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Special communication
Tobacco retail licencing systems in Europe
  1. Mirte A G Kuipers1,
  2. Paulien A W Nuyts1,
  3. Marc C Willemsen2,3,
  4. Anton E Kunst1
  1. 1 Department of Public and Occupational Health, Amsterdam UMC - University of Amsterdam, Amsterdam, The Netherlands
  2. 2 Department of Health Promotion, Maastricht University, Maastricht, The Netherlands
  3. 3 Netherlands Expertise Center for Tobacco Control, Trimbos Institute, Utrecht, The Netherlands
  1. Correspondence to Dr Mirte A G Kuipers, Department of Public and Occupational Health, Amsterdam UMC - University of Amsterdam, PO Box 22660 1100 DD Amsterdam, The Netherlands; m.a.kuipers{at}amsterdamumc.nl

Abstract

Tobacco retailer licencing has been recommended as an effective tobacco control strategy. In most European countries, however, retailers do not need a licence to sell tobacco products. We aimed to stimulate a discussion on the potential for tobacco retail licencing in Europe by describing (1) potential public health benefits, (2) licencing methods and (3) barriers and success factors in adoption of licencing systems. There is limited scientific evidence, but tobacco retail licencing may reduce smoking in three ways: (1) improved enforcement of and compliance to existing point-of-sale tobacco control policies (eg, minimum age of sale), (2) a reduction in the number and/or density of tobacco retail outlets and (3) denormalisation of tobacco. Licencing systems may take diverse forms. Systems may make licences expensive, and set criteria for purchasing a licence and retaining the licence after first purchase. In Europe, licencing systems have been implemented in Finland, Hungary, France, Italy and Spain. Licencing in Finland and Hungary was adopted for public health reasons; in Finland, with strong public support. In France, Italy and Spain, tobacco sales were state-monopolised, driven by economic motives. The cases of Norway and Scotland show that adoption of retail licencing may fail when political support is insufficient and tobacco retailers organise opposition with support from the tobacco industry. In conclusion, tobacco retailer licencing is a promising method to contribute to tobacco control efforts. Placing tobacco retailer licencing in a child protection framework may help generate the strong political and public support needed to effectively adopt licencing systems.

  • public policy
  • prevention
  • environment
  • end game

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https://doi.org/10.1136/tobaccocontrol-2020-055910

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    Tobacco retailer licencing has been proposed in the scientific literature1–3 and recommended by the WHO as an important tobacco control strategy.4 In most European countries, however, retailers do not need a licence to sell tobacco products. In this communication, we seek to stimulate discussion on the potential for tobacco retail licencing in Europe and provide a framework for this discussion. We describe (1) potential benefits of tobacco retail licencing for public health, (2) which licencing systems may be adopted and (3) barriers and success factors in the adoption of licencing systems in Europe. We formulate implications for wider-scale adoption of licencing systems in the European setting, which may also provide lessons for settings outside Europe. Our main aim is to encourage a discussion of tobacco retail licencing adoption across the world.

    Potential impacts of licencing systems

    We define tobacco retail licencing as a system which obliges all retailers to purchase a special licence in order to be able to legally sell tobacco products.3 We do not discuss ‘passive’ systems in which tobacco retailers are merely registered or are prohibited from selling tobacco as a sanction for violating other tobacco control policies (eg, sales to minors).

    Licencing has potentially large public health benefits by contributing to the prevention of smoking initiation and support of smoking cessation. First, it may increase effective enforcement of existing point-of-sale tobacco control policies, including age-of-sale laws, bans on the display or promotion of tobacco products, taxation and minimum price laws in three ways. First, licences make compliance checks more efficient as there is a complete register of all tobacco retailers in a jurisdiction and the licence offers a point of contact.5 6 Second, licences act as a lever of control for enforcement as retailers may be incentivised to comply with tobacco control policies in order to avoid having their licence suspended or revoked.3 Third, licencing fees may raise revenue for tobacco control, which can cover the costs of enforcement activities.

