Dear Sir/Madam,
We are writing to you on behalf of ECMA, the European Cigar Manufacturers Association, is the trade association of cigar and cigarillo manufacturers established in the European Union (EU). ECMA represents 26 cigar/cigarillo companies with 24 manufacturing plants in the EU. Together these companies directly employ close to 6,000 persons in their cigar/cigarillo businesses in the EU (mainly in Germany, Belgium, Italy, Spain, and Hungary) supporting a supply chain of 42,000 people in Europe and close to 500,000 workers abroad. ECMA boasts 19 family-owned companies as part of its membership with 11 falling under the EU definition of small and medium sized enterprises - from all across Europe, all with strong regional roots. None of the so-called ‘Big Four’ are members of the association.
On 12 June 2024, the outgoing Dutch government notified a draft bill to extend the plain packaging requirements for cigars and electronic vaping products (“the notified measure”). The standstill period runs until 13 September 2024.
We would like to draw your attention to the introduction by the Netherlands of an obligation that goes beyond the requirements of Directive 2014/40/EU (‘TPD’) in a disproportionate matter as the notified measure:
(1) will not achieve any of the stated objectives;
(2) disproportionately affects smaller retailers of niche tobacco products;
(3) does not in itself lay down any technical requirements and does not foresee a specific transition period for slow-moving goods; and
(4) is discriminatory.
Considering the above and below, the notified measure does not reach the threshold imposed by Article 24(2) of Directive 2014/40/EU allowing Member States to introduce stricter requirements. For these reasons, ECMA considers that the introduction of plain packaging for cigars in parallel with e-cigarettes is greatly inappropriate and unjustified. The European Commission shall therefore require the Dutch authorities to provide appropriate evidence or an analysis of the appropriateness and proportionality of the restrictive measure to be adopted, and precise evidence enabling its arguments to be substantiated.
1 – The notified measure will not achieve any of the stated objectives
To justify this decision, the Dutch authorities make the following statement: “In recent years, e-cigarettes, known as vapes, have continued to gain popularity among a young target group in the Netherlands. Furthermore, specific thinner cigars, known as cigarillos, are very popular among young people abroad. Luxury packaging also exists for cigars. It is important to prevent these harmful products from gaining even more popularity among young people”[1].
Niche tobacco products, such as cigars and cigarillos, as opposed to e-cigarettes, are demonstrably not consumed by young people. On the contrary, cigars/cigarillos typically appeal to mature consumers, who tend to be higher- income, higher-educated, and aware of the health risks associated with smoking. This has been categorically demonstrated in the latest Eurobarometer, published in June 2024[2], which confirms the absence of daily consumption of cigars/cigarillos in the 15-24 age category, as well as confirming older men with higher income as core consumers for the category. This is in stark contrasts with findings relating to e-cigarettes.
This fact was also recently supported in the European Commission’s Support Study to the report on the application of Directive 2014/40/EU, which found practically no use of cigars/cigarillos in the under-25 age group in the Netherlands[3]. The reference of US market developments to justify a measure applicable on the Dutch market is therefore intrinsically wrong. Not only the latest US figures reveal that youth usage of cigars is at an all-time low[4], but it also omits the fact that the US health authority (FDA) has been recently found of having acted “arbitrarily and capriciously” by not appropriately addressing the very same data before it [5].
Subjecting these products to Plain Packaging requirement will therefore not have any added value. Where it concerns “those who do not yet use these products”, it is also very clearly established that cigars/cigarillos are not ‘initiation products’. In this regard, the 2023 Eurobarometer report also confirms that cigars/cigarillos are not products associated with smoking initiation. Among all respondents in the Netherlands who have tried tobacco products, the most common first experience [6] of tobacco is by far cigarettes (55%), followed by hand-rolled cigarettes (22%) with only 3% mentioning cigars and 0% mentioning cigarillos.
