The European Commission is taking action against member states that impose minimum retail selling prices on cigarettes.

The Commission, in line with the jurisprudence of the European Court of Justice, takes the view that such minimum prices infringe Community law, distort competition and just benefit manufacturers by safeguarding their profit margins. The relevant Council Directive (95/59/EC) on taxes contains the right of the manufacturer and/or importer of tobacco products to determine the retail selling price. Minimum state prices impair this right and are therefore not compatible with the Directive, the EC says. To achieve the objective of reducing tobacco consumption, the Commission advocates an increase of the excise duties on cheap cigarettes.
Recently, some member states have introduced in their legislation minimum retail prices for cigarettes on the grounds of health protection. The European Commission has already launched and will continue launching infringement proceedings against member states introducing this measure.
The Commission says it recognises that price and tax measures are effective means for reducing tobacco consumption. However, tax and price measures must be in line with other treaty obligations. (pi)