Select Committee on European Scrutiny Twenty-Fifth and Twenty-Sixth Report


COM(01) 283

Draft Council Directive on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products.

Legal base:Articles 47(2), 55 and 95 EC; co-decision; qualified majority voting
Basis of consideration: Minister's letter of 8 April 2002
Previous Committee Report: HC 152-iv (2001-02), paragraph 2 (7 November 2001)
To be discussed in Council: See paragraph 3.11 below
Committee's assessment:Legally and politically important
Committee's decision:Not cleared; further information requested


  3.1  Although the Community adopted in 1989 a measure to prohibit the television advertising of tobacco products, proposals for a wider ban on such advertising have been on the table, in one form or another, since 1991. For a number of years, no progress was made, partly because the Council Legal Service had taken the view in December 1993 that such a measure could not be based, as had been proposed, on Article 100a of the EC Treaty (now Article 95 EC). However, in the summer of 1997, the then Presidency produced an amended text,[5] which subsequently became the subject of considerable controversy, largely because of the exemptions proposed for certain sporting events, and in particular Formula One motor racing. However, important issues also arose over the correct legal base. Although the Commission Legal Service regarded the use of Article 100a as legitimate, the Council Legal Service continued to maintain that this Article could not be used because the proposal covered purely domestic situations, not the generality of the internal market, and was designed to protect health. The Council Legal Service was also concerned that the ban would apply without distinction to advertising material imported from other Member States, and to that intended for local domestic markets (and even more locally), and went beyond what was necessary for the establishment and functioning of the internal market.

  3.2  In November 1997, our predecessors were told that the Council Legal Service no longer opposed the proposal on the grounds of legal base, and Council Directive 98/43/EC was adopted on 6 July 1998. The Directive — which was based on Articles 57(2), 66 and 100a of the Treaty — introduced a general ban on all forms of advertising and sponsorship of tobacco products in the Community, subject to certain exemptions[6], with Member States being required to bring it into force by 31 July 2001. However, they were also able to defer the ban by one year in respect of the press and two years in respect of sponsorship; and "in exceptional cases and for duly justified reasons", intended to cover activities such as Formula One, they were also allowed to continue to authorise the existing sponsorship of events "organised at world level" for a further period of three years ending not later than 1 October 2006.

  3.3  The measure was subsequently challenged by Germany in the European Court of Justice, and, in a judgement of 5 October 2000,[7] the Court annulled the Directive on the grounds that Article 100a (now Article 95) did not provide an appropriate legal base. It found that the Directive as a whole neither sought to eliminate obstacles to the free movement of goods and the freedom to provide services, nor to eliminate distortions of competition. It further found that, in view of this, Article 95 could not be used to circumvent the express exclusion of harmonisation in relation to human health contained in Article 152(4)(c).

  3.4  On 30 May 2001, the Commission brought forward the current proposal, which is still based on the same Articles of the Treaty (now 47(2), 55 and 95), but which the Commission said takes "due account" of the European Court's ruling. The justification for the measure was similar to that for the earlier proposals, namely the need to curb tobacco advertising in order to protect health, and for this to be done across the Community to the extent necessary for the completion of the internal market. More specifically, the proposal would require Member States to bring in laws which would prohibit:

  • advertising of tobacco products in the press and other printed publications, other than that limited to publications intended exclusively for professionals in the tobacco trade and to those published and printed in third countries which are not principally intended for the Community market: this provision would also apply to internet advertising;

  • all forms of radio advertising of tobacco products, including sponsorship by companies manufacturing or selling tobacco products;

  • the sponsorship of events or activities involving or taking place in several Member States, or otherwise having cross-border effects; and

  • the free distribution of tobacco products in the context of such events.

    In all cases, including (it would seem) sponsorship at events such as Formula One, these provisions would need to be in place by 31 July 2005. However, the Commission would review the action taken no later than five years after the Directive enters into force.

