5 The manufacture, presentation and sale
of tobacco and related products ~
| (34587)
18068/12
+ ADDS 1-7
COM(12) 788
| Draft Directive of the European Parliament and of the Council on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products
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| Legal base | Article 114 TFEU; co-decision; QMV
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| Department | Health
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| Basis of consideration | Minister's letters of 3 and 11 June 2013
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| Previous Committee Report | HC 86-xxx (2012-13), chapter 3 (30 January 2013)
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| Discussion in Council | No date set
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| Committee's assessment | Legally and politically important
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| Committee's decision | Not cleared; further information requested
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Background and previous scrutiny
5.1 It has long been recognised that the global nature of trade
in tobacco products has significant cross-border effects which
extend beyond the economic sphere. As awareness of the health
implications of smoking has grown, so too has the desire to regulate
trade in a way that ensures consumers are informed of the health
risks and those most susceptible to innovative marketing techniques
(notably children) are better protected. Within the EU, the differing
regulatory approaches taken by Member States were perceived as
an impediment to the functioning of the internal market and, in
1989, the first EU legislation regulating the labelling of tobacco
products was introduced. It has since been strengthened to include
detailed rules on the size and content of health warnings and
to prohibit marketing practices intended to make tobacco products
more appealing or to suggest that they are less harmful than other
similar products.
5.2 The current regulatory framework (the 2001 Tobacco
Products Directive) has been in force for more than a decade and
has been supplemented by a World Health Organisation Framework
Convention on Tobacco Control which entered into force in 2005.
The Commission considers that scientific, market and international
developments necessitate substantial changes to the existing EU
framework and so has proposed a new and more comprehensive Directive.
As with previous EU Directives, it is an internal market measure
based on Article 114 of the Treaty on the Functioning of the European
Union (TFEU) and (as required by that Article) takes as its base
a high level of public health protection. It focuses, in particular,
on measures to discourage tobacco consumption by young people,
in light of Commission estimates that 70% of smokers start before
the age of 18.
5.3 Some elements of the 2001 Directive, such as
the maximum tar, nicotine and carbon monoxide content of cigarettes,
remain unchanged but many of the existing provisions are strengthened.
For example, health warnings on cigarette packets and packaging
for roll-your-own tobacco are to be made larger (covering 75%
of both the outer front and back surfaces) and to include a text
warning and a colour photograph, and there are further restrictions
on any additional product information or labelling.
5.4 New elements in the draft Directive include:
a prohibition on the use of "characterising flavours"
(such as chocolate or menthol) which may increase the appeal for
children; a prohibition on the use of a variety of additives which
suggest health or energy-giving properties; a new notification
procedure for "novel tobacco products" before they are
introduced to the market for the first time; and new restrictions
and labelling requirements for non-tobacco products which may
have addictive qualities or health implications, such as nicotine-containing
products and herbal cigarettes. The draft Directive also introduces
a new tracking and tracing system for tobacco products covering
the whole supply chain (but excluding the retail stage). Our
Thirtieth Report of Session 2012-13, agreed on 30 January 2013,
provides a detailed overview of the draft Directive.
5.5 The Parliamentary Under-Secretary of State for
Public Health (Anna Soubry) told us that the Government broadly
welcomed the draft Directive and supported its focus on reducing
the appeal of tobacco products for children and young people.
She indicated, however, that many of the changes proposed by
the Commission would require further detailed examination and
highlighted, in particular, research being undertaken by the UK's
Medicines and Healthcare products Regulatory Agency (MHRA) on
the levels of nicotine that have physiological effects, as well
as the Government's consultation on the possible introduction
of standardised packaging for tobacco products. She also undertook
to provide a more comprehensive assessment of the expected costs
and benefits of the draft Directive for the UK.
5.6 Whilst recognising the need for Government to
carry out a thorough analysis of the evidence base for EU action,
we also noted that the intention of the Irish Presidency to secure
a political agreement within the Council by the end of June would
affect the time available for scrutiny. We asked the Minister
whether she accepted that Article 114 was an appropriate legal
base, given the public health objectives of the draft Directive,
and whether any specific provisions raised subsidiarity concerns.
We also asked her to clarify the Government's position on those
elements of the draft Directive which would introduce new or more
stringent requirements than those contained in the 2001 Tobacco
Products Directive.
The Minister's letter of 3 June 2013
5.7 The Minister (Anna Soubry) apologises for the
delay in providing the information requested by the Committee,
adding that it has taken some time to secure cross-Government
clearance of the UK's negotiating position. She confirms that
the Irish Presidency still intends to seek a general approach
on the draft Directive by the end of June and that the European
Parliament is considering its position in parallel.
