CatMonster wrote: But doesn't alcohol cause bigger health problems ?
The government has steadily been increasing the tax on tobaco in europe over many years.
Because of this high tax on tobaco many have stopped smoking or switched to alternative means.
What i'm saying is that european governments are killing their own tax revenue from tobaco. Doesn't make any sense from a financial point of view.
catmonster , You wrong ... govt is not killing tax revenue but increasing
read about tobaco income and profit
Take British American Tobacco (BAT), one of the world’s largest tobacco companies. In 2006, it sold 691 billion cigarettes and had a market valuation of £29.6 billion. In 2014, it sold only 667 billion cigarettes but notched up a year-end valuation of £65.2 billion.
Similarly, Imperial Tobacco has boosted its profitability significantly over the past two decades. Its UK operating margin rose from 49% in 1996 to 68% last year. Remember though, that past performance is not an indicator of what could happen in the future.
One reason for this resilience is that it is easy for tobacco companies to raise prices. Tax accounts for most of the price of a typical premium-brand cigarette packet – in the UK, the figure is almost 80% – so consumers are unlikely to notice if the manufacturer adds a few pence to the overall cost. This incremental price-hiking has helped tobacco companies to make up for falling sales volumes.
Another is consolidation: many tobacco companies have been able to pool resources and cut costs by merging in recent years. The latest big deal was last summer’s US$27 billion (£17 billion) acquisition of Lorillard, America’s third-biggest player, by R.J. Reynolds, the second-biggest.
Widespread bans on tobacco advertising have also had the perverse effect of helping tobacco companies to boost their margins – because they no longer have to spend so much on marketing.