Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products (presented by the Commission pursuant to Articles 47(2), 55 and 95 of the EC Treaty)

EXPLANATORY MEMORANDUM

1. INTRODUCTION

This proposal for a Directive of the European Parliament and of the Council is intended to regulate the advertising of tobacco products and related sponsorship, apart from that on television, already covered by other Community legislation. It also regulates to the extent necessary for the completion of the Internal Market the rules concerning tobacco advertising using information society services, and free distribution of tobacco products likely to undermine these provisions.

It is intended to replace Directive 98/43/EC of 6 July 1998 which has been annulled by the Court of Justice of the European Communities [1].

[1] Case C-376/98 of 5 October 2000, Germany v Parliament and Council.

It also takes account of the legislation of the Member States and of the development of international rules in this matter. It is intended to approximate the laws, regulations and administrative provisions of the Member States in order to eliminate barriers to the functioning of the Internal Market, with the objective of ensuring the free movement of goods and services which respect the rules of the Directive.

This proposal does not deal with issues such as indirect advertising, monitoring of tobacco companies' expenditures on advertising, or vending machines, which will be examined in the context of a proposal for a Council Recommendation based on Articles 152 and 153 of the Treaty that the Commission is presently preparing.

2. BACKGROUND

The regulation of tobacco advertising and sponsorship at Member State level is motivated by concern at the link between tobacco consumption and promotion. The prevention of tobacco consumption is a public health priority in Member States, and many have chosen to limit and regulate tobacco promotion in order to reduce the attraction of this addictive product. In doing so, the resulting variation in national laws and regulations has given rise to differences in treatment of economic operators across the Internal Market.

3. LEGAL BASIS

This proposal is based on Articles 47(2), 55 and 95 of the Treaty, taking as a basis a high level of public health protection. Account is also taken of public health issues raised by the Member States, which have been brought to the attention of the Commission (Article 95, paragraph 8).

In the drafting of this proposal, the Commission has taken due account of the abovementioned ruling of the Court of Justice. This judgment annulled Directive 98/43/EC on tobacco advertising and clarified the requirements for the adoption of directives under the legal basis provided by Article 95 of the EC Treaty [2].

[2] See paragraphs 98, 100, 111 and 117 of the judgment.

4. REVIEW OF NATIONAL LEGISLATION

Most Member States have adopted legislative measures to regulate tobacco advertising and related sponsorship. Others are developing legislative initiatives in this field. The scope of this national legislation varies greatly. However, all Member States have transposed Directive 89/552/EEC which imposes a prohibition on television advertising of tobacco products (Articles 13 and 17).

Three categories of countries of countries may be distinguished if one compares the national legislation on advertising of tobacco products and related sponsorship.

4.1. Limited restrictions on tobacco advertising

4.1.1. Luxembourg [3]

[3] Act of 24.3.1989 on restriction of tobacco advertising and prohibition of smoking in certain places. Règlement grand-ducal d'exécution of 6.3.1995.

Advertising is allowed only in sales outlets, in press and under certain conditions on posters. There are restrictions on advertising content and health warnings are compulsory.

4.1.2. Sweden [4]

[4] Tobacco Act (1993:581) issued in Stockholm, 3 June 1993.

All forms of tobacco products marketing must be moderate, e.g. it is not possible to advertise outdoors in public places, or in indoor places attended mostly by people under 20 years of age. Free distribution and sponsoring are subject to the same condition of moderation. Commercial advertising in press, TV and radio are prohibited in so far as the advertising is aimed to market tobacco products to consumers.

A ban on indirect advertising is planned (it requires however an amendment to the Freedom of the Press Act).

4.1.3. Spain [5]

[5] National legislation: Act No 34/1988 on advertising, Act No 25/1994.

Tobacco advertising is only prohibited on TV and in places where tobacco sale or consumption are prohibited. Sponsorship of TV programmes by persons or companies is banned if their principal activity is the production or sale of products for which advertising is prohibited. Some Autonomous Communities go further, prohibiting for instance advertising in programmes or publications destined to minors, or an outdoor advertising, or free distribution (for minors or for everybody).

4.1.4. Greece [6]

[6] Two Ministerial Decisions of 29 May 1989 concerning tobacco advertising.

Direct or indirect tobacco advertising is prohibited on TV and radio. In other media - cinemas or press - tobacco advertising is possible only if it carries a health warning. Tobacco products advertising is forbidden in health care services, educational establishments, youth centres and athletic facilities.

4.1.5. Germany [7]

[7] Act of 9.9.1997, modified on 20.7.2000.

Tobacco advertising on TV and on radio is prohibited. For other media, restrictions exist on the content of this advertising: it cannot carry statements or descriptions which could give the impression that the use of tobacco products is harmless for health; it cannot be destined to a young public; it cannot present smoking as recommendable; it cannot present tobacco products as natural. It is also forbidden to promote tobacco products by any means that are misleading or deceptive.