    Second, licencing systems may improve public health by reducing the number of tobacco outlets. After implementing licencing systems, the number of outlets was reduced by 28% in Finland (Timberlake D, 2019, written communication, 28th February), 31% in a populous California county7 and 83% in Hungary.6 8 In Australia (state of South Asutralia), increasing the licence fee from 13 to 200 AUS$ decreased the number of retailers by 23.7%.9 In the USA, the number of purchased retail licences decreased 8% in San Francisco10 and 9.8% in Philadelphia after additional requirements for purchasing a licence were implemented.11 Studies found evidence to suggest that lower tobacco outlet density was associated with more favourable smoking outcomes among adolescents12 13 and adults,14–16 and potentially with lower e-cigarette use.17 18 There is little empirical evidence for the effect of tobacco licencing on smoking behaviours, but one study from California observed that adolescent smoking initiation was less likely in communities with stronger tobacco retail licencing regulations compared with weaker licencing.19

    Third, regulating where tobacco is sold and reducing the visibility of tobacco products in the retail environment may contribute to the denormalisation of tobacco. Stricter regulations of tobacco sales may communicate to the public that tobacco products are not like ordinary consumer products, but are much more harmful.1 Such denormalisation of tobacco products and the tobacco industry contributes to smoking prevention and cessation.20

    Types of licencing systems

    Table 1 summarises methods that may be used within tobacco licencing systems. We distinguish three main categories of methods to ultimately reduce the number of retailers through licencing: increasing the cost of selling tobacco, applying limiting criteria for purchasing a licence and applying criteria to retain a licence. A licencing system can increase the cost of selling tobacco by making a licence expensive, asking a high renewal fee and adding a monitoring fee to cover enforcement costs. Several criteria may be applied to the purchase of a licence. Retailers may be required to be located a certain distance from schools or from other tobacco outlets. Other options include restricting sales to specific retailer types (eg, only tobacconists) or to limit the total available number of licences granted in an area. In the latter case, licences may for example be sold on a first-come-first-serve basis, through lottery or auction. Lastly, the system may specify how retailers may retain or lose their tobacco licence. Regular renewal can be required, for example, on an annual basis. The licence may be revoked and sales by that retailer prohibited if other tobacco control policies are violated, such as selling tobacco to minors.

    View this table:
    Table 1

    Possible methods in tobacco retail licencing

    Table 1 provides an overview of potential ways in which each method may affect the number of tobacco retail outlets. There is no evidence on how each method, or combination of methods, may be more or less effective than others in reducing the number of outlets. In general, more restrictive licencing systems may have a larger impact on reducing the number of tobacco retailers, and therefore on adolescent and adult smoking, than more open forms of licencing. In order for any licencing system to be effective, sufficient enforcement mechanisms need to be in place to ensure retailers are not selling without a licence.

    Tobacco retail licencing in Europe

    In Europe, licencing systems have been implemented in Finland, Hungary, France, Italy and Spain. Finland implemented its licencing system in April 2009. Retailers have to apply and submit an annual self-monitoring plan, pay a licencing fee (determined at the municipal level, ranging from €100 to €180), pay a supervision fee of €500 and renew their licence.5 6 21

    In July 2013, Hungary implemented the most restrictive licencing system in Europe. Retailers were required to submit an application, write a business plan and pay a licence fee, after which licences were auctioned.8 Selling tobacco without a licence can result in fines up to US$2.2 million, depending on retailer revenue.8 The number of available licences in a region or city depends on its population size, with one licence permitted per 2000 residents.5 6

    In France, Italy and Spain, tobacco sales are monopolised by the national government.5 22 State-monopolies stem from the colonial age and laws for state-monopolies have been adopted in 1816 in France, 1887 in Spain and 1927 (in its current form) in Italy.23–25 In France, retailers have to meet a number of personal and business criteria.23 In Italy, tobacco retailers are to keep a minimum distance from one another, dependent on the municipality (eg, 300 metres between retailers in municipalities with a population of 30 000 or less).26 Spain adopted a nationwide minimum distance in 1998. The number of available licences depends on the volume of sales in the area and the distance to other tobacco retailers (minimum of 150 metres).22 In Spain licences are auctioned.