  3.5  In her Explanatory Memorandum of 18 July 2001, the Parliamentary Under- Secretary of State for Health at the Department of Health (Yvette Cooper) said that action at European level in this area formed a key plank of the White Paper "Smoking kills" published in December 1998, and that the UK was in favour of this proposal. She also identified sponsorship as an area of concern, and said that the UK would be looking to maintain its existing policy in this area, and would therefore be pressing for exceptional global events, such as Formula One, to be allowed to retain tobacco sponsorship for a "short transitional period up to 2006", in order to find time to identify alternative sponsors. The Minister also said that the Government was re-drafting the Regulatory Impact Assessments it prepared for the previous Directive so as to reflect the less comprehensive nature of the present proposal.

  3.6  In our Report of 7 November 2001, we noted that, notwithstanding the promise of a revised Regulatory Impact Assessment, we found the remainder of the Minister's Explanatory Memorandum surprisingly uninformative, given the background to this proposal. Consequently, we said that, when she supplied her amended Assessment, we would also like her to identify clearly those changes which the Commission had made in response to the ruling of the European Court; to say whether, in the Government's view, those changes were consistent with that ruling; and to indicate what view was taken on this last point by the Council Legal Services.

Minister's letter of 8 April 2002

  3.7  In her letter of 8 April 2002, the Minister has sought to address these points, and she also enclosed with her letter a copy of the consultation document issued by her Department last summer, which includes an assessment of the likely costs and benefits of the proposal.

  3.8  Not surprisingly, the latter identifies the reduced health risks as the main benefit of the proposal, resulting from the consequential fall in tobacco consumption, which is estimated over time at about 2.5 percent. It suggests that this would lead in the short term to a reduction of around 1500 premature deaths, rising later towards a figure of 3000 fewer premature deaths. This would be accompanied by a saving of between £20 million and £40 million in the NHS budget in England, with further proportionate savings in Scotland, Wales and Northern Ireland. The costs would fall on tobacco manufacturers whose annual turnover might fall by £300 million, with a £20 million fall in profitability; on the advertising industry, whose turnover (assuming its efforts were not re-directed to other areas) might fall by £50 million; and on independent retailers (for whom tobacco is often the product which draws consumers into their shop). In addition, the Exchequer would lose tax revenue, perhaps amounting to £250 million a year, from any reduction in tobacco consumption.

  3.9  On the three points we raised in our previous Report, the Minister says that the main changes made to the earlier proposal in the light of the European Court's ruling are the limiting of the proposal's scope from virtually all advertising and promotion to those kinds referred to in paragraph 3.4 above. She also says that the Government considers that the latter approach is consistent with the Court's ruling as the forms of advertising now covered could all have a cross-border impact, and deal with areas where differences between national regulations could give rise to appreciable distortions of competition. However, on our enquiry about the view taken by the Council Legal Services, the Minister says that such opinions are provided in confidence to the governments of the Member States, and that she is advised that there is no provision for disclosing them to us.


  3.10  Whilst we are grateful to the Minister for much of the further information she has supplied, we are surprised by her statement that she is unable to disclose the opinions of the Council Legal Services, since this appears to be at variance with the approach taken by the Government on other documents. In particular, we note from our predecessors' Reports of 30 July 1997[8] and 19 November 1997[9] that the then Minister of State for Public Health (Tessa Jowell) and her officials appeared to have no such inhibitions.

  3.11  In the light of the position taken by her department in 1997, we would be glad if the Minister could either re-consider the approach in her letter of 8 April 2002 or explain to us why that approach appears to have changed in the intervening period. At the same time, we would also find it helpful to know the stage reached in discussions in the Council on the current proposal.

5   (18530) -; see HC 155-vii (1997-98) (19 November 1997) and HC 1204, and Official Report, European Standing Committee B, 2 December 1997. Back

6   These included communications intended exclusively for professionals in the tobacco trade, the presentation of tobacco products offered for sale, advertising aimed at purchasers in establishments specialising in the sale of tobacco and on their shop-fronts, and the sale of publications containing advertising for tobacco products published and printed in third countries where these are not principally intended for the Community market. Back

7   Case C-376/98 Germany v. European Parliament and CouncilBack

8   (13015) 6748/91 and (13697) 6294/92; see HC 155-iii (1997-98), paragraphs 1.7 and 1.8 (30 July 1997). Back

9   (13015) 6748/91 and (13697) 6294/92; see HC 155-vii (1997-98), paragraph 15 and Oral Evidence Q.2 (19 November 1997). Back

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