EU Court Says Minimum Cigarette Price Unlawful

The Court of Justice of the European Union has found Ireland's legislation on minimum price fixing for cigarettes contravenes EU law.

The court found that similar laws in Austria and France were also in violation of a European Directive, which has rules on excise duty affecting the consumption of tobacco products.

The Court said imposing a minimum price on cigarettes can undermine competition by preventing some manufacturers taking advantage of lower cost manufacturing prices, so as to offer more attractive retail selling prices.

Although the Court admitted the policy of minimum price fixing ensured health protection, today's ruling did not prevent member states from combating smoking.

In a statement released this morning, the court said: "A system of minimum retail selling prices for tobacco products cannot be regarded as compatible (with EU law) unless it (ensures) the competitive advantage ... for some manufacturers and importers of those products from lower cost prices is not impaired.

"The directive does not preclude a pricing policy provided that it does not run counter to the directive’s objectives.”

The court further said that EU member countries could increase tobacco taxes in an effort to curtail smoking “without undermining the freedom to determine prices.”

It said Ireland, which seeks to discourage smoking by pushing up the price of cigarettes, is still free to impose heavy taxes on tobacco.

France and Austria were also found guilty of infringing EU law.

(DW)