Legal base and subsidiarity
5.8 Turning first to the legal base, the Minister
notes that internal market measures based on Article 114 TFEU
are an area of shared competence and that the Court of Justice
has made clear that, in selecting this legal base, health protection
may be a decisive factor. She continues:
"I consider that the proposal is within
scope of the stated legal base, bearing in mind the nature of
the internal market in tobacco and related products, the diversity
of legislative regimes across the Member States and existing harmonised
rules in this area."
5.9 The Minister also considers that the draft Directive
respects the principle of subsidiarity, but adds:
"I aim to negotiate a final text which would
allow Member States adequate freedom to maintain or take forward
certain domestic public health policies, aiming for a higher level
of health protection, where the evidence supports this and it
is justified in accordance with the TFEU.
"For example, the proposal for a revised
EU Directive sets out provisions on packaging of tobacco but does
not require fully standardised packaging. However, the UK has
run a consultation in relation to the introduction of standardised
packaging for tobacco products in the UK. A decision is yet to
be reached on this and as such, the Government seeks to preserve
the option of taking domestic action to strengthen tobacco control
in the future. In another example, while pictorial health warnings
are currently required on the packaging of all smoked tobacco
products available on the UK market, the proposed Directive envisages
an exemption for certain types of tobacco (such as cigars). I
will, therefore, seek amendments to the proposed Directive to
enable the UK to maintain the requirements for pictorial health
warnings on all smoked tobacco products."
Analysis of new or more stringent regulatory requirements
5.10 The Minister identifies the areas in which the
Commission is seeking to introduce new or more stringent regulatory
requirements. These are: ingredients and emissions; labelling
and packaging of tobacco products; traceability and security features;
cross-border distance sales; novel tobacco products; (non-tobacco)
nicotine-containing products; and herbal products for smoking.
She highlights the UK's role as "a European and global leader
in tobacco control" as well as developments at international
level which necessitate more effective action to control the prevalence
and use of tobacco:
"Successive Governments have demonstrated
a commitment to improving public health through introducing effective
tobacco control policies. A wide range of measures have contributed
to our long-term success, including legislation from the EU (such
as the previous Tobacco Products Directive, dating from 2001,
henceforward to be referred to as 'the 2001 Directive'). Over
the past decade, complementary domestic and EU legislation has
contributed to declines in smoking prevalence by both adults and
young people in the UK.
"Tobacco use is one of our greatest public
health challenges and a major cause of health inequalities. Smoking-related
diseases kill one in two long-term smokers and treating smoking-related
diseases costs the NHS £2.7bn per annum in England alone.
Although smoking rates have fallen considerably since the 1960s,
over 8 million people in England still smoke, and the decline
in smoking rates in England has lost momentum in recent years.
It is clear that we need to do more to tackle tobacco use if
we are to achieve our public health ambitions.
"The UK is a Party to the World Health Organization's
Framework Convention on Tobacco Control (FCTC). The FCTC is the
world's first public health treaty and places obligations on Parties
to meet the treaty objective to 'reduce continually and substantially
the prevalence of tobacco use and exposure to tobacco smoke' and
to implement comprehensive tobacco control strategies. Since
the UK became a Party to the treaty in 2004, we have taken our
FCTC treaty obligations very seriously. All Member States are
Parties to the FCTC and the proposal will assist Member States
to meet a number of the treaty obligations set out in the FCTC."
Ingredients and emissions
5.11 The Minister supports the Commission's proposal
to prohibit the use of characterising flavours, such as menthol
or chocolate, vitamins and colourings, stimulants (such as caffeine
or taurine), and other additives which appreciably increase toxicity
or addictiveness, adding that it is in line with FCTC implementation
guidelines. She also supports the move towards electronic reporting
of ingredients and emissions used in tobacco products, as well
as wider dissemination of market research and other studies indicating
consumer preferences for particular ingredients and data on the
volume of sales, adding:
"By collecting this information, Member
States and the Commission will have a more comprehensive understanding
of the tobacco market, which can inform public health policy making."
5.12 However, she also underlines the need to ensure
that more extensive reporting requirements do not place disproportionate
burdens on Member States.
5.13 The Minister suggests that the current requirement
to display tar, nicotine and carbon monoxide yields on cigarette
packets is misleading, adding:
"[...] some smokers use the yield information
to compare the harmfulness of different brands of cigarettes.
However, we know that smoking of any brand of cigarette is harmful
to health because most of the health problems are caused by toxins
and carcinogens within tobacco smoke."
