The Council of Ministers approved, on the proposal of the Finance Minister, Jordi Cinca, the Draft Law regulating the establishment of minimum prices for the sale of tobacco products. This text provides for the creation of a commission that will propose the list of minimum prices for each brand of tobacco taking into account the difference in neighboring countries.
The bill, which has entered into the urgent route, makes it possible for the first time to establish a list of minimum retail prices for all tobacco products. This text has been presented to the representatives of the sectors involved and has been exposed to all parliamentary groups before its approval by the Council of Ministers.
The text provides for the creation of an Advisory Committee for the Fixing of the Initial Minimum Price of Tobacco Products, which will be composed of Government representatives, tobacco manufacturers and merchants. This commission will elaborate an exhaustive list with the minimum price of each one of the products that will have to be established unanimously and will send it to the government for its approval.
When establishing these minimum prices, the bill stipulates that the preservation of a competitive margin in all products in relation to the neighboring country with whom the price difference is lower must be taken into account. In this way, we want to guarantee the competitiveness of the sector, but avoid a sharp reduction in prices that adversely affect the margins. In addition, the measure is consistent with the anti-smuggling actions undertaken by the Government.
The bill also provides for lower prices to be modified when there is a price increase in the neighboring country with the lowest differential. In these cases, the Government will approve the modification by means of a decree.
Similarly, the text prohibits promotions to sell tobacco products below the minimum prices. In addition, it states that promotions associated with tobacco products can not include products with a value higher than 5% of promoted tobacco products.