Cut-price tobacconists fall foul of French law

A few years ago, Adinkerke was a forgotten, dilapidated village of red-brick houses, just inside Belgian's border with France, stretching north of Dunkirk.

In the past four years it has been transformed with garish signs reading "Smokey River", "Eurobaccy", "Tobacco Alley", "Smugglers' Corner", and "Coronation Street Tobacco Shop".

The opening this month of yet another tobacco shop in the village - a cigarette supermarket called Real Tobacco XL - has ignited a new Battle of Dunkirk: a legal row between France and Belgium over the rights of EU citizens to dodge national anti-smoking policies by crossing European borders to buy cheap fags.

The owners of Real Tobacco XL, and four other emporiums along the Franco-Belgian border, flooded northern France with advertising flyers for their new shop earlier this month. The French tobacconists' association pounced.

They had been able to do nothing, under EU law, about the cheap cigarette shops in Belgium. But they could bring a legal action against the Belgian firm for breaking an 18-year-old law which bans all forms of tobacco advertising in France.

"Over there they have no system of tobacco licensing, anyone can start a tobacco shop," said Patrick Falewee, president of the Dunkirk area tobacco trade association. "Now, at last, we can fight back. "

In the past decade, French governments have adopted a health-conscious approach and imposed steep tax increases on tobacco.

The 6 per cent tax increase last month has increased the price of a packet of 20 Marlboros - the most popular brand in France - to €5.60 ($11.71). This is about £1 ($2) a packet cheaper than in Britain. It is about €1 a packet more than in Belgium, and at least €2 a packet more than in other EU nations, such as Spain, Italy and Luxembourg.

The British American Tobacco company estimates that more than one in five of all cigarettes smoked in France is bought abroad. Germany also has very cheap tobacco neighbours in Poland and the Czech Republic. There is a growing trade in smuggled cigarettes in Europe but many smokers have discovered the pleasures of perfectly legal, or almost legal, cigarette tourism.

Helene Marcuzzo, 32, from Dunkirk, was loading up her car with cigarettes in Adinkerke. "I can buy 200 cigarettes for €46 here, compared with nearly €60 in France. . I understand why the French shops are upset but what about the poor French smoker? They keep putting the taxes up and up. What are we supposed to do?"

Give up smoking, maybe? Marcuzzo looked appalled. "Oh, no, no, no, no," she said. "No, no, no, no."

CONTRABAND FLOODS ACROSS EU

* Since joining the European Union in 2004, Poland has been steadily increasing tobacco duty to meet EU targets. As a result, cigarettes are frequently smuggled into Poland from bordering Ukraine, where tobacco is much cheaper.

* In the former Yugoslav republics, the yawning gap between local and EU cigarette prices has prompted the growth of a lucrative smuggling trade across the Adriatic.

* A study this year estimated that 657 billion black market cigarettes are sold aroiund the world annually, costing governments nearly £25 billion ($57.5 billion) in lost revenue.

- INDEPENDENT