5.14 She therefore supports the Commission's proposal
to replace yield data with "a more informative and qualitative
information message that tobacco smoke contains more than 70 substances
causing cancer" and says that the Government's Tobacco
Control Plan for England, published in 2011, includes a recommendation
on the removal of yield data on tar, nicotine and carbon monoxide.
Health warnings, labelling and packaging
5.15 The Minister endorses the mandatory use of combined
picture and text health warnings on tobacco for sale across the
EU, adding:
"Under the 2001 Directive, Member States
have the option to require combined health warnings on the back
of packs of smoked tobacco. We have already legislated to require
combined health warnings for all smoked tobacco on the UK market."
5.16 She continues:
"According to the Bulletin of the World
Health Organization, health warnings on tobacco products constitute
the most cost-effective tool for educating smokers and non-smokers
alike about the health risks of tobacco use. Research has demonstrated
the superiority of using pictures and imagery over text-only messages
in health communication. In the UK, health warnings on tobacco
products are an essential element of our comprehensive tobacco
control strategy. They are a requirement of the FCTC."
5.17 The Minister notes that a Court of Justice ruling
in 2002 confirmed that the requirement for health warnings set
out in the 2001 Directive was consistent with the principle of
proportionality and with tobacco manufacturers' intellectual property
rights, but says that the Commission's latest proposal would only
require larger combined warnings for cigarettes and roll-your-own
tobacco packs. The less stringent health warning and labelling
requirements set out in the 2001 Directive would continue to apply
to other tobacco products. She adds:
"The UK legislation that has been in place
since 2008 requires combined warnings on the packaging of all
smoked tobacco (including cigars), not just cigarettes and roll-your-own
tobacco. I believe it would be an unnecessary and regressive
step to exempt these other smoked tobacco products from combined
warnings in the UK. The Government will seek a final text which
allows Member States the option to require picture warnings for
all smoked tobacco, so we can maintain our current requirements."
5.18 The Minister agrees that health warnings should
be larger and more prominent, adding:
"According to a recent review of the evidence
of tobacco health warnings, the salience of health warnings depends
upon the size and position of the warning message. Youth and adults
are more likely to recall larger warnings, rate larger warnings
as having greater impact and often equate the size of the warning
with the magnitude of the risk. The risks to health from smoking
(for the smoker and others because of second-hand smoke) are significant.
The Government's negotiating position on proposals for health
warnings will seek to optimise the effectiveness of warnings to
impart information about the risks of smoking, in light of the
evidence.
"Under the 2001 Directive, Member States
are able to increase the size of health warnings as long as minimum
requirements are met. The proposed Directive would in practice
make it difficult for Member States to do this in the future.
I will seek a final text which retains this Member State discretion,
respecting the principle of subsidiarity."
5.19 The Minister raises no specific objections to
the provisions on packaging and pack size, but says:
"The UK Government's negotiating position
on some of the packaging and product description provisions will
be balanced by our domestic policy consideration of tobacco packaging."
Tracking and tracing
5.20 The Minister suggests that the Commission's
proposals on the tracking and tracing of tobacco products are
similar to, but go further than, the provisions of a recently
adopted Protocol to the FCTC concerning illicit trade which the
UK is working towards signing. She continues:
"The Government believes that it would be
more appropriate and practical for tracking and tracing to be
addressed both through existing EU customs and excise directives
and through domestic action by Member States than through a revised
Tobacco Products Directive. If tracking and tracing remains in
this Directive we will explore with the Commission the advantages
to an EU wide system, taking into consideration the risks and
costs, to ensure that we introduce arrangements that are effective
and proportionate to the compliance burdens and economic impacts
on business."
Cross-border distance sales and new notification
procedures for novel tobacco products
5.21 The Minister supports the inclusion of provisions
on cross-border distance selling, in order to reduce the incidence
of illicit tobacco sales and tobacco sales to children, as well
as the introduction of a new notification procedure for novel
tobacco products before they are placed on the market, but reiterates
the Government's determination to secure an effective text which
minimises the burdens for Member States and, in the case of distance
sales, retailers.
Herbal products for smoking
5.22 Herbal products for smoking similarly fall outside
the scope of the 2001 Directive and are regulated in different
ways by Member States. The Government supports the Commission's
proposal to introduce a simple health warning on packaging and
to prohibit any misleading promotional elements or features.
The Minister adds:
"Evidence shows that any product that is
burnt and inhaled is dangerous to health. The harm from smoking
is primarily caused by the inhalation of toxic chemicals caused
through the process of combustion of organic material. While
herbal cigarettes are not necessarily addictive in the same way
as tobacco cigarettes, their use is still harmful. Herbal cigarettes
also produce second-hand smoke, and for this reason, herbal cigarettes
are covered by smoke-free legislation across the UK. Therefore,
the UK Government supports the introduction of health warnings
on all herbal products for smoking available in the EU."
