On December 23, 2015, Advocate General Kokott of the European Court of Justice (ECJ) gave a preliminary opinion in which she validated the legality of the European Union’s (EU) Tobacco Products Directive 2014/40 (the Directive). In particular, the opinion upheld the validity of mandatory large pictorial warnings and optional plain packaging. Although the opinion of the Advocate General is not binding on the ECJ, it is quite influential and is a good indicator of what the ECJ could decide in the coming months.
The Tobacco Products Directive 2014/40
On April 3, 2014, after years of intense negotiations and aggressive tobacco industry lobbying, the EU adopted a new Directive, which sets rules for the regulation, manufacture, presentation and sale of tobacco products. Some of the central measures of the new Directive include mandatory text and pictorial health warnings covering 65% of both sides of cigarette packs (Article 10); mandatory cuboid shape of cigarette packs and minimum content of 20 cigarettes per unit packs (Article 14); and the possibility for EU Member States to adopt plain packaging measures (Article 24(2) and Recital 53 of the Directive’s Preamble).
These labeling and packaging measures are a response to the increasing use of cigarette packs as advertising and marketing tools by tobacco companies. Indeed, over the recent years, cigarette packs have been developing in a variety of attractive shapes and colors. In order to curb this trend, the Framework Convention on Tobacco Control (FCTC) and related Guidelines recommend the adoption of large pictorial health warnings and plain packaging measures (Articles 11 and 13). These measures help decrease the attractiveness of the packaging of tobacco products and contribute to the efforts to decrease smoking rates. The new EU Directive follows the recommendations of the FCTC and Guidelines.
Plain packaging measures consist in regulating the shape and colors of cigarette packs, as well as displaying the name of tobacco products’ brands in a prescribed font style and size. Such measures prohibit the use of logos and any other features making the package attractive. Plain packaging reduces the appeal of tobacco products, particularly to young people, and increases the visibility of health warnings. Although the new Directive does not require plain packaging at EU level, it expressly recognizes that EU Member States can adopt plain packaging measures at national level.
Other key measures of the Directive include the ban of characterizing flavors, (i.e. the use of additives with a specific smell or taste, such as fruit or menthol), and the regulation of e-cigarettes (Articles 7 and 20).
Soon after the adoption of the Directive, several tobacco companies challenged its legality in three separate cases. In case C547/14, Philip Morris and British American Tobacco (BAT) challenged the legality of the Directive as a whole, including the provisions on packaging and labeling. The two other cases challenged the regulation of electronic cigarettes (Case C477/14) and the prohibition of menthol cigarettes (Case C358/14). The Advocate General delivered her opinion on the three cases.
This blog post only focuses on the challenges to the validity of the packaging and labeling measures raised in case C547/14. This post examines two key questions: first, whether the Directive’s packaging and labeling measures violate the principle of proportionality under EU law; Second, whether the Directive’s optional plain packaging measures are legal under EU law. This blog post does not address the parts of the opinion dealing with characterizing flavors, electronic cigarettes and EU-specific issues (see more here).
Legality of mandatory labeling and packaging requirements
Philip Morris and BAT claim that the mandatory cuboid shape, minimum pack size and large health warnings violate the principle of proportionality, particularly in the light of the freedom to conduct a business. They argue that these requirements are disproportionate.
Under EU law, the principle of proportionality requires that “acts of the EU institutions be appropriate for attaining the legitimate objectives pursued by the legislation at issue and do not go beyond what is necessary in order to achieve those objectives.” The EU has a broad margin of discretion and a measure violates the proportionality principle only when it is “manifestly disproportionate”, namely when it “manifestly” goes beyond what is necessary (§§146 and150 of the Opinion).
In the present case, Advocate General Kokott finds that the requirements regarding the shape and minimum content of cigarette packs make the health warnings more visible and the packets less attractive, particularly for adolescents and young adults (§§191-192 of the Opinion). Therefore in her view, these measures are proportionate, as the high level of health protection they offer outweighs tobacco companies’ commercial interests. She states that: “… (t)he purely economic interest in the greatest possible inter-product and inter-brand competition must be secondary to the protection of human health, which, as has already been stated, has considerably greater importance in the value system under EU law.” (§193 of the Opinion)
The Advocate General also finds the size of mandatory health warnings appropriate, necessary and proportionate. She emphasizes that the size of the health warnings is fully consistent with the international requirements of the FCTC and Guidelines, which require that health warnings cover at least 50% of the pack. She adds that the size of the warnings does not interfere with companies’ freedom to conduct a business and their intellectual property rights, as companies can still use one third of the pack to display product specific information and trademarks. Therefore, the Advocate General concludes that the Directive’s packaging and labeling measures are proportionate, as a high level of health protection prevails over economic considerations. (§§194-209 of the Opinion)
Legality of optional plain packaging
Philip Morris and BAT also challenge the validity of Article 24(2) of the Directive, which allows Member States to go beyond the requirements set by the Directive and to adopt plain packaging measures. The tobacco companies argue that Article 24(2) creates a possible barrier to trade within the EU internal market.
However the Advocate General dismisses this argument on the ground that the Directive only sets minimum standards, which provide “a first set of basic common rules” (§111 of the Opinion). She explains that since the harmonization of packaging rules is only partial, the Directive can lawfully give Member States the option to go beyond the Directive’s minimum requirements and to adopt plain packaging measures at national level. Therefore, Advocate General Kokott concludes that article 24(2) of the Directive is valid. (See §§105-120 of the Opinion)
The ECJ will give its judgment in the coming months. If the ECJ follows the opinion of the Advocate General, it will be a great victory for tobacco control in the EU. The upcoming decision of the ECJ will be particularly crucial for the future of plain packaging in the EU. Several Member States (Ireland, UK, France) have already passed plain packaging legislation. In fact, a legal challenge against the Irish plain packaging legislation is pending and the outcome of this challenge will depend on the ECJ’s decision. Although more legal battles are to be expected, the decision of the ECJ to support the legality of these measures would certainly make tobacco companies lose grounds in their desperate fight against large pictorial warnings and plain packaging, both at EU level and beyond.