State wants tobacco packaging challenge referred to EU court

The State wants to have a legal challenge brought against its plan to introduce plain packaging on tobacco products referred to the Court of Justice of the European Union, the Commercial Court has heard.

JTI Ireland Ltd has challenged the Government's plan to bring in plain packaging claiming it cannot unilaterally introduce it on its products as a member of the EU.

In proceedings before the Commercial Court JTI is seeking orders preventing the Minister for Health, Ireland and the Attorney General from commencing the provisions of the recently passed Public Health (Standardised Packaging of Tobacco) Act 2015.

JTI Ireland Ltd claims the State’s action is contrary to EU harmonisation objectives and an obstacle to trade between member states.

JTI also claims the standardised packaging law imposes stricter rules than those necessary to transpose a 2014 EU directive (2014/40/EU). The stated objective of the directive is to harmonise labelling and packaging.

The matter came before Mr Justice Brian McGovern today, who following an application by Paul Sreenan SC for JTI, agreed to admit the case to the fast-track Commercial Court division. The application was on consent.

Michael Cush SC for the State parties told the court it is his client’s intention to apply to the Commercial Court to have certain legal questions arising out of JTI’s action referred to the Luxembourg based Court of Justice of the EU.

Counsel made reference to the High Court of England and Wales decision to refer questions concerning the validity of the 2014 EU directive in a case brought by the Philip Morris tobacco company and British American against the UK Health Secretary to the European Courts.

Counsel said similar issues have been raised in that case to those being advanced in JTI’s proceedings, and it was hoped the Irish case could travel together with the British case.

In its action JTI says the Minister and the State do not have the power or competence to derogate from the provisions of the directive.

This is because harmonisation of labelling and packaging is a stated objective of the EU directive, a member state cannot adopt national measures which further restrict the free movement of goods on grounds of a high level of protection for human health.

JTI also claims the new rules, due to be introduced in May, will distort and impair the dynamics of competition in the tobacco market.

In its action JTI claims the law means all tobacco products must come in standard plain paper packaging. JTI supplies 3,100 retailers with brands including Benson and Hedges, Silk Cut, Camel, Hamlet cigars, roll-your-own like Amber Leaf and Old Holborn, and pipe tobacco.

It is part of an international tobacco group with operations in 70 countries and employs 90 people directly in Ireland. It says it paid €666.8million in tax here in 2013.

Mr Justice McGovern agreed to adjourn the matter for two weeks, to allow the State bring an application to have the case referred to the European Courts.