12.11.2013   

EN

Official Journal of the European Union

C 327/65

1.1

The legal basis for the European Commission's proposed legislative act is Article 114 of the Treaty on the Functioning of the European Union (TFEU) (1). The objective of the proposed rules is therefore ostensibly to approximate the legal rules applicable to tobacco products in order to ensure the proper functioning of the internal market. Point 3.9.1 of the explanatory memorandum for the proposed directive explains that this choice of legal basis was confirmed by the Court of Justice of the European Union in relation to Directive 2001/37/EC (2) and that the same legal basis is therefore appropriate for this proposal, which seeks to achieve a high level of public health protection in relation to the risks of tobacco.

1.2

The European Economic and Social Committee (EESC) in principle welcomes this legal basis, considering it appropriate in the light of the objectives of the proposal, which the EESC fully shares, in particular that of preventing people, especially young people, from taking up smoking. Nevertheless the EESC notes that on some occasions, for example in the European Parliament's Committee on Legal Affairs, misgivings have been expressed regarding this legal basis, notably on the grounds that the objective can be sufficiently achieved by the Member States.

1.3

The EESC fully agrees with the European Commission that the right to health must take priority over all economic considerations. In that context, the EESC is strongly in favour of promoting public education and awareness-raising plans and campaigns concerning the serious health effects of smoking. Nevertheless, scepticism remains as to whether the proposed measures will help with the gradual process of quitting smoking. Thus, the Committee recommends that the measure under examination be extended to stress the importance at EU level of school-based educational and counselling strategies, to ensure that every child or young person is correctly, fully and regularly informed of the realities of smoking and its harmful effects, and of the carcinogenic effects of exposure to environmental tobacco smoke (ETS) (3).

1.4

The Committee recognises that a considerable number of jobs will be at risk EU-wide in all sectors along the value chain of agriculture, production, packaging and retail of tobacco and related products. The EESC calls for the necessary attention to be paid to preventing these labour market risks and strongly recommends that all available forms of transitional and restructuring measures be used, in particular training schemes for workers together with scientific, technical and innovation support enabling enterprises and farms to move towards new kinds of products, in order to maintain jobs. It should be noted that tobacco cultivation contributes to rural employment. The cohesion and structural funds, regional funds and funds for research and innovation should be used effectively in Member States impacted most by this possible restructuring, particularly in the current context of economic crisis.

1.5

There is a risk that tax revenues will fall sharply, not only because of an increase in illicit trade, but also due to falling sales and prices. About EUR 100 billion in tobacco taxes are currently collected in the European Union.

1.6

There will be a sharp increase in illicit trade (i.e. smuggling and counterfeiting) by criminal networks, leading to a reduction in sales of legal tobacco, a fall in tax revenues from tobacco products, a threat to consumer safety as a result of the absence of health and quality controls and easier access to tobacco for minors. EUR 10 billion in tax receipts are lost every year in the European Union as a result of illicit trade (4) (source: OLAF). Smuggled tobacco currently accounts for 10 % of sales in the EU (5). The EESC can only welcome the recent signature, under the WHO Framework Convention on Tobacco Control, of a protocol to eliminate illicit trade in tobacco products in which stakeholders are asked to implement effective measures to eliminate the illicit production of and trade in tobacco (6).

1.7

The current proposal will significantly alter the conditions for market entry, competition and the necessary functioning of free trade in a legal, albeit exceptionally highly regulated product. The EESC acknowledges concerns raised in this regard by some impact assessments at EU and international level. However, the EESC also calls for consideration to be given to the benefits that can be expected, in terms of both reduced health care costs and improved public health bearing in mind that European citizens are entitled to a high level of protection of their health from the European Union, in accordance with Article 35 of the Charter of Fundamental Rights.

1.8

The grant of wide powers to the Commission to further develop essential aspects of the directive by means of delegated acts will encroach on the sovereignty of the Member States and thus breach the principle of subsidiarity. The EESC cannot accept delegated acts that go beyond what is expressly permitted in Article 290 TFEU. Furthermore, in the context of subsidiarity monitoring, eight national parliaments have given 14 votes against the Commission's proposal on the grounds that it does not comply with the principle of subsidiarity (7).

1.9

The EESC supports the concept of risk reduction and therefore requests the Commission to provide a clear definition and an appropriate legal framework for "reduced-risk products" for which there is clear scientific evidence of reduced risk in comparison with normal cigarettes. That is particularly relevant for products that contain tobacco rather than chemical nicotine, and that are therefore subject to the directive.

