Irish tobacco pricing illegal
The European Advocate General has advised the European Commission to proceed with its action against Ireland for minimum tobacco pricing
15 November 2009
The European Advocate General released an opinion on 22 October stating that the European Commission should proceed with its action against Ireland for setting minimum prices on tobacco products.
The Commission wrote to Ireland in 2002 saying that it was not in compliance with Article 9(1) of Directive 95/59, which allows tobacco manufacturers to set their own maximum prices for tax purposes. According to the Commission, Ireland’s minimum price law prevents this, and also poses a risk to free competition.
In addition, it says the country failed to meet its legal obligation to cooperate with the EU institution in its compliance investigation, by failing to respond to its letters and supply requested information.
The Irish government, in particular the Department of Health and Children (DoHC) which is responsible for the tobacco law, has strongly defended its position. It argues that the regulation complies with the WHO Framework Convention on Tobacco Control, which was approved by the EU, as well as the EU’s own initiatives on the prevention of smoking. The Advocate General dismisses the points however, stating that tax and not price should be used for this purpose.
The DoHC said: “It would be inappropriate to comment,” before the actual ECJ judgement is given next March. It is thought highly likely however, that the Court will follow the interim opinion, in which case Ireland will be instructed to pay all legal costs.
Commenting, corporate affairs manager of John Player and Sons, Deirdre Healy said: “We don’t disagree with the commission,” but the tobacco group is also waiting to hear the final outcome next March before making any decisions.
“In 80% of cases the judgement follows the opinion but that means in 20% of cases it doesn’t. So you never know, we have to wait and see,” said Healy.