The Minister's letter of 11 June 2013
Non-tobacco nicotine-containing products
5.23 In her second letter, the Minister sets out
the Government's position on the regulation of non-tobacco nicotine-containing
products ("NCPs"), such as e-cigarettes, which currently
fall outside the scope of the 2001 Directive and which are regulated
variously by Member States as medicines or tobacco products, prohibited,
or subject to no regulation. She explains that the outcome of
a public consultation published by the MHRA in 2011 revealed "clear
support" for regulating NCPs as medicines amongst medical
professional and NHS bodies, the British Heart Foundation, Cancer
Research, Trading Standards, the pharmaceutical and tobacco industries,
and some importers of electronic cigarettes. As, however, most
importers as well as users of unlicensed nicotine producers and
some public health-focussed organisations were opposed to the
regulation of NCPs as medicines, fearing that it would result
in an immediate ban on products currently available, lead users
back into smoking tobacco, or stifle innovation, the MHRA undertook
further scientific and market research on:
- the levels of nicotine which have a significant
pharmacological effect; and
- the impact of regulation on public health.
5.24 This work has been informed by the advice of
an Expert Group of the Commission on Human Medicines (CHM).
5.25 The Minister notes that the Commission has proposed
a dose threshold above which all NCPs would be regulated as medicines,
and those below would be treated as consumer products but carry
a prominent health warning. She continues:
"The European Commission's proposal aligns
broadly with the UK's expert advice about the need for a proportionate
regulatory regime for NCPs. The work undertaken by the MHRA has
included seeking expert advice on how medicines regulation can
be adapted to the safety profile of these particular products,
in terms of what evidence is required at the time of licensing,
where products can be sold or supplied (e.g. in supermarkets or
retail outlets), and flexibility around their packaging and labelling.
The MHRA will publish an assessment of how to achieve a proportionate
approach to the regulation of NCPs within the existing medicines
framework, focussing on managing the risk of poor quality and
ineffective products to maximise the potential benefits to public
health within a smoking harm reduction regime. This approach
would be more proportionate than banning some or all NCPs, treating
them as tobacco products, or developing a bespoke framework, which
would be likely to take some years at a time when the market for
NCPs is increasing exponentially. Publication of this advice will
enable us to influence the debate on how medicines regulation
can be applied."
5.26 The Minister says that the Commission has not
given a clear rationale for the dose threshold for NCPs proposed
in Article 18 of the draft Directive, but adds that it would capture
most NCPs currently on the UK market.[24]
She continues:
"[...] the public health implications of
allowing for the development of a two tier approach will need
to be further explored in the negotiations. In addition to ensuring
licensed products meet appropriate standards of safety, quality
and that they effectively deliver nicotine, regulation as medicines
would allow for long term safety in use to be monitored (this
does not relate to nicotine content alone) and regulatory action
to be taken if risks are identified. It would also mean that
important risks, around such products becoming a gateway to smoking
tobacco and being used by children, can be managed by controls
on medicines access and advertising. I propose to seek to negotiate
a position that brings NCPs which are medicinal by function within
medicines regulatory control."
5.27 Turning to the Commission' s proposal to introduce
a health warning ("This product contains nicotine and
can damage your health") for NCPs below the dose threshold,
the Minister adds:
"This is not scientifically valid for the
levels of nicotine in question and I propose to seek to agree
a warning that better meets public health objectives."
5.28 The Minister says she will provide us with a
copy of the MHRA's advice on the regulation of NCPs and an assessment
of the likely impact of the draft Directive, as well as Public
Health Guidelines on Tobacco Harm Reduction produced by the National
Institute for Health and Care Excellence (NICE). She concludes:
"There is a clear benefit to the UK of regulating
NCPs at EU level, to provide for a single market approach and
an opportunity for the market to transition to a single form of
regulation across the EU. This approach will enable products
currently marketed to seek a medicines licence. Once the Directive
is transposed in UK law, NCPs (above the threshold) would require
a marketing authorisation before they could be placed on the market.
"In the UK, there is a buoyant, competitive
market in over the counter medicines worth around £2.5 billion
annually, of which £100 million is for licensed nicotine
replacement therapies (e.g. gums, patches, inhalators etc). This
suggests that medicines regulation need not be a barrier to competition
and innovation. Nor is there evidence that the cost of regulation
need affect price or competition — for example there is
a highly competitive over the counter pain relief market which
has driven down prices. There are already measures in place that
would facilitate the market in this area — for example,
the lowest rate of VAT applied to licensed nicotine replacement
therapy NRT (5%)."
