Report for the Hearing in Case C-11/92

I — Legal background

On 13 November 1989 the Council adopted Directive 89/622/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning the labelling of tobacco products (OJ 1989 L 359, p. 1, hereinafter the directive) for the purpose of eliminating differences in the provisions of the Member States in so far as such differences were likely to constitute barriers to trade and thus to impede the establishment and operation of the internal market. To that end, the Council considered that the marketing and free movement of tobacco products should be made subject to common rules concerning labelling (first and second recitals in the preamble to the directive).

Article 1 of the directive provides that its objective is the harmonization of the laws, regulations and administrative provisions concerning the warnings regarding health to appear on the unit packet of tobacco products and the indications of the tar and nicotine yields to appear on cigarette packets, taking as a base a high level of health protection by reducing the harm done to health by tobacco addiction.

The directive specifies in particular that on cigarette packets the warnings provided for in paragraphs 1 and 2 of Article 4 shall cover at least 4% of each large surface of the unit packet (Article 4(4) of the directive) and that the indications concerning tar and nicotine yields shall be printed on the side of cigarette packets so that at least 4% of the corresponding surface is covered(Article 3(3) of the directive). In each of these cases, this percentage is laid down for countries having one official language.

Article 8 of the directive also provides that Member States may not, for reasons of labelling, prohibit or restrict the sale of products which comply with the directive (paragraph 1); Member States may lay down requirements concerning the import, sale and consumption of tobacco products which they deem necessary in order to protect public health, provided such requirements do not imply any changes to labelling as laid down in the directive (paragraph 2).

Under Article 9(1) of the directive, Member States were required to adopt the national rules necessary to comply with the directive before 1 July 1990.

On 5 July 1991, the United Kingdom adopted the Tobacco Products Labelling (Safety) Regulations 1991 (Statutory Instrument 1991 No 1530, hereinafter the UK regulations) for the purpose of giving effect to the directive.

Regulation 5(2)(d) provides that the warnings on cigarette packets required by Article 4 of the directive must be printed on the packet so as to cover an area amounting to at least 6 per cent. Regulation 6(3)(b) also provides that the statement of tar and nicotine yields shall cover an area amounting to at least 6 per cent of that side of the packet.

Regulation 8(c) and (d) provides that a person who imports cigarettes of any brand into the United Kingdom from another Member State with a view to them being supplied for consumption in the United Kingdom shall be regarded as complying with the UK regulations if the packets carry warnings in English complying with requirements imposed by that other Member State pursuant to the directive.

According to the court malting the reference, it follows from those provisions that cigarettes labelled under the law of another Member State which requires the relevant information and warnings to cover at least 4% of the relevant surface areas may be sold in the United Kingdom while domestically produced cigarettes may be sold only if they are labelled in accordance with the 6% requirement imposed by the UK regulations.

II — Facts and procedure

Gallaher Limited, Imperial Tobacco Limited and Rothmans International Tobacco (UK) Limited (hereinafter the applicants in the main proceedings) manufacture tobacco products (including cigarettes for retail sale in the United Kingdom and export to other Member States). They have brought proceedings before the High Court of Justice (Queen's Bench Division) in which they contest the legality of Regulations 5(2)(d) and 6(3)(b) of the UK regulations on the ground that they are inconsistent with Articles 3(3) and 4(4) of the directive and consequently unlawful and inapplicable.

In support of their application, the applicants in the main proceedings contend that the reference to at least 4% is a labelling requirement which Member States must impose for cigarettes sold within their territory, rather than a minimum requirement which may be increased by Member States in the case of domestic production. Accordingly, the increase in the spatial requirement from 4% to 6% is inconsistent with the directive and in particular Article 8 thereof. Since they will be compelled in the future to adopt the 6% laid down by the UK regulations, the applicants in the main proceedings argue that their products will face possible disadvantage as compared with imports of competing products from other Member States, as will be the case if they export to other Member States where the 4% rule is applied. The applicants in the main proceedings contend that this is contrary to the terms of the directive and the general principles of Community law.

The Secretary of State for Health contends that the directive provides for partial harmonization and that Articles 3(3) and 4(4) lay down minimum requirements and do not preclude the adoption of stricter requirements in respect of domestic production in the interests of protecting public health. A Member State may not, however, restrict on labelling grounds the importation of tobacco products produced in another Member State if those products comply with the requirements laid down by that other Member State pursuant to the directive. According to the Secretary of State for Health, the UK regulations comply with those rules and are a correct implementation of the directive, as indeed the Commission confirmed in a letter of 17 October 1991 to the organization known as Action on Smoking and Health.

In the light of the foregoing, the High Court of Justice (Queen's Bench Division) decided by order of 12 December 1991 to stay the proceedings and seek from the Court of Justice a preliminary ruling on the following question:

III — Procedure before the Court

The order for reference was received at the Court Registry on 13 January 1992.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted:

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.

Pursuant to Article 95(1) and (2) of the Rules of Procedure, the Court decided by decision of 18 November 1992 to assign the case to the Fifth Chamber.

IV — Written observations submitted to the Court

1. The applicants in the main proceedings first of all point out that the directive is based on Article 100a of the EEC Treaty and that its purpose is to eliminate possible barriers to trade resulting from differences in national labelling rules capable of obstructing the establishment and operation of the internal market, a precondition for which, under Article 8a of the EEC Treaty, is the existence of conditions of competition which are not distorted (Case C-300/89 Commission V Council [1991] ECR I-2867, at paragraph 14). Those differences may not only affect the free movement of the goods in question, but may also lead to unequal conditions of competition (preamble to Council Directive 79/112/EEC of 18 December 1978 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs for sale to the ultimate consumer (OJ 1979 L 33, p. 1)).

2. The United Kingdom points out first of all that the directive was adopted under Article 100a of the EEC Treaty and is consequently a measure adopted for the achievement of the objectives set out in Article 8a of the Treaty which takes into account differences in levels of development (see Article 8c) and therefore does not necessarily reflect the highest level of protection currently existing in any particular Member State. The fact that the directive provides, under Article 100a(3), for a high level of health protection by laying down minimum standards does not mean that it purports to provide the highest possible level of health protection.

3. In its observations submitted in support of those of the United Kingdom, Ireland takes substantially the same position as the United Kingdom and proposes that the question referred should be replied to in the following terms:

4. The Commission first of all points out that the harmonization of laws provided for under the Treaty can be of three main types:

1 Language of the case: English.