rolling tobacco deserves a tax break.
The directive requires unanimous agreement among the EU's 27 Member States, meaning Spain can single-handedly prevent the legislation from advancing. Finance Ministers meet next week in Brussels, where they will try to reach a final agreement.