First excise tax introduced on nicotine pouches, then proposals aimed at removing these products from the market — business representatives warn that the regulations being prepared by the Ministry of Health are creating legislative chaos in the tobacco industry. This is especially surprising for entrepreneurs because it contradicts the government’s ongoing deregulation process in the economy. Moreover, it may have negative consequences for the state budget and cause a sharp rise in the gray market.
In mid-June, the Ministry of Health proposed a ban on the sale of disposable e-cigarettes — both nicotine and nicotine-free — and a ban on the use of flavors in nicotine pouches. Since flavored pouches practically make up the entire market, the proposed ban would effectively remove the entire category from the market. The draft law is currently under public consultation, with new rules expected to come into force in 2026.
“This is an example of regulation that primarily strikes at consumer freedom, but also shows how little regard the government has for industry and the whole economic sphere of our lives. This mainly stems from the fact that nicotine pouches will be subject to excise tax from August, so entrepreneurs could assume it would remain a regular market product. However, as seen from the Ministry of Health’s proposal, the actual goal is quite different,” said Aleksander Pawlak, Director of Development at Warsaw Enterprise Institute, in an interview with Newseria.
The new proposal is yet another attempt to regulate the tobacco industry. On April 17, 2025, regulations banning the sale of heated tobacco products with characteristic flavors came into force. In June, the president signed an amendment to the anti-tobacco law banning the sale of e-cigarettes and nicotine pouches to persons under 18 and banning their online sale; this will take effect on July 5. Recent months also saw an excise law amendment including new product categories in the tax, such as single-use and reusable e-cigarettes and nicotine pouches.
“We have legislative absurdity because, on the one hand, the market is regulated with specific restrictions and solutions for entrepreneurs who gained some certainty about operating in this market and received clear guidelines. On the other hand, as soon as these guidelines appear and excise tax is introduced on these products, the ministry returns to the idea of a complete ban on nicotine pouch sales,” said Szymon Witkowski, chief legislator and plenipotentiary of the Employers of Poland for social dialogue.
“We do not really know what the legislator wants to achieve,” added Marcin Nowacki, vice president of the Union of Entrepreneurs and Employers. “Today there is chaos and uncertainty regarding pouches. We do not know in which direction the market should develop or what the regulations should look like. I emphasize that the gray market is growing in the tobacco industry.”
Experts warn the chaos may soon increase further because Poland will likely have to implement a new EU directive on all tobacco products, which the European Commission will soon begin working on.
“There is a lot of talk about simplifying regulations and that business needs more freedom. Instead of focusing on enforcing existing regulations, new ones are created, which primarily restrict the freedom of both business and consumers,” said Aleksander Pawlak.
“The deregulation process announced by the government is ongoing and is upheld as a priority for the coming months. Unfortunately, the reality and policies implemented in legal acts do not always confirm this. The regulation of tobacco and nicotine products is a negative example. It shows how not to act on the market because the market is unstable and chaotic, and we do not know which way to go. We call on one hand for reason and for the base regulations that have been adopted and will soon enter into force, but on the other hand, the government tries to ban selected product categories, seemingly contradicting the EU and market trends,” stressed Marcin Nowacki.
According to the regulatory impact assessment, the excise tax increase on e-cigarettes and nicotine pouches (along with the ban on disposable products) is expected to bring significant revenues to the budget — PLN 82.5 million this year, PLN 433.7 million next year, and PLN 524.7 million annually from 2027. Introducing the proposed bans could therefore cause potential losses for the budget.
“If these excise regulations came into force in April and now we are discussing a sales ban, the budget is foregoing very real revenues. Today, when we have serious problems balancing the state budget, this solution is completely incomprehensible from the ministry’s side; it actually harms our country’s fiscal interest,” argues Szymon Witkowski.
Losses for the budget could be even higher because new restrictions may increase the gray market, which according to KPMG’s report “Tobacco Gray Market in the EU and Poland in 2024” currently accounts for 4.3% and is growing (by 0.65 percentage points year-on-year). It is estimated that one in every 25 cigarettes smoked in Poland comes from illegal sources — 1.85 billion illegal cigarettes, 23.3% more than the previous year. The problem is growing; in Q4 2024, the illegal cigarette share reached 6.6%.
“Today the gray market causes over PLN 1.2 billion in budget losses, and any significant sudden change, whether in excise policy or product bans, will affect this. There is no doubt that sharp excise hikes or product bans will increase the gray market,” said the ZPP vice president.
A study commissioned by the Economic Freedom Foundation, “The Impact of Excise Tax on the Tobacco Market in Poland” by the Public Finance Institute, shows that a 10% increase in excise tax rates leads to a roughly 1% increase in consumer spending on cigarettes, accompanied by a 9% drop in cigarettes sold. Stricter regulations may drive increased sales of nicotine products in neighboring countries.
“There are no plans yet to ban nicotine pouches across the entire EU, so Poles will be able to buy these products in neighboring countries without any problem,” Aleksander Pawlak points out.
“Let’s wait for EU regulation, the revision of the Tobacco Products Directive, and align our regulations with the single EU market. Otherwise, we will generate a growing gray market and illegal imports of banned or heavily taxed products into Poland,” advocates Marcin Nowacki.
This is confirmed by cases in Belgium and the Netherlands, where sales of nicotine pouches have been banned. Currently, these products are available illegally and in higher nicotine concentrations, above 20 mg per pouch. A similar situation could arise in Poland, which, experts say, will cause more health harm to consumers than legal products.
“We must remember that the market evolves, and new products aim to reduce harm. Nicotine pouches and other innovative products often have limited emissions and no tar substances, unlike cigarettes. So, when we block the market development and alternatives, we must consider whether this truly serves consumer interests and health,” said the Employers of Poland plenipotentiary.
