Plain cigarette packaging case adjourned in High Court

A distributor of a number of well-known tobacco brands has argued before the Commercial Court that Ireland, as a member of the EU, cannot unilaterally introduce plain packaging on its products.

JTI Ireland Ltd claims, to do so, would be contrary to EU harmonisation objectives and amount to an obstacle to trade between member states.

The new rules, due to come in next month, will distort and impair the dynamics of competition in the tobacco market, JTI claims. The rules would dramatically reduce the ability of consumers to engage in “informed switching” and were likely to lead to a fall in the average price of tobacco products as a whole, it is claimed.

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

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 tobacco products including 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 in Ireland. The company also says it paid €666.8million in tax here in 2013.

Mr Justice Brian McGovern granted an application by Paul Sreenan SC, for JTI, to adjourn for two weeks his side’s application to have the case fast-tracked in the Commercial Court. The defendants agreed to the adjournment.

In an affidavit, JTI Ireland general manager, Igor Dzaja, said 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 and the Minister and State do not have power or competence to derogate from the provisions of the directive, he said.

JTI contends, 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.

The Minister and State also cannot rely on the Treaty on the Functioning of the EU (TFEU) to commence the new law on May 20th, he said. This could apply only where new provisions are based on new scientific evidence relating to the protection of the environment on grounds specific to the member state after the adoption of a harmonisation measure, he said.

The new law will undermine the harmonisation objective of the 2014 directive and will inevitably mean standardised packaging provisions in other member states will not be available for import to Ireland, he said. This was a restriction on trade contrary to the TFEU.

Last November, the High Court of England and Wales separately referred to the EU Court of Justice the validity of the 2014 EU directive in a case brought by the Philip Morris tobacco company against the UK Health Secretary. JTI said it had asked the State defendants not to take any steps to enact the new law pending the outcome of that case but this was refused.

JTI said it reserves its right to challenge the substantive measures of the 2015 plain packaging law on grounds including it constitutes an unlawful infringement of its intellectual and other property rights and its right to freedom of expression, Mr Dzaja added.