Furthermore, such niche tobacco products are typically not used daily, but rather on an occasional basis. Cigars/cigarillos remain enjoyment products and continue to comprise a marginal and declining component of overall smoking prevalence across the EU – including in the Netherlands. According to the Special Eurobarometer report Attitudes of Europeans towards tobacco and electronic cigarette, only 3% of Dutchsmokers smoking cigarillos or cigars on a daily basis[7]; (as opposed to 41% for cigarettes and 32% for hand-rolled cigarettes); and, further, “these tobacco products are more likely to be smoked on an occasionalbasis or tried only once or twice”[8]. For these reasons, ECMA considers that the introduction of plain packaging for cigars in parallel with e-cigarettes is greatly inappropriate and unjustified.
While the Dutch authorities claim that “there is no less far-reaching alternative that can achieve the same objective”, market developments in other other European countries, which have implemented plain packaging only for cigarettes and rolling tobacco, such as Belgium, Denmark, France and Slovenia, prove that excluding niche tobacco products from plain packaging requirements do not lead to a shift of consumption with cigars/cigarillos continuing their downward declining trend – as attested in the table attached. [9]
It is therefore not demonstrated that implementing Plain Packaging for cigars will assist the Dutch authorities in achieving their objectives and is therefore not necessary.
2 – The notified measure disproportionately affects smaller retailers of niche tobacco products
The Dutch authorities also claim in their working document that “packaging plays a particular role in specialty stores that are exempt from the display ban, the so-called exempt specialty stores. There, vapes and cigars can be displayed in their attractive packaging in view of customers. Introducing standard requirements for the packaging of vapes and cigars will significantly limit the attractiveness of the packaging of these products and therefore of the products themselves”.
This claim directly contradicts the justification used by the same government to exempt so-called “specialty stores”, where cigars are primarily sold, from the display ban notified to the European Commission in 2019[10]:
“The reasoning behind exemptions from the display ban involves the proportionality of and support for the ban. On one hand, highly specialised/specialist shops are exempt because they would suffer a disproportionate adverse impact from a display ban. After all, they sell tobacco and accessories practically exclusively. Because few people will go to specialist shops of this kind for goods other than tobacco and accessories, the impact of displayed smoking products on public health is less serious than in places such as supermarkets. The other exemption, covering the smallest pre-existing specialist shops, was included to spare goods that would suffer a disproportionate adverse impact from the display ban due to their low turnover.”
3 – The notified measure does not lay down any technical requirements and does not foresee a specific transition period for slow-moving goods
As confirmed by the Dutch authorities themselves in the TRIS notification, “this amendment to the Tobacco and Smoking Products Decree does not in itself lay down any technical requirements, but since the Decree shall lead to such requirements being included in the Regulation, and the subject of neutral packaging is explained in both documents, the Decree is also notified for the sake of completeness. This Regulation is currently under preparation and shall be notified as soon as this is possible”[11].
In the absence of concrete technical regulations (as defined in Article 1 of Directive (EU) 2015/1535), cigar manufacturers are also unable to prepare their supply chains for the foreseen deadline of 1 January 2025. As recognised by the European Commission itself, cigars/cigarillos constitute slow-moving goods which require specific and additional time to comply with new requirements.
The Regulation laying down the technical requirements for cigars will also have to be notified to the European Commission according to Article 5(1) of Directive (EU) 2015/1535, including a standstill period.
As of 13 August 2024, no such Regulation has been communicated by the Dutch government.
In this regard, the European Court of Justice has already ruled that national measures disproportionately restrict the free movement of goods, even if they are in principle justified by public interest requirements, if the producers and distributors concerned are not allowed a reasonable period to adapt thereto (C-309/02, Radlberger, ECLI:EU:C:2004:799, paras. 74- 83). As already indicated above, the notified measure does not provide for a reasonable transitional period, and therefore cannot be considered proportional and proportionate.