    Countries have had different motives for implementing tobacco retail licencing systems. The wish to improve public health in Finland and Hungary is associated with relatively strict licencing systems.27 Hungary specifically aimed at preventing adolescent smoking and reducing the number of tobacco outlets,8 and Finland aimed at reducing illegal sales of tobacco to minors.5 In contrast, France, Italy and Spain mainly aimed at increasing government profit from the sales of tobacco. In Spain, an additional motive was to regulate competition between retailers through setting a minimum distance between retailers.22

    As presented in the section on impacts of licencing systems, tobacco retail licencing in Hungary and Finland substantially reduced the number of tobacco retail outlets. For the licencing systems of France, Italy and Spain there is no direct empirical evidence for their effects on retail outlet reduction or smoking outcomes. From indirect evidence we may conclude that these systems did not contribute to smoking prevention. According to tobacco control experts from Italy and Spain there was a 3.5% decline in the number of tobacco control outlets in Italy between 2012 and 2016 and and a 4.1% decline in outlets in Madrid between 2014 and 2020.28 These are smaller reductions than were found in Finland and Hungary. There are also no clear indications that tobacco use was affected, as adult and adolescent smoking prevalence is not lower in France, Italy and Spain than in other European countries.29 Moreover, in 2017, Italian adolescents reported to have easy access to cigarettes; 23.8% of adolescent smokers bought cigarettes in a shop compared with 21.4% in Portugal and 3.3% in Finland.30 Based on this evidence, we may conclude that the way in which licencing systems were implemented in France, Italy and Spain, that is, driven by economic rather than public health motives, may not be effective in substantially reducing tobacco consumption in the longer term.

    Experiences with adoption in Europe

    Very few countries in Europe have adopted a licencing system. In this section we explore what drives or hinders adoption. In particular, we discuss the adoption process in Finland and Hungary, and why adoption failed in Norway and Scotland. Adoption in France, Italy and Spain is not discussed in depth, as these are longstanding state-monopolies whose adoption of licencing does not provide lessons for 21st century Europe. We consider adoption and implementation of tobacco retail licencing at the national level, as this is the most likely scenario for Europe, although some larger countries with more autonomous regions may apply similar adoption strategies at lower levels.

    Hungary successfully adopted and implemented a licencing system despite opposition from civil society and tobacco retailers.8 Opposition was particularly strong due to the non-transparent selection of retailers granted a licence, in which the government was accused of nepotism.8 Although strong political will has been identified as the main success factor in overhauling the retail sector when implementing the licencing system in Hungary,8 this strength resulted from an autocratic rather than democratic approach.

    In Finland, the adoption of licencing has been positioned within the context of the aim of a smoke-free Finland by 2030, which is defined as reaching <5% smoking prevalence across subgroups within one generation.5 21 The adoption of a licencing system was specifically framed to protect children from taking up smoking. In general, there has been strong political and societal support for tobacco control policies in Finland over the last decades.

    Some other countries have considered tobacco licencing, but failed to adopt it. In Norway, a licencing system was proposed in 2013 as a means of improving enforcement of age-of-sale laws.31 Adoption was hindered by strong opposition from retailers and the instalment of a new government shortly after.5 It was reported in 2014 that the new government might choose a ‘less bureaucratic solution’ such as a registration system.5 In 2017, Norway implemented a national registration system. In some municipalities, retailers pay a registration fee, and retailers selling tobacco without a licence may be fined or banned from selling tobacco (Sæbø G, 2020, personal communication, 26th October). In Scotland similar issues were faced in 2007. The tobacco industry strongly opposed the licencing system, spread misinformation and encouraged retailers to speak out against the proposed policy. The arguments were mostly focussed on the financial loss that retailers would suffer, especially if they could not meet all criteria to obtain a licence (eg, distance to schools or other retailers).28 According to experts, the tobacco industry actively lobbied to turn members of parliament against licencing.28 The Scottish government also chose a registration system instead of a licencing system, in order to limit the burden on local authorities as well as retailers, as retailers had to provide less information for a register and no payments were involved.5 The bureaucratic burden for the authorities was not a barrier for adoption in Finland and Hungary as the licence fee covers the administrative costs and includes a supervision fee.

