Against the jurisprudence of the European Court of Justice (ECJ), the European Commission has decided to take action against Ireland which imposes a minimum retail prices for cigarettes. It highlights the contradiction between EU policies on competition and health protection objectives.
The European Commission considers that such prices infringe Community law and distort competition and benefit only manufacturers.
If there is no satisfactory response to the reasoned opinion within two months, the Commission may bring the matter before the Court of Justice.
It should be noted that it is well established that price and tax measure are effective means to reduce tobacco consumption.
Background
Excise duties are indirect taxes on the consumption or the use of certain products.
The minimum rates of duty that Member States have to respect are imposed by EU legislation although the revenue from excise of duties benefits entirely to the Member States.
In this respect the European Court of Justice has already ruled that:
– Imposing a minimum price is incompatible with the current legal framework ( Directive 95/59/EC) since it limits the freedom of producers and importers to determine their selling prices. (Case C-302/00 – European Commission Vs France)
-Minimum prices are not necessary since the health objectives can be achieved by increasing taxation of tobacco products. (Case C-216/98 – European Commission Vs Greece)
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For further information:
– Fixing Cigarette Prices – France and Belgium Tackled
– European Commission DG on taxation
– [
ECJ rules on alcohol excise duties->http://www.epha.org/a/2475]