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France loses more money from tobacco and alcohol use than it gains in taxes, new report says

A man drinks a beer at a cafe terrace in Toulouse, southwestern France, 11 May 2023.
A man drinks a beer at a cafe terrace in Toulouse, southwestern France, 11 May 2023. Copyright Charly TRIBALLEAU / AFP
Copyright Charly TRIBALLEAU / AFP
By Euronews with AFP
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A new report has found that the cost to public finances related to alcohol and tobacco use exceeds any money the state gains from taxes on those products.

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France’s government loses more money due to lives lost and prevention spending on alcohol and tobacco use than it gains from taxes on those products, according to a new report.

The idea that legal drugs, tobacco and alcohol, benefit the state is therefore "unfounded,” the analysis from France’s Observatory of Drugs and Addiction Trends (OFDT) said.

The report analysed data from 2019 in an attempt to determine the impact of the problem on the country.

Tobacco smoking caused more than 73,000 deaths in 2019 and alcohol consumption caused more than 41,000 deaths, according to the report.

It estimated the “social cost” to the state as amounting to €156 billion for tobacco smoking and €102 billion for alcohol. The cost to the state of illicit drug use amounted to €7.7 billion.

This estimate takes into account the economic value of lives lost due to drug use, the loss of quality of life for patients with cancers caused by tobacco and alcohol use as well as state spending on prevention and care.

The savings on pensions for those who lose their lives due to drugs, alcohol and tobacco use was deducted from the social cost estimate.

“This new estimate confirms that the social cost of drugs remains much higher than induced tax revenue,” the report concluded.

The French government received €4 billion and €13 billion respectively from the taxes on alcohol and tobacco.

That is also lower than the cost to the government of treatments for alcohol and tobacco abuse.

"The idea that drugs like tobacco and alcohol would bring benefits to the state is therefore completely unfounded," said Pierre Kopp, a professor of economics at the University of Paris 1 Panthéon Sorbonne, who wrote the report.

"Drugs impoverish the community,” he added.

The report noted however that the drop in the number of deaths caused by alcohol, tobacco and illicit drugs between 2010 and 2019 shows that public policies have made it possible to "significantly reduce tobacco consumption, improve care for illicit drug users and, more modestly, increase awareness of the dangers of alcohol".

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