EU Tobacco Products Directive: Track and Trace for tobacco products

The first phase of the revised EU Directive on the traceability of tobacco products comes into effect on 20 May 2019. From then on cigarette packs etc. will have to be labelled with an individual ID code.

According to a study by the professional services company KPMG, trading of counterfeit and smuggled cigarettes accounted for 8.7 percent of overall consumption within the EU, Norway and Switzerland in 2018. This corresponds to an estimated figure of approx. 8.5 percent or around 44.7 billion cigarettes worldwide. Along with warnings on the health risks associated with smoking, in future tobacco products will also have to carry a unique serial number in order to combat illegal sales. For packaging manufacturers this involves the mandatory application of an individual code to packaging and tobacco products.

Every day around 750 million packs of cigarettes are sold over the counter around the world. The first phase of the revised EU Directive on the traceability of tobacco products within the European market relates to cigarettes and hand-rolling tobacco. The plan is to roll it out gradually to all other tobacco products by 2024. The standard requires scanning and recording of every movement of the tobacco products throughout the entire supply chain. Every single tobacco product pack must be marked with an individual ID code and incorporate features which help protect against counterfeiting.

At present around 75 percent of packing codes within the European packaging market are applied using high-quality laser codes. The advantages of this are the low maintenance requirements and good reliability. However, the new regulation for the tobacco industry means increased demands on the barcode. In future it will be required to have the capacity to store information enabling uninterrupted tracking in real time from start to finish of the process and transmission of this data to a central EU database. This will entail coding of up to fifty characters per data carrier – a number that is much too high for most classic data matrix codes. At the same time, increased storage of information means longer labelling processes for manufacturers. The performance of existing coding equipment will need to be improved or additional features added. Integration of the new labelling systems into production lines is not always possible.

The choice of which 2-D code type each Member State uses, whether a data matrix, a dotcode or QR, is left to each country. At present either the 2D dotcode or a data matrix code is used for labelling, and these will additionally be applied to cigarettes and the packaging of hand-rolling tobacco. In their quest to record a wealth of information in a small space, the tobacco industry is turning to the pharmaceutical and electronics industries for models. Here they generally use so-called dotcodes, comprising up to 144 black and white fields, which can record comparable large amounts of data in a small space. 

In order to comply with the track & trace system, stickers with a serial number can be applied to the affected tobacco products. Data storage will ensure that each step throughout the entire supply chain can be traced. Individualisation will be built in during manufacturing. For this, manufacturers will have to have access to the necessary label printer and enter into a partnership with an external company to provide suitable software.

France has seen a continuous increase in levels of criminal activity in connection with the tobacco trade in recent years. Between 2017 and 2018 the number of break-ins at tobacconists rose by a good seven percent, and in January 2018 alone cigarettes to a value of €407,400 were stolen. In January 2019, Philipp Morris France, in collaboration with the market leader for connectivity, Sigfox, and with Follower Product (FP), introduced the world’s first smart tagging system to combat cigarette theft and the smuggling of tobacco products. Following a successful six-month testing phase, the so-called calumet tag devised by FP was approved by the French Ministry of the Interior and is initially being introduced regionally, with introduction at national level planned for a later date. It is based on use of the Internet of Things (IoT), is designed to be bi-modal and is connected to the Sigfox network as standard. In the event of a theft it is thus possible to locate the goods immediately. Provided that Sigfox network coverage is available, the technology can also be used in other sectors and across borders.

In addition to security in respect of counterfeiting there are always issues relating to healthcare and disease prevention where cigarette packaging is concerned. The Dutch Ministry of Health would like to prescribe a standard form and colour for all cigarette packaging in the near future. This would mean that alongside health warnings and photographs, the only individualised printing allowed on the packaging would be the name of the manufacturer. The Ministry would like to roll this out to hand-rolling tobacco and e-cigarettes by 2022 and to increase the price of a pack of 20 cigarettes to ten Euros a pack within the next four years. According to the latest figures, at present around 22 percent of the population of the Netherlands smokes.

Australia was the first country in the world to introduce the so-called plain packaging in 2012, followed by Great Britain years later. The Saudi Arabian Food and Drug Authority has also already taken steps towards the use of standardised packaging for all types of tobacco products. According to these, the brand and product name must be printed on the packaging in the prescribed colour and font; no other logos, colours, images or advertising information are permitted either on or in the packaging. This must be implemented by 1 May 2019.