|Italian tobacco farmers believe that the new tobacco regulations could link the premium given with the quality of leaf produced. They feel that only through quality tobacco, can the industry face competition from lower-priced foreign tobacco and that the EU needs to support the tobacco sector because it provides jobs in areas with no alternative industries.
Italy warns the EU that a reduction of tobacco-production in the EU would not affect amount of smoking, but instead would cause the level of leaf imports to rise (1).
- Italy has an all-types quota of 132.800mkg (EU's biggest producer) (1).
- Italy and Greece are the main producers of raw tobacco: 75% of the total EU production.
- In 1986, Italy produced 145,000 tons of tobacco (1.1% of total agricultural production) and had 64,000 tobacco growers selling 30% to manufacturers, which is being taken up by the state monopoly.
- Production doubled from 1971-1981 and has increased by 25% from 1985-1989 (27).
- In 1997 the tobacco industry had 90,758 tons in volume sales with cigarettes dominating the tobacco market comprising of 98.9% of volume sales (26).
- In 1998 Italy had sales of 92.3kg of tobacco with cigarettes accounting for 98.5% of sales out of a total market of 21,353 billion Italian Lira (11).
- Tax per pack of cigarettes in Italy (US Dollars, 1995): $1,597
- Excise domestic tax (lire per kg or 1000 cigarettes, 1999): Lit 7280000
- Excise foreign tax (lire per kg or 1000 cigarettes, 1999): Lit7 280000
- Domestic ad valorem tax (1999): 54.27%
- Foreign ad valorem tax (1999): 79.2% (38)
With high taxes and prices favoring local cigarettes, smuggling becomes a big problem.
- Smuggling accounts for 10-12% of cigarette sales and sometimes rising to 15% or 50% (in Naples).
- Revenue is lost and, therefore, unavailable for social benefits (1).