    Prospects for future adoption in Europe

    Previous cases demonstrate that having sufficient political support is a prerequisite for adoption of a tobacco retail licensure policy. Political support was strong in Finland, while it was insufficient in Norway and Scotland due to perceived high bureaucratic burden of licencing. Societal support has also contributed to adoption in Finland. Framing licencing as a way to protect children from the harms of tobacco could improve political support, as was the case in Finland.27 32 Smoke-free generation goals have been set in at least five European countries including Scotland, Ireland, the Netherlands and Belgium.33 The potential for adopting tobacco retailer licencing, when framed in the context of such goals, may be particularly high in these countries.

    In order to increase poltical support, it will be important for advocates to emphasise the public health benefits of tobacco retail licencing, including the improved enforcement of existing tobacco control policies to prevent sales to minors, as well as enhanced monitoring of other retail tobacco control regulations. Besides these public health benefits, there may be financial benefits that appeal to politicians. These may include a lower risk of tax evasion and illegal tobacco sales or smuggling, and a potential source of income for enforcement of other regulations at the point-of-sale (eg, advertising regulations for other products). Emphasising that the sale of other harmful products (eg, alcohol, gambling items) and other types of services (eg, physicians, hairdressers) require a licence, while a deadly product currently does not, highlights the incongruity of not licencing tobacco retailers.

    Dealing with retailer opposition is challenging as opposition may be orchestrated by the tobacco industry and involving tobacco retailers in the policymaking process may delay and dilute policies.34 35 Offering financial or other types of incentives (business consultations, other resources) to retailers to discontinue tobacco sales may be one way to reduce opposition and at the same time potentially speed up the reduction of the number of tobacco retail outlets.36

    Experiences outside Europe may provide additional insights. Adoption of local tobacco retail licencing in California was supported by adoption campaigns.37 Successful campaigns (ie, leading to policy adoption) tended to work closely with the local stakeholders and community, and built relationships with local law enforcement agencies and decision-makers from the start to increase support.

    Wide-scale adoption of licencing systems may be enhanced by scientific evidence on their effectiveness. Further research may evaluate policies that are implemented, both within Europe and in other parts of the world. Past experiences with licencing systems, or any new initiatives, may be used as ‘natural experiments’ to examine how licencing may contribute to tobacco control. We may also learn from past experiences how strategies of adoption may be optimised, taking into account the perspectives and potential influence of different interests groups.38

    Conclusion

    Tobacco retailer licencing is a promising step toward more effective monitoring of the retail environment and denormalisation of smoking. It facilitates better enforcement of policies against selling tobacco products to youth and appears to contribute to reductions in the ubiquity of tobacco retailers. Licencing in Europe, and potentially in other policy contexts as well, may be most likely to be effective in countries with a focus on child protection and high level of political will for tobacco control, as this facilitates the adoption of licencing systems with a clear public health goal.

    What this paper adds

    What is already known on this subject

    • Tobacco retailer licencing has been recommended as an effective tobacco control strategy.

    • In most European countries, however, retailers do not need a licence to sell tobacco products.

      What important gaps in knowledge exist on this topic

    • Until now, there is no systematic overview of the potential benefits of licencing systems, methods of licencing and barriers and success factors in adoption of licencing systems in European countries.

    • Such an overview could stimulate a discussion on the adoption of tobacco retail licencing in Europe.

    What this paper adds

    • Tobacco retail licencing may contribute to smoking prevention through improved enforcement of existing point-of-sale tobacco control policies, through reductions in the number of tobacco retail outlets, and through denormalisation of tobacco.

    • The effectiveness of licencing methods may depend on the cost of licences and the criteria for purchasing and retaining a licence, such as minimum distance to schools or to other retailers.

    • Framing tobacco retailer licencing within a child protection framework may help generate the strong political and public support needed to effectively adopt licencing systems.

    Ethics statements

    Patient consent for publication

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    Footnotes

    • Twitter @Marc_Willemsen

    • Contributors PAWN and MAGK studied the literature, PAWN drafted the manuscript and MAGK wrote the final manuscript. MCW and AEK were closely involved in the interpretation of the findings and provided critical input on the manuscript. AEK supervised the process.

    • Funding The authors have not declared a specific grant for this research from any funding agency in the public, commercial or not-for-profit sectors.

    • Competing interests None declared.

    • Provenance and peer review Not commissioned; externally peer reviewed.