2.1

The EESC is fully aware of the risks that tobacco poses to public health. As mentioned in point 1 of the explanatory memorandum for the proposed directive, tobacco is the most significant cause of premature death in the EU, responsible for almost 700 000 deaths every year. In that context, the proposal focuses on laudable objectives which the EESC fully shares, such as preventing people, particularly the young, from taking up tobacco consumption, given that 70 % of smokers start before the age of 18 and 94 % before the age of 25, reinforcing the need to adopt measures in relation to children and young people (8).

2.2

Against that background, the EESC believes that revision of the directive is absolutely essential and should be carried out without delay. In fact, it is years behind schedule, even though the Charter of Fundamental Rights of the European Union stipulates that a high level of human health protection shall be ensured in the definition and implementation of all policies and actions of the Union. It is clear that the right to health must take priority over all economic considerations. It should also be borne in mind that the level of tobacco consumption has hardly changed in countries that have adopted very strict anti-tobacco laws. That is the case, for example, in Spain, where according to the European Commission's recently-published report on smoke-free environments, the level of consumption has fallen by only two percentage points in the last three years despite the strict laws that have been adopted (9). In addition to the measure under consideration, the EESC is therefore strongly in favour of promoting public education and awareness-raising plans and campaigns concerning the serious health effects of smoking. Those will strengthen the long-term effectiveness of the measures proposed in terms of public health, as scepticism remains as to whether these will help with the necessarily gradual process of quitting smoking.

2.3

However, the draft proposal for revision of the Tobacco Products Directive (2001/37/EC) presented by the European Commission on 19 December 2012 could have serious consequences for jobs, the economy and tax revenues in the European Union, thereby breaching other fundamental EU objectives such as full employment and economic growth (Article 3 TEU), if no accompanying measure is put into place. The tobacco sector employs almost 1.5 million people in the EU. Of those, 400 000 are farmers growing tobacco leaf, while 956 000 jobs depend on retail sales of tobacco (10). In addition, almost EUR 100 billion in taxes on tobacco products are collected every year. The sector is also very important in terms of exports, being one of the few sectors that still have a positive balance, both at European level and in many Member States. Total exports of tobacco products from the European Union were some 55 000 tonnes in 2010. The largest amounts came from Bulgaria (13 200), Greece (11 200) and France (8 000). In addition, tobacco is an agricultural product that provides 400 000 jobs in the EU, mainly in deprived areas where there are no alternatives. Statistics from UNITAB and COPA show that 96 % of agricultural holdings devoted to tobacco are family holdings, with an average cultivated area of between 0.5 and 3 hectares (11).

3.1

The European Commission's proposal for a directive on tobacco products focuses on six policy areas:

Three of these six areas would have a huge impact on employment and tax revenues in the Member States of the European Union. As regards labelling, packaging and ingredients, the proposal requires expanded health warnings that are out of all proportion to those that currently exist, limiting the format, taste and content of tobacco products. For example, all packs will have to include health warnings in the form of text and images covering 75 % of the packaging, to which will be added new information texts on the sides of packs (50 % of each side), in addition to the excise stamp that is required in some Member States, the text on prohibition of sale to minors and the space reserved for the new measures for the monitoring and traceability of tobacco products. In practice, that means a huge reduction in the space available to display duly registered trade marks. There will also be minimum requirements for the height and width of packs, which will mean that some types of pack will disappear. That includes the "casket" format that is very popular in certain countries, including Greece. The most popular type of pack in Portugal has also disappeared. In addition, this change in packaging, which is not based on scientific evidence, may threaten jobs in the packaging industry, which is of great importance in several European countries, including Germany, Poland, France, the United Kingdom and Austria. It is important to note that the minimum requirements for the height and width of tobacco products were not included in the public consultation or the impact assessment report. There is also a prohibition on the sale of cigarettes with characterising flavours and a new definition of "cigarillo" which conflicts with tax legislation that has been in force in the EU for just over a year (12).

3.2

As a result, and since all packs will have the same format and all products the same flavour, price will be the only differentiating factor between brands, leading to a loss of value for the whole value chain in the sector. With price as the only competitive factor, prices will fall, leading on the one hand to a fall in income for operators in the sector and in tax receipts for governments and, on the other, to destruction of jobs in the sector.

3.3

Allowing differentiation only on the basis of price will mean, for example, that the high-quality tobacco grown in the European Union will no longer be attractive for companies that have factories in the EU, since quality will no longer be a criterion for the purchase of tobacco leaf. Contrary to what the Commission states in its impact assessment, that involves a major risk to the jobs that depend on its cultivation. The current tobacco leaf harvest in the European Union amounts to 250 000 tonnes of tobacco per year. Italy is the largest producer with 89 000 tonnes, followed by Bulgaria with 41 056, Spain with 38 400 and Greece with 24 240. This link in the chain provides employment for 400 000 people, led by Bulgaria with 110 000 people involved in tobacco cultivation, followed by Poland with 75 100 and Italy with 59 300 (13).