The Government's checklist on the costs and benefits
of the draft Directive
5.29 The Minister encloses a checklist which identifies
those most likely to be affected by the draft Directive —
tobacco manufacturers, packaging companies, tobacco wholesalers
and retailers, manufacturers and retailers of NCPs and of herbal
smoking products, national enforcement bodies, HM Treasury, and
consumers of tobacco and related products —and sets out
the expected costs and benefits. It includes the following key
figures for the UK:
- In 2012, the seasonally adjusted household final
consumption expenditure on tobacco in the UK was over £18
billion (this figure includes tobacco duties and VAT);
- 40 billion sticks were released for home consumption
in the UK in 2012 with approximately 90% of these being produced
domestically;
- In 2010-11 the legitimate, tax paid hand rolled
tobacco (HRT) market was valued at £1.6 billion. However,
HMRC estimate that 45% of HRT tobacco consumed in the UK was UK
tax unpaid;
- There were 10 enterprises involved in tobacco
manufacturing in the UK in 2011;
- In 2012, the two biggest cigarette manufacturers
had a combined market share of over 80%; and
- 5,700 people in the UK are employed directly
by tobacco manufacturers.
5.30 Whilst recognising that costs and benefits will
differ for each affected group, the Checklist indicates that the
overall benefits of the draft Directive are likely to outweigh
the costs:
"This is because the monetised value of
longer life expectancy and other long term health benefits are
very large compared to the one off costs and the loss of duty."[25]
Conclusion
5.31 We thank the Minister for her letters and
Checklist which confirm that the Government broadly supports the
draft Directive and expects the overall public health benefits
of stricter regulation of tobacco and related products to exceed
the costs.
5.32 We accept the Minister's analysis that Article
114 TFEU is an appropriate legal base and that the draft Directive
respects the principle of subsidiarity, but agree with her that
the Government should seek to retain the flexibility it currently
enjoys under the 2001 Tobacco Products Directive to maintain or
introduce domestic measures which exceed the requirements of the
draft Directive if justified on public health grounds. In particular,
the Minister wishes to keep open the possibility of introducing
standardised packaging for tobacco products, increasing the size
of health warnings, and maintaining the existing requirement to
include pictorial health warnings on all smoked tobacco products
marketed in the UK (not just cigarettes and roll-your-own tobacco).
We ask her whether she considers that Article 24 of the draft
Directive, which sets out the circumstances in which Member States
may maintain or introduce more stringent national provisions,
may be unduly restrictive and fetter the scope for further domestic
action to strengthen tobacco control.
5.33 We also ask the Minister whether she accepts
that there is a sufficient internal market or public health justification
for the provisions in Articles 12 and 13 of the draft Directive
which specify the shape and minimum content of cigarette packets
and roll-your-own pouches, as well as the minimum diameter of
cigarettes, in light of industry concerns that this could undermine
efforts to tackle illicit or counterfeit trade, unduly diminish
consumer choice, and damage the creative design sector in the
UK.
5.34 We think that the inclusion of non-tobacco
nicotine-containing products (NCPs), such as e-cigarettes, within
the scope of the draft Directive is of particular significance.
Whilst the outcome of the public consultation and scientific
and market research conducted by the MHRA would appear broadly
to endorse the regulatory approach proposed by the Commission,
we note that the MHRA intends to publish a further assessment
setting out ways in which medicines regulation can be adapted
to the safety profile of NCPs in order to ensure a proportionate
approach. We ask the Minister to clarify how such an approach
can be accommodated within the regulatory framework set out in
Article 18 of the draft Directive which empowers the Commission
(by means of delegated acts) to amend the dose threshold for NCPs
subject to regulation as medicines and to adapt health warnings
and labelling requirements for products below the threshold.
5.35 We note the Minister's view that the health
warning proposed by the Commission for NCPs below the threshold
for medicines regulation "is not scientifically valid for
the levels of nicotine in question" and ask what she considers
would be appropriate. We also look forward to receiving the Government's
separate assessment of the expected impact of Article 18 of the
draft Directive on NCPs. Meanwhile, the draft Directive remains
under scrutiny.
24 Currently, NCPs are only subject to regulation as
medicinal products in the UK if they claim or imply that they
can assist in giving up smoking. NCPs which make no such claims,
such as e-cigarettes, are not licensed as medicines. Back
25
See p.3 of the Checklist - Costs and Benefits: Summary. Back
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