Poland says NO to the Tobacco Directive. Who’s next?


Losses for the State budget, massive job cuts, stimulation of criminality – everything in the name of health objectives, which, in fact, shall not be reached. These are the reasons why the Tobacco Directive continues to be challenged, even after its enactment. Recently, the Polish Government has decided to file an action against the Directive with the Court of Justice of the European Union, challenging the article regarding the ban of menthol cigarettes. Poland continues thus to maintain its definite position against the new regulations, publicly expressed since the Directive was only a draft. The Polish State was not a single voice at the time, as many other European countries, including Romania, have expressed positions which were different from the proposal of the Commission.

 

We are actually talking about a country where menthol cigarettes are manufactured and consumed since 1953, so the authorities are entitled to believe that they should be treated as traditional products, estimating serious economic consequences as a result of the enforcement of the new Tobacco Directive. “These restrictions (related to the ban of the sale of menthol cigarettes) affect a specific group of producers, and at the same time they will redirect consumption towards other products, which are not manufactured by the Polish tobacco industry,” said Poland’s Deputy Prime Minister and Minister for the Economy Janusz Piechocinski.

Poland is one of the most important European tobacco manufacturers. In justification of the compliant, Poland argues that menthol cigarettes are produced by six factories. Approximately 70 per cent of manufactured goods are exported, of which 50 per cent are exported to the markets of the EU Member States.

Even since it was only a draft, the revised Directive has encountered a firm opposition from several Member States, such as Romania, Poland, Spain, Czech Republic, Bulgaria, Germany, Italy. The authorities in the above-mentioned countries have claimed job cuts and significant revenue losses for the State budget. In Romania, the tobacco industry is the second largest taxpayer, after the companies acting in the oil sector. In 2013, the tobacco companies have paid to the State budget over EUR 2.6 billion, representing excise duties, VAT, fees and contributions.

 

In their turn, the tobacco manufacturers support the standpoint of the Polish Government. ‘Andrzej Lewandowski, Corporate Affairs and Communications Director in JTI Poland, emphasizes that the Directive has been negotiated hastily and was pushed by political agendas – appropriate analyses of effectiveness of the numerous measures and their costs have not been conducted – says JTI representative’.

 

It is not the only action against the Directive to be settled by the European Court of Justice. The Philip Morris office has initiated a legal action whereby it requests the analysis of the Directive by the European Court of Justice. In its turn, the Japan Tobacco International branch in the UK has announced that it rallies with such action. The petition was filed with the High Court in the UK, as the British justice has proven its rapidity and efficiency in matters related to the Community laws.

According to the submitted appeals, the ban on menthol and the limitations on pack sizes and shapes are unlawful and do not contribute to improve the internal market of tobacco products in the EU.

Furthermore, the challengers consider that The EU Parliament had no competence to legislate on the topics covered by the TPD2. The tobacco manufacturers claim that the Directive TPD2 will have a large negative impact on numerous legitimate businesses across the EU without achieving the intended benefits that law-makers have claimed. These regulations are the result of a flawed process, which ignored the basic principles of the EU.

The increase of the warnings size shall make the packaging easier to be forged, and the banned products shall be available on the black market. Annually, cigarette smuggling deprives the Member States of the European Union from approximately EUR 11 billion. In Romania, smuggling was situated in May 2014 at 16.1% of the total cigarette market, for the first time during the past five year registering a continuous increase for six months.

The two tobacco manufacturers are waiting for the dispute to be sent by the UK High Court for settlement by the European Court of Justice.

The new regulations provided for by the Tobacco Directive are scheduled to become enforceable in May 2016. In case the European Court of Justice shall accept the filed actions as solidly grounded, the contested articles (regarding the ban of flavoured cigarettes, the form of the packs and the increase of the warnings size) shall become again the subject of debates by the European bodies.

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