3.4

Standardising format and taste could also possibly lead to an increase in tobacco smuggling. If all products end up being almost the same, it is mafias that will benefit, since it will be all too easy for them to design contraband products with the original format and taste to which consumers are accustomed, satisfying this demand through unregulated channels and without paying a cent to Member State tax authorities. In addition, the absence of any quality control of such products will severely compromise consumer safety.

3.5

According to the latest available figures, EUR 10 billion in revenues from taxes on tobacco products are lost every year as a result of illicit trade. Sales of smuggled tobacco currently account for 10 % of the EU total (14). Therefore, the EESC cannot but welcome the signature on 12 November 2012, under the WHO Framework Convention on Tobacco Control, of a protocol on the elimination of the illicit trade in tobacco products. Negotiated by the European Commission on behalf of the Union and its Member States, it calls on stakeholders to take effective measures to eliminate the manufacturing of and illicit trade in tobacco (15).

3.6

Besides the loss of tax revenues, the increase in illicit trade will lead to a fall in tobacco sales, which will affect the whole value chain but may hit tobacco retailers particularly hard. Almost a million jobs in the European Union depend, directly or indirectly, on retail sale of tobacco, whether through convenience stores, kiosks or specialised stores such as those in France, Italy, Spain and, very recently, Hungary, where networks of licensed tobacco and stamp outlets are regulated and controlled by the states concerned. In Greece alone, 40 000 jobs depend on retail sales of tobacco (16).

3.7

The EESC recognises the threat that may be caused to employment in all sectors along the value chain of production, packaging and retail of tobacco and related products, and agricultural areas where no other alternatives have been developed and where CAP subsidies are no longer available. It should be noted that tobacco cultivation contributes to rural employment. The EESC calls for the requisite attention to be paid to minimising these labour market risks and strongly recommends that here all available forms of transitional and restructuring measures should be used, in particular training schemes for workers together with scientific, technical and innovation support enabling enterprises and farms to move towards new kinds of products, in order to maintain jobs. The cohesion and structural funds, regional funds and funds for research and innovation should be used effectively in Member States impacted most by this possible restructuring, particularly in the current context of economic crisis.

3.8

To sum up, the EESC recognises that the Proposal for a Directive may contain considerable risks. However, the EESC asks that the expected improvements be taken into consideration, as regards both the reduction in health expenses and the improvement of the standard of health, given that European citizens are entitled to expect from the European Union an increased level of protection of human health, in accordance with Article 35 of the Charter of Fundamental Rights.

3.9

The proposal for a directive also includes 16 delegated acts giving the European Commission the power to amend and take decisions on essential aspects of the directive, something which is expressly prohibited by Article 290 of the Treaty on the Functioning of the European Union (17). That leaves the Council, the European Parliament and the national parliaments with almost no power over changes to key aspects of the directive.

4.1

The measures set out in the proposal for a directive are highly restrictive and are based on criteria aimed at reducing the "attractiveness" of tobacco in order to achieve their health objectives. Furthermore, the EESC draws attention to the necessity of implementing plans and educational campaigns aimed specifically at young people in Europe. In this respect, it is important to note that the European Commission's own estimate as to the health effects of its measures may appear extremely unambitious (2 %). This progressiveness will nevertheless prevent the causing of severe, and therefore potentially disproportionate, economic harm.

4.1.1

The inclusion of health warnings covering 75 % of both faces of the pack, together with the new information texts covering 50 % of the sides (Article 9), are not based on definitive scientific evidence. While a study by Hammond (18) has shown such warnings to be effective, other studies, such as those carried out by the University of Maastricht (19) and the US FDA (20) have shown the contrary, namely that pictorial health warnings are not effective in reducing the number of smokers. In this context, according to the European Commission's own Eurobarometer (21), nine out of ten smokers admit that large warnings do not encourage them to stop smoking and seven out of ten believe that this type of measure does not help reduce consumption by minors. A recent judgment of the United States Court of Appeals also concluded that there was insufficient evidence in relation to such large pictorial health warnings. It stated that there was "no evidence showing that such warnings have directly caused a material decrease in smoking rates in any of the countries that now require them," adding that "the strength of the evidence is underwhelming" (22).

