A link between tobacco and subsidiarity

Essays - December 1, 2022

Less than one year after Estonia, a second judicial challenge regarding subsidiarity was brought to the Court of Justice of the European Union, this time coming from London.

On 7 November 2014, the Queen’s Bench requested a preliminary ruling in the proceedings initiated by Philip Morris and British American Tobacco against Directive 2014/40/EU.  Such legal act pursued to approximate the Member States provisions on the manufacture, presentation and sale of tobacco.

Among other items, the claimants in the main proceedings argued that the directive did not comply with subsidiarity and should therefore be declared invalid.  In particular, Article 7, entitled “Regulation of ingredients”, prohibits the placing on the EU market of tobacco products containing menthol as a characterising flavour.

The idea behind this prohibition on behalf of the European co-legislators was that modifying the smell or taste of the tobacco products reduces the harshness of tobacco, which provides a significant barrier to experimentation and initial use, notably for younger people.

Therefore, the directive would not only facilitate the smooth functioning of the internal market, but also provide for a high level of protection of human health, in line with the World Health Organisation Framework Convention on Tobacco Control, signed in Geneva on 21 May 2003.

However, the claimants defended that public health protection could have been sufficiently achieved at the level of Member States, thus demonstrating the non-compliance with subsidiarity.

In its judgment of 4 May 2016, the Second Chamber of the Luxembourg Court recognizes that this second objective “might be better achieved at the level of Member States” (paragraph 221).  This poses a logical problem, since the directive has two objectives, namely, improving the functioning of the internal market for tobacco, and protecting human health.

The second one goes against subsidiarity, as even the Court acknowledges that it could be better achieved at Member State level.  But the first one could be better achieved at EU level, as establishing the same set of legal rules on characterising flavours would allegedly improve the functioning of the EU market of tobacco products.

The Union Court solves the dilemma by reasoning that both objectives are, in fact, interconnected.  If Member States set different rules on tobacco characterising flavours in order to protect human health, this would run “completely counter” the first objective, entrenching, if not creating, situations in which some Member States permit the placing on the market of tobacco of products containing certain characterising flavours, whilst others prohibit it.

Of course, we can agree, because it is evident, that such differing situations would occur.  But where one does not agree with the Court is that such difference runs contrary to the improvement of the internal market.  If market players of the size of the claimants in the main proceedings prefer such situations, why would that represent a worsening of the internal market for tobacco?

Egalitarianism does not mean improvement.  And it is typical of European Union institutions, in this case the Court of Justice, to pretend knowing better than stakeholders what is more convenient for them and what is not.  A singular example of arrogance.

The Luxembourg magistrates repeat the reasoning they used in Estonia v Parliament and Council.  If the Directive has two objectives but the compliance of one at Member State level does run contrary to the second, then subsidiarity is not breached.

Though that is not what Article 5(3), first paragraph, of the Treaty on the European Union (TEU) establishes.  Rather, each of the two objectives should be assessed on their own merits; and only when, regarding both and every one of them, the objectives of the proposed action cannot be sufficiently achieved by the Member States, should the Union act.

On the other hand, the reasoning of the Court makes it quite easy for the other EU institutions to pass the subsidiarity check and make of this more a hypothetical requirement than a real one:  it is enough to include two objectives in a legal proposal, where the pursuit of one of them runs counter the other, to justify EU action, even of a binding nature.  A pattern of potentially sweeping consequences.

Source of the picture:  pmi.com