4 – The notified measure is discriminatory
Finally, the Dutch authorities claim that the notified measure is not discriminatory considering the following: “In order to promote coherence and consistency of tobacco control policies, it is important that this standard packaging, also referred to as neutral packaging and plain packaging, is not limited to cigarettes and rolling tobacco. […] In addition, the basis for delegation applies to all cigars and electronic vaping products marketed or to be marketed in the Netherlands, which means that the measure is applied without discrimination”[12].
As demonstrated above, cigars constitute special tobacco products with unique production characteristics and patterns of consumption – characteristics shared with other traditional tobacco products which have been excluded from the scope of the proposed legislation.
In addition, ECMA takes note that the notified measure does not include ‘heated tobacco products’; products which have been subject to a triggering by the European Commission of the clauses foreseen in Articles 7(12) and 11(6) of Directive 2014/40/EU[13].
Considering the above, ECMA considers the measure to be discriminatory.
Sources:
[2] European Commission, Attitudes of Europeans towards tobacco and electronic cigarettes, Special Eurobarometer 539, June 2024, p.21.
[3] European Commission, Final Report: Support Study to the report on the application of Directive 2014/40/EU, May 2021, p. 290.
[4] According to every survey, cigar consumption by young people are at the lowest levels ever reported in the US. In certain surveys, it is now below one percent. See for examples: US FDA, 2023 Results from the Annual National Youth Tobacco Survey, 26 June 2024, accessible here: https://www.fda.gov/tobacco-products/youth-and-tobacco/results-annual-national-youth-tobacco-survey; Miech, R. A., Johnston, L. D., Patrick, M.E., O’Malley, P. M., Bachman, J. G., & Schulenberg, J. E., (2023). Monitoring the Future national survey results on drug use, 1975–2022: Secondary school students. Monitoring the Future Monograph Series. Ann Arbor, MI: Institute for Social Research, University of Michigan. Available at https://monitoringthefuture.org/results/publications/ monographs/
[5] See United States District Court, District of Columbia, CIGAR ASSOCIATION OF AMERICA, et al., Plaintiffs, v. U.S. FOOD AND DRUG ADMINISTRATION, et al., Defendants., 16-cv-01460 (APM) (D.D.C. Aug. 9, 2023), see summary here: https://www.reuters.com/legal/government/judge-throws-out-fda-rule-regulating-premium-cigars-like-cigarettes-2023-08-10/
[6] European Commission, Attitudes of Europeans towards tobacco and electronic cigarettes, Special Eurobarometer 539, June 2024, Country Fact sheet Netherlands.
[9] Sources: Euromonitor Passport 2023 data for Netherlands and Slovenia, Denmark Statistics, Sale of alcohol and tobacco, https://www.dst.dk/da/Statistik/emner/erhvervsliv/handel/salg-af-alkohol-og-tobak ; Douanes Open Data, Ventes de tabacs manufacturés en France continentale et en Corse, https://www.douane.gouv.fr/index.php/node/3390 ; FECIBEL data for Belgium. Hungary not included due to late implementation in January 2022. * The Nielsen 2022 data indicates that the number of cigars/cigarillos sold to Danish consumers have decreased by 18.54% compared to 2021 (Danish official statistics include the amount of products which have been taxed).
[10] TRIS notification 2019/0008/NL, Amendment of the Tobacco and smoking products decree regulating an exemption for points of sale from the ban on displaying tobacco and related products for sale, the ban on the sale of tobacco and related products without handover by a dispensing person, and facilities in designated smoking areas, 10 January 2019, point 9, see here: https://technical-regulation-information-system.ec.europa.eu/en/notification/15171 - emphasis added.
[11] See note 1, point 8.
[13] Commission Delegated Directive (EU) 2022/2100 of 29 June 2022 amending Directive 2014/40/EU of the European Parliament and of the Council as regards the withdrawal of certain exemptions in respect of heated tobacco products, OJ L 283, 3.11.2022, pp. 4–6.
