Swedish Match challenges the EU prohibition on snus

Introduction
Snus, a tobacco product for oral use, has been banned within the EU (with the exception of Sweden) since 1993. Swedish Match is a Swedish company that essentially sells smokeless tobacco products, and mainly snus. On a number of occasions, Swedish Match has challenged the prohibition, and most recently in a case before the High Court of Justice (England and Wales). This has resulted in a case before the European Court, and on 12 April 2018 the Advocate General issued his opinion. Unfortunately for Swedish Match, the Advocate General appears very reluctant to challenge the EU legislature’s precautionary approach to snus. The question is whether this precautionary approach is justified in light of contradictory scientific studies on snus’ harmful effects on health and less intrusive approaches to other tobacco-related products. This article offers a summary and brief analysis of the Advocate General’s opinion pending the decision of the European Court.

Legal background 
Swedish Match has previously challenged the prohibition of snus before the European Court and lost (Judgement of 14 December 2004 (C-210/03), Swedish Match).  In light of recent developments in (1) scientific knowledge and (2) the regulatory framework applicable to tobacco and related products, Swedish Match has again challenged the prohibition of snus by questioning the validity of national UK legislation transposing the relevant provisions of Directive 2014/40/EC  (Article 1(c) and Article 17 of Directive 2014/40/EC on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products) (the ‘EU provisions’) before the High Court of Justice (England and Wales). The High Court of Justice has stayed the national proceedings and referred a question to the European Court asking if the EU provisions are invalid. Swedish Match has raised a number of causes of possible invalidity but the Advocate General’s opinion is limited to the analysis of whether the EU provisions are contrary to the principle of proportionality. The Advocate General’s opinion is based on the following three questions: (1) Is the prohibition suitable for obtaining its legitimate objective (‘suitability test’)? (2) Does the prohibition exceed the limits of what is necessary (‘necessity test’)? (3) Are the disadvantages caused appropriate to the pursued objectives (‘test of proportionality in a strict sense’)? However, the Advocate General has found that the EU provisions are not contrary to the principle of proportionality.

Suitability test
Swedish Match’s argument alleging the existence of scientific developments
Directive 2014/40 repeals Directive 2001/37. The overall objective of the revision was to improve the overall functioning of the internal market. Prior to adopting Directive 2014/40, the European Commission made an impact assessment analysing, among other things, the health effects of snus. In the present case, Swedish Match submits that (1) the risks related to the consumption of tobacco for oral use are lower than those associated with the consumption of tobacco for smoking; and (2) there are more reliable studies postdating the impact assessment that contradict the finding that the consumption of tobacco for oral use may increase, among other things, the risk of certain cancers.

Developments in scientific knowledge
With respect to contradictory studies, the Advocate General reiterates the Commission’s conclusion in the impact assessment, i.e. that contradictory studies are not sufficient to call into question the overall conclusion that snus is harmful. The Advocate General consequently takes the view that scientific uncertainties relating to potential risks of snus do not prevent the legislature from taking action to prevent such risks. Moreover, the Advocate General points out that a prohibition is not only justified on the basis of individual risks but on the basis of all of the risks linked to snus according to health and consumption patterns.

In the impact assessment, the Commission took the view that there were scientific uncertainties with respect to the health effects of snus. However, the studies showing that snus had a negative impact on health must reasonably have outweighed the studies contradicting this finding at the time. Nevertheless, the Advocate General takes the position that because scientific uncertainties already existed when the EU provisions were adopted, new studies undermining snus’ allegedly negative consequences on health can never be used to challenge the legislative position that snus should be prohibited. This is the case even if such studies could potentially outweigh those showing that snus has a negative effect on health.

Snus is less harmful than other tobacco products
In response to Swedish Match’s argument that the use of snus is less harmful than other types of tobacco, the Advocate General concludes that the Commission already acknowledged this fact in its impact assessment. Nevertheless, the Advocate General takes the view that prohibition is still justified considering that the use of snus is still harmful to health. According to Swedish Match, snus has a substitution effect, i.e. lifting the prohibition would allow users to replace tobacco for smoking with less harmful tobacco products such as snus. In the impact assessment, the Commission recognises that using snus as a substitution for smoking tobacco would have a positive effect on those individuals’ health. However, the Commission also found that lifting the ban could result in new users of tobacco as well as a dual use of tobacco for smoking and snus. Overall, the Commission found that the possible negative effects on lifting the ban were not outweighed by the potential positive effects.

Swedish Match disputes the Commission’s assessment in relation to the likelihood of a substitution effect, and in relation to the overall impact that lifting the prohibition would have on public health with reference to studies showing the effectiveness of snus as a substitute to tobacco for smoking and snus not attracting new users of tobacco. The Advocate General concludes that it is not for the Court to assess the correctness of factual data and that it is enough to note that scientific uncertainties remain with respect to the effects of lifting the prohibition. Furthermore, the Advocate General notes that the uncertainties were also recognised prior to adopting Directive 2014/40 but this did not stop the adoption of precautionary measures. In a similar case, the Court concluded that there were uncertainties with respect to the effectiveness of electronic cigarettes as substitutes and the possible gateway effect to smoking relating to the use of such cigarettes (Judgement of 4 May 2016, Pillbox 38).  In that case, the Court concluded that restricting the release of such cigarettes onto the market was not contrary to the principle of proportionality.

