Tobacco Firms Lose Plain Packet Challenge

Europe's highest court has rejected a legal challenge by tobacco firms against standardised packaging rules for cigarettes.

The ruling, at the European Court of Justice, essentially dismissed complaints that changes to EU laws went beyond what was necessary on health grounds.

It (Other OTC: ITGL - news) also paves the way for member states to impose further requirements such as plain packaging measures proposed in the UK, France and Ireland (Other OTC: IRLD - news) .

In addition, the ruling removes legal barriers to the banning of menthol cigarettes from 2020 and also electronic cigarette advertising.

The updated Tobacco Products Directive will take effect on 20 May though cigarette retailers will have a year to sell off their remaining stocks before the standardised packaging rules take effect.

They are designed to make the cartons less attractive to youngsters - with health warnings more prominent and covering 65% of a packet.

The EU hopes the move will cut smoking numbers by 2.4 million and prevent 700,000 premature deaths.

A separate legal challenge by tobacco firms against UK Government plans to remove all branding from cigarette packs is due to be heard on 18 May at the High Court and could be subject to appeal.

The packaging case against the EU was brought to by Philip Morris International (LSE: 0M8V.L - news) , the maker of Marlboro, and the firm behind Rothmans and Benson & Hedges, British American Tobacco.

They argued that the bloc was abusing its authority.

But the ruling said: "The court finds that, in providing that each unit packet and the outside packaging must carry health warnings ... the EU legislature did not go beyond the limits of what is appropriate and necessary".

The Directive was due to be introduced in 2014 but was held up in the courts.

Deborah Arnott, chief executive of the anti-smoking charity Ash, welcomed the ruling.

She (Munich: SOQ.MU - news) said: "We (now) await the UK court judgement, which is expected shortly, but we are optimistic that the court will confirm that the introduction of standardised packaging in the UK is lawful.

"From 20 May, all packs manufactured for sale in the UK will have to be plain, standardised, in the same drab green colour with the product name on the pack in a standard font".

A spokesman for British American Tobacco said: "The reality is that many elements of the directive are disproportionate, distort competition and fail to respect the autonomy of member states."