French Tobacco Retailers Warn That Price Gap with Spain and Andorra Threatens the Future of the Sector

French tobacco retailers have launched a campaign to denounce the difficult situation facing the sector, which is being affected by strong competition from Spanish retailers, where tobacco is sold at significantly lower prices.

According to the retailers, this price difference is causing a continued decline in sales and has contributed to the closure of 263 tobacco shops over the past 20 years.

The campaign features dozens of the traditional red tobacco-shop signs symbolically displayed near the Spanish border to highlight the gradual disappearance of these businesses. The message is clear: fewer and fewer tobacco shops are remaining open.

A Price Gap of More Than 100%

Jérôme Récapet, president of the Confederation of Tobacco Retailers of Pyrénées-Atlantiques, says the outlook for the sector is "far from reassuring."

According to Récapet, the combination of falling sales volumes and constantly increasing tobacco taxation is putting the viability of many businesses at risk.

Retailers attribute much of the problem to the price difference with Spain and Andorra.

Récapet recalls that several decades ago the price gap stood at between 30% and 50%, but it now exceeds 100%, encouraging many French smokers to cross the border to make their purchases.

Tobacco Shops Try to Reinvent Their Businesses

To offset the decline in tobacco sales, many retailers have opted to diversify their businesses. Some shops now sell socks, toys, printer cartridges, local products and even provide administrative services.

In addition to selling tobacco, many retailers allow customers to pay taxes, fines and school canteen fees, as well as collect parcels.

However, retailers insist that tobacco remains their main commercial attraction.

According to industry representatives, tobacco accounts for between 40% and 80% of turnover at tobacco shops in the department, depending on the individual business.

Smuggling and Counterfeit Tobacco Also Raise Concerns

Retailers say that legal competition from Spain is not the only problem. They are also warning about the increase in tobacco smuggling and counterfeit products, which are putting further pressure on their sales.

According to their estimates, tobacco shops in Pyrénées-Atlantiques currently sell only around 30% of the tobacco consumed in the department, despite tobacco sales being a state monopoly in France.

Fewer People Are Smoking

The sector is also being affected by a decline in the number of smokers.

The latest figures from the French Observatory for Drugs and Addictive Trends indicate that fewer than one in five adults smoked daily in 2024, the lowest figure recorded since 2000.

At the same time, sales of electronic cigarettes, pipe tobacco and shisha tobacco have experienced a slight increase.

A study by Santé Publique France estimates that tobacco was responsible for more than 68,000 premature deaths in France in 2023, accounting for 11% of all deaths.

French tobacco retailers warn that unless the price gap with neighbouring countries is reduced or measures are introduced to limit cross-border tobacco purchases, the number of closures could continue to rise in the coming years.