Irish tobacco company PJ Carroll has received an adverse opinion from the European Court of Justice regarding a legal challenge over heated tobacco products (HTPs).
The opinion by an Advocate General of the court has found that the European Commission was within its rights in banning flavoured HTPs under the Tobacco Products Directive, which entered into force in 2014.
HTPs heat tobacco at a lower temperature compared to conventional cigarettes.
When the tobacco is heated it produces an aerosol or smoke which contains nicotine.
In 2022, the European Commission updated the 2014 directive to include flavoured HTPs, meaning they would be prohibited for sale in the European Union, and would be subject to labelling requirements.
The following year, Ireland transposed the update - known as a delegated directive - into Irish law.
However, the move was challenged by PJ Carroll & Company Ltd and Nicoventures Trading Ltd, who argued that the European Commission had exceeded its powers in banning HTPs.
The companies sued the Minister for Health and the Attorney General in the High Court, and the case was referred to the European Court of Justice.
In particular, PJ Carroll argued that the Commission was not entitled to update the Tobacco Products Directive to enforce a prohibition of flavoured HTPs.
Furthermore, the company argued that the basis on which the Commission had updated the Directive to include flavoured HTPs - ie, that a significant change of circumstances had transpired - was invalid.
The case revolves around Articles 7 and 11 of the original directive.
Article 7 prohibits cigarettes and roll-your-own tobacco with a characterising flavour, as well as their flavoured components.
Article 11 sets out mandatory labelling obligations for cigarettes, roll-your-own tobacco and waterpipe tobacco.
According to a statement by the ECJ, the Tobacco Products Directive empowers the Commission to extend the scope of Articles 7 and 11 to new product categories if the Commission can demonstrate a substantial change of circumstances.
Under the directive, this is defined as "significant increases in sales or youth consumption across multiple member states", provided the product category exceeds 2.5% of total tobacco sales at the EU level.
The directive also mandates the Commission to monitor developments related to novel tobacco products and assess whether amendments to the directive might be required.
Following the referral by the Irish High Court, the ECJ was asked whether the updated directive 2022 was invalid because it exceeded the powers granted to the Commission under Articles 7 and 11, and in light of the Lisbon Treaty which grants the Commission power to update or amend legislation.
'Substantial change of circumstances'
The ECJ was also asked if the update was similarly invalid because the Commission was not entitled to conclude that there had been "a substantial change of circumstances".
PJ Carroll had argued that the Commission misinterpreted the criterion related to what a substantial change of circumstances might be.
Today, Advocate General Nicholas Emiliou held that the Commission was within its rights to update the directive to include flavoured HTPs.
He also suggested the Commission had acted within the law in concluding that a "substantial change of circumstances" existed with the introduction of flavoured HTPs.
The Advocate General also said the Commission was entitled, under Article 290 of the Lisbon Treaty, to amend non-essential elements of a legislative act.
By contrast, "essential" elements - which case law establishes as those requiring political choices - must not be amended.
Mr Emiliou argued that the updated directive of 2022 "did not alter the key political decisions of the Tobacco Products Directive", therefore the Commission did not breach Article 290.
Furthermore, the Advocate General found that the Commission had the authority to create new "particular categories" of tobacco products whose exemption from the directive could be withdrawn, including "novel" products.
He found that both Articles 7 and 11 of the original directive provided the Commission with flexibility in defining new categories of tobacco product, without altering the directive's core groups, so long as the flexibility aligned with the directive’s objectives.
The Advocate General rejected the company’s claim that in applying the directive's general rules to novel tobacco products, the Commission was in conflict with the directive’s special regime for such products.
'Wait and see' approach
He also said a "wait and see" approach would contradict the precautionary principle, which allows for swift health protection measures, even in the face of uncertainties.
The Advocate General stressed that the directive was designed to protect public health, particularly for young people, and ensure a harmonised internal market.
Allowing exemptions for heated tobacco products with increasing youth consumption could undermine its objectives, he said.
Mr Emiliou also said that the Commission was correct in assessing that there was a "substantial change in circumstances" for heated tobacco products based on units sold, rather than weight.
PJ Carroll’s lawyers had argued that using weight would be a better measure of quantity of tobacco involved, as opposed to units.
However, the Advocate General disagreed, saying that the Tobacco Products Directive did not prescribe how sales volumes should be measured, only that data must be reported by manufacturers as units or weight.
He noted that PJ Carroll had itself historically reported sales on a units sold basis.
The full judgement will come later. In roughly 80% of cases, the judgement concurs with the earlier opinion of the Advocate General.
