The principality of Andorra has decided to set a minimum on the price of tobacco. The price of a pack of cigarettes must now correspond to at least 65% of the price in France and Spain. This law was adopted to limit the amount of cigarette trafficking in the country.
Located in the Pyrenees, Andorra is a country of 75,000 people. Despite its small size, the tobacco industry generates 110 million Euros every year. To compare, cigarette sales in France reached 14.2 billion Euros in 2016. Every day, French citizens cross the border into Andorra to buy cigarettes.
Unlike France, tobacco taxes in Andorra are low and the cigarette market is a free market. Consequently, prices are quite attractive to French smokers looking to save some money. In addition, the rates are even lower for larger purchases: currently a pack of Marlboros costs between 2.70 Euros and 4 Euros, compared to 8.80 Euros in France.
A partnership supported by Andorra and France
The government of Andorra reached out to the European Union to help border countries in their fight against tobacco trafficking. These new measures come as a breath of fresh air for tobacconists located near the border, especially because the price of a pack of cigarettes in France is expected to rise to 10 Euros by 2020. Under these conditions, it is very hard for French tobacconists to compete with their compatriots just across the border.
The authorities in Andorra have also decided to help the French government. Customs officers in Andorra will now work alongside their colleagues in France. To reduce cigarette trafficking, those returning from Andorra are limited to bringing back 4 cartons of cigarettes per visit. Those who do not respect these new regulations will either have to leave their purchase at the border or pay a fine. In extreme cases, their vehicle may even be impounded.