Select Committee on European Scrutiny Fourth Report


ADVERTISING AND SPONSORSHIP OF TOBACCO PRODUCTS


(22514)
10184/01
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
Document originated: 30 May 2001
Forwarded to the Council: 21 June 2001
Deposited in Parliament: 10 July 2001
Department: Health
Basis of consideration: EM of 18 July 2001
Previous Committee Report: None; but see footnotes below
To be discussed in Council: 15 November 2001
Committee's assessment: Legally and politically important
Committee's decision: Not cleared; further information requested

Background

2.1  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 of opposition from a number of Member States (including the UK), and 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 (now Article 95) of the EC Treaty.

2.2  In the summer of 1997, the then Presidency produced an amended text,[4] which subsequently became the subject of considerable controversy, and on which our predecessors took oral evidence on three occasions.[5] The area of discussion attracting most public interest centred around the extent of any exemptions 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 initially maintained the position it had taken in 1993. This was that the measure in question could not be based on this Article unless, in aim and content, it was intended to achieve the free movement of goods between Member States or fair competition to avoid distortion of the market, and the proposal fell outside Article 100a because it covered purely domestic situations, not the generality of the internal market, and was designed to protect health. The Council Legal Service also had grave doubts as to the possibility of basing a total ban on advertising on this Article because the ban would apply without distinction to advertising material imported from other Member States, to that intended for local domestic markets (local press), and even more locally (for example, to posters). The question of "proportionality" also arose, in as much as a measure with such a broad application was considered to go beyond what was necessary for the establishment and functioning of the internal market.

2.3  However, in November 1997, our predecessors noted that they had been told that the Council Legal Service no longer opposed the proposal on the grounds of legal base — though they had received no written evidence to explain this change of view. Be that as it may, after further discussion in the Council, Directive 98/43/EC was adopted on 6 July 1998, and came into operation on 30 July 1998, following its publication in the Official Journal. 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. 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. As regards timing, Member States were required to bring into force by 31 July 2001 the laws needed to comply with the Directive. 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 that 1 October 2006, provided that the sums devoted to such sponsorship decreased over that period, and voluntary restraint measures were introduced in order to reduce the visibility of advertising at the events concerned.

2.4  The measure was subsequently challenged by Germany in the European Court of Justice, and, in a judgement of 5 October 2000,[6] the Court annulled the Directive on the grounds that Article 100a (now Article 95) did not provide an appropriate legal base. The Court 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). Consequently, although a Directive prohibiting certain forms of advertising, such as in magazines circulating between Member States or sponsorship of sporting events) could lawfully have been adopted, it was not possible to partially annual Directive 98/43/EC without amendment. The Court therefore annulled it in its entirety.

The current proposal

2.5  On 30 May 2001, the Commission brought forward an amended proposal, which is still based on the same Articles of the Treaty (now 47(2), 55 and 95), but which the Commission says takes "due account" of the European Court's ruling. The justification for the measure is similar to that for the earlier proposals, namely the need — already exercised on a national basis by most Member States — 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. The Commission says that this aim should now be achieved, consistently with the Court's ruling, by banning press advertising and other printed publications, as well as sponsorship involving more than one Member State. It also considers that internet advertising and free distribution need to be covered in order to ensure coherency.

2.6  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 action taken no later than five years after the Directive enters into force.

The Government's view

2.7  In her Explanatory Memorandum of 18 July 2001, the Parliamentary Under- Secretary of State for Health at the Department of Health (Yvette Cooper) points out that smoking is the UK's single greatest cause of preventable illness and death, and that the Government is committed to reducing its incidence and to saving lives. She adds that action at European level in this area forms a key plank of the White Paper "Smoking kills" published in December 1998, and that the UK is in favour of this proposal. She recalls that the Government supported the previous Directive, and, upon its annulment, introduced primary legislation in the form of the Tobacco Advertising and Promotion Bill, in order to carry out its commitment to ban tobacco advertising. She says that, although that Bill fell due to lack of parliamentary time before the General Election, the Government has re-stated its commitment to re-introduce the Bill during the course of this Parliament.

2.8  On the specific aspects of the new proposal, the Minister identifies sponsorship as an area of concern, and says that the UK will be looking to maintain its existing policy in this area. It will 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.

2.9  The Minister also says that the Government is re-drafting the Regulatory Impact Assessments it prepared for the previous Directive so as to reflect the fact that the present proposal is less comprehensive.

Conclusion

2.10  Although the Minister has said that the Government will be letting us have a revised Regulatory Impact Assessment, we find the remainder of her Explanatory Memorandum surprisingly uninformative, given the background to this proposal. Consequently, when she supplies her amended Assessment, we would also like her:

    —  to identify clearly those changes which the Commission has made in response to the ruling of the European Court;

    —  to say whether, in the Government's view, those changes are consistent with that ruling;

    —  to indicate what view is taken on this last point by the Council Legal Services.



4   (18530) -; see HC 155-vii (1997-98), (19 November 1997) and HC 1204, and Official Report, European Standing Committee B, 2 December 1997. Back

5   19 November 1997, 10 December 1997 and 11 February 1998. Back

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


 
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