4.2

Such a disproportionate increase in the size of health warnings will also lead to:

4.3

The same applies to the restrictions on ingredients requiring the removal of characterising flavours (Article 6), which are not based on scientific evidence such as reduction of the toxicity or addictiveness of those ingredients, but on the subjective criterion of reducing the attractiveness of tobacco and on subjective stereotypes as to the type of tobacco smoked by different age groups or sexes. The same subjective approach appears in the arbitrary prohibition, without any justification, of certain formats, such as slim cigarettes (a prohibition that was not included in either the public consultation or the impact assessment report), short cigarettes and the whole category of menthol cigarettes, the setting of a minimum weight for bags of roll-your-own tobacco and the standardisation of the format of tins of tobacco and, in particular, the invention of a new category of "cigarillo" in breach of Directive 2011/64/EU (24), which came into force on 1 January 2011. The prohibition of slim and menthol cigarettes, which are popular in several European countries, would deny consumers access to such cigarettes, requiring them to resort to the market in smuggled cigarettes in order to obtain them. Furthermore, these tobacco products are primarily consumed by adult smokers, meaning that the argument that this is designed to prevent minors from having access to tobacco does not apply in this specific case. In the particular case of menthol, for example, it should be pointed out that this type of tobacco is essentially consumed by adults and that, furthermore, it has not been prohibited by countries such as the United States and Canada that have highly developed anti-tobacco legislation containing very specific provisions on the prohibition of certain ingredients. The EESC therefore proposes that the prohibition on menthol be removed from the proposal for a directive.

4.3.1

In conclusion, we fully agree with the Commission's proposal to prohibit new so-called "candy-flavoured cigarettes" with flavours such as chewing gum, pina colada or mojito, which may essentially be aimed at young consumers.

4.3.2

Excessive restrictions on ingredients would lead to standardisation of taste, making it impossible for competitors to differentiate themselves and limiting investment and the possibility of launching new products, which will harm consumers by denying them choice.

4.4

The EESC requests that the Commission provide a clear definition and an appropriate legal framework for "reduced-risk products" for which there is clear scientific evidence of reduced risk in comparison with normal cigarettes. The concept of reduced risk relates to products that can take the place of normal cigarettes but that involve much less risk to health, rather than to smoking cessation products. Those products that contain tobacco rather than chemical nicotine, and that are therefore subject to the directive, should be clearly defined and regulated so as to make it possible to inform consumers of their characteristics.

4.5

The European Commission's proposal for a directive also includes measures aimed at reducing illicit trade in tobacco. For example, in Article 14 of the proposal, the European Commission sets out a system of monitoring and tracing, as well as various additional security measures, so that only products that comply with the provisions of the directive will be sold in the European Union. These measures will involve a disproportionate economic and administrative burden that many small and medium-sized enterprises will be unable to bear and, far from reducing illicit trade, will impose a greater administrative burden on Member States when carrying out inspections. Nor will the system reduce smuggling and illicit trade, which will, on the contrary, be encouraged by the other provisions of the proposal for a directive. The EESC therefore considers that the provisions of Article 14 of the proposal for a directive should be exactly the same as the monitoring and traceability clauses included in the Protocol on Illicit Trade agreed at the end of last year by the WHO Conference of the Parties (25).

4.6

Finally, the directive will allow the European Commission to use a sheaf of delegated acts to adjust and amend essential aspects, such as the level of additives and the wording, size and location of health warnings. That leaves states with almost no power over changes to the directive, involving an extraordinary degree of interventionism which the European Union has rarely seen before and which breaches the principles of subsidiarity and proportionality, as the national parliaments of eight Member States (Italy, the Czech Republic, Greece, Bulgaria, Denmark, Portugal, Romania and Sweden) are already claiming (26). The Italian parliament has not only indicated that the proposal breaches those principles, but has also emphasised that some of the types of cigarette that are to be prohibited, such as slim and low-tar cigarettes, may be useful tools of a policy whose aim is for smokers to cut back or quit (27).

4.6.1

For example, Articles 8, 9 and 11 of the proposal for a directive allow the European Commission to amend the wording, design, layout, format and location of health warnings using delegated acts. Similarly, Article 6 allows the Commission to decide on the content and maximum levels of additives by way of delegated acts.

4.6.2

In relation to cigars, cigarillos and pipe tobacco, the proposal for a directive also provides for the automatic power to withdraw certain exemptions set out in the text if there is a "substantial change of circumstances", which is linked to an increase in sales volume of at least 10 % in at least 10 Member States, or of 5 % among smokers under the age of 25. The Commission does not realise that the market for these products in 10 of the 27 current Member States is extremely small and that a 10 % change could easily occur, meaning that this provision makes no sense and creates major legal uncertainty in this sub-sector.

4.7

Although Article 290 of the Treaty on the Functioning of the European Union provides for the delegation of powers by way of delegated acts, such acts must comply with a series of requirements. Delegated acts can only be used in relation to non-essential elements of a legislative act. That is not the case with this proposal.

"1.

Save where otherwise provided in the Treaties, the following provisions shall apply for the achievement of the objectives set out in Article 26. The European Parliament and the Council shall, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market."