The Advocate General argues that it is not for the Court to assess the correctness of factual data. However, in this case the correctness of the factual data constitutes the basis for finding that prohibiting snus is a proportional measure. In situations such as this, i.e. when legislative measures are based on an assessment of factual uncertainties, it seems unreasonable that the Court cannot reassess such legislative measures when the facts evolve.

The choice of prohibition
Interestingly, the EU legislature has chosen to restrict certain products such as electronic cigarettes but to prohibit others such as snus. In Swedish Match’s opinion, the legislature has infringed the principle of proportionality by making the lifting of the prohibition of snus conditional on demonstrating that the product is harmless, although this is not required for any other product covered by Directive 2014/40. The Advocate General disputes this finding. According to the Advocate General, the legislature is entitled to adopt measures for the purpose of preventing health risks if such risks have been sufficiently documented following a scientific assessment. However, the results of such an assessment do not need to meet a certain level or certainty nor meet a particular threshold of probability. Consequently, the Advocate General argues that the prohibition of snus had not been adopted on the grounds that the use of snus had not been proven to be harmless but rather that the consumption of snus entails risks of harmful effects, which had been shown or at least sufficiently assessed.

By not making the assessment of the potentially harmful effects of snus subject to a particular level of certainty or subject to a threshold of probability, it is unpredictable which products the EU legislature will choose to prohibit and restrict respectively. Even if the Advocate General may be correct in concluding that the prohibition of snus had been adopted not on the grounds that it was not harmless but rather that it entails a risk, it is clear that the EU legislature accepts a certain risk for some products (e.g. electronic cigarettes) but not others (e.g. snus). Under these circumstances it is difficult to evaluate the correctness of the different measures of the EU’s legislature.

Recent developments in the regulatory framework applicable to tobacco and related products
Snus is the only tobacco-related product that is prohibited by Directive 2014/40. The adoption of Directive 2014/40 introduces new provisions that govern new tobacco products (especially electronic cigarettes) without prohibiting them, despite the fact that Directive 2014/40 recognises that all tobacco products are harmful. The difference in treatment between snus and other smokeless tobacco products (e.g. chewing tobacco or nasal tobacco) was introduced in 1992 and maintained by Directive 2001/37 and Directive 2014/40. According to the Advocate General, this was due to objective circumstances, including the novelty of snus on the internal market at the time, their appeal to young people and the existence of existing national prohibitions. In the Advocate General’s opinion, these circumstances are still valid.

With respect to the inconsistency in treatment between snus and tobacco for smoking, the Advocate General notes that snus was relatively new (as compared with tobacco for smoking) and, due to the number of existing smokers, the risk of an emerging black market for tobacco for smoking is therefore much higher than for snus. In relation to the alleged inconsistencies with respect to other novel tobacco products, the Advocate General finds that because these products are novel their effects cannot be studied, but by introducing a system of notification in Member States their effects on health can be studied in the future, which may lead to future prohibitions or restrictions. The Advocate General also refutes Swedish Match’ argument that snus is in fact a novel product, since it is already known on the Swedish Market. Lastly, the Advocate General concludes that electronic cigarettes have different objective characteristics from snus, which justifies different treatment.

Necessity test
The Advocate General notes that the legislature has broad discretion in this field and the purpose of applying the necessity test is thus to establish whether or not the prohibition manifestly exceeds what is necessary. The Advocate General reiterates the Court’s judgements in Swedish Match and Arnold André (Judgement of 14 December 2004, Arnold André) in which the Court found that no alternatives to prohibition would have the same effect in terms of health protection. According to the Advocate General, that conclusion is still valid.

Test of proportionality in a strict sense
Similar to the analysis of the necessity test, the Advocate General notes that the purpose of applying the test of proportionality is to establish whether the prohibition leads to disadvantages that are manifestly disproportionate to what is necessary to obtain the objectives pursued, also taking into account the interests of individuals who may be negatively affected by the prohibition. The objectives pursued also need to justify potentially negative economic effects for individual companies. The Advocate General repeats the findings of the Court in Swedish Match and Arnold André, i.e. that health objectives outweigh economic interests. The Advocate General notes that the Court did not specifically balance health objectives with economic interests and concludes that when a legislative measure intends to protect public health and fulfils the suitability and necessity test it automatically also complies with the test of proportionality in a strict sense.

Concluding remarks
The EU legislature chose to maintain a prohibition of snus on the grounds that the scientific uncertainties did not undermine the general conclusion that snus is harmful. This suggests that this general conclusion could be questioned, depending on the results of different studies. Furthermore, it is clear that the EU legislature accepts a certain level of risk on health for some products (such as electronic cigarettes). In our view, it is clear that the actual risks of a product on health are relevant when determining appropriate measures. Despite this, the EU legislature refrains from quantifying acceptable risks. This, in combination with the Court refusing to make any type of factual assessments of studies (despite being highly relevant for applying the principle of proportionality), creates a situation in which the principle of proportionality is applied in an arbitrary manner. In conclusion, if the Court adopts the position of the Advocate General, Swedish Match will be facing a continued uphill battle within the European Union.