4.1.6. Austria [8]

[8] Tobacco Act (BGBl. 431/1995).

Tobacco advertising is prohibited in certain cases: on TV and radio, on cinema-shows accessible to young people, within the view of schools and youth-centres, or when it is specially addressed to the youth. Some restrictions are put on the advertising of certain cigarettes (without filter ...) or on the content of this advertising (featuring young smoking models or using comics ...). Free distribution of tobacco products is prohibited, as are prohibited the distribution of articles having a connection to tobacco products to children or adolescents or the distribution of advertising-articles destined for children. Moreover, advertising for tobacco products must not be combined with advertising for other products; advertising by posters, print media or cinema has to carry a health warning. Restrictions must not be evaded by indirect advertising for tobacco products that are made up like tobacco products. Sponsoring is allowed when in compliance with the abovementioned restrictions.

4.2. Total ban on tobacco advertising

4.2.1. France [9]

[9] Act No 91-32 of 10.1.1991 on control of tobacco abuse and alcohol abuse (so-called Loi Evin).

France has regulation based on a total (direct and indirect) advertising ban on tobacco products, although exceptions are permissible (point-of-sale advertising, under strict conditions). The prohibition is extended to sponsorship and free distribution. Each tobacco product conditioning carries a health warning.

4.2.2. Italy [10]

[10] Act No 52 of 22.2.1983, D. M. No 425 of 30.11.1991.

All forms of direct or indirect advertising of tobacco products and other products (with a symbol of a tobacco product) whose purpose or effect is to promote tobacco are prohibited. A health warning shall figure on tobacco conditioning. However, sponsorship of events for the benefit of tobacco products is not regulated.

4.2.3. Portugal [11]

[11] Decree No 421/80 of 30.9.1980, Decree No 226/83 of 23.5.1983, amended by Decree No 330/90 of 23.10.1990 (Advertising Rule) and by Decree No 275/98 of 9.9.1998.

Portugal applies a total ban on all forms of advertising of tobacco products, through whatever media under the jurisdiction of the Portuguese State (derogation for certain sportive events until 2001). Sponsorship of TV programmes by persons or companies whose principal activity is the production or sale of tobacco products is prohibited.

4.2.4. Finland [12]

[12] Act on Measures to reduce tobacco smoking, 693/1976 (amendments since 1976).

Direct or indirect advertising of tobacco, tobacco products, tobacco imitations and smoking accessories is prohibited. Indirect advertising includes promotion of tobacco products through advertising of other commodities using an identifiable symbol of a tobacco product; associating tobacco with the sale of other products or provision of services is prohibited. This Act does not apply to advertisements in foreign printed publications whose main purpose is not the advertising of tobacco.

4.3. Legislative change in process

4.3.1. United Kingdom [13]

[13] Tobacco Advertising and Promotion Bill, 14 December 2000 (Bill 6).

The Tobacco Advertising and Promotion Bill bans advertising and promotion whose purpose or effect is to promote a tobacco product; it includes advertising in press or electronic media, free distribution, brandsharing and sponsorship (if the purpose or the effect is to promote a tobacco product). Main exemptions concern advertising at points of sale; communications made for the purposes of the tobacco trade made to persons involved in that trade; advertising in publications whose principal market is not the UK. Specialist tobacconists are able to advertise more widely within and outside of their shops.

4.3.2. Ireland

Current situation: The Tobacco Products (Control of Advertising, Sponsorship and Sales Promotion) Act, 1978 (No 27 of 1978). A secondary legislation (Statutory Instruments) followed in 1991, 1996 and 2000.

Advertising in electronic and print media is banned (with very limited derogation), as well as sponsorship which gives rise to advertising of tobacco products.

New legislative proposal: all forms of advertising of tobacco products or of the manufacturers' name or brand image is to be prohibited, including point of sale advertising. The sale, distribution or preparation of material containing tobacco advertising are to be offences. All forms of sponsorship are to be prohibited, including sponsorship which does not directly lead to advertising.

4.3.3. Netherlands

Current situation: there is a self-regulation code of the tobacco industry for all forms of tobacco promotion (except tobacco advertising on radio and television and sponsoring of television programmes by tobacco companies which are banned - Tobacco Act, Media Act): some major provisions are restrictions of tobacco commercials in cinemas, of sampling and of advertising at youth.

Legislative proposal: there is a new (government) amendment to the current law proposal to the Parliament to strengthen the Tobacco Act (Kamerstukken II, 1998-1999, 26 472, nrs. 1-7). All forms of direct and indirect tobacco marketing, advertising, promotion and sponsorship shall be banned as soon as possible (exemption for limited forms of advertising at points of sale). Derogation shall concern the time application for sponsoring and advertising in press.

4.3.4. Denmark [14]

[14] Bill No L 134, introduced on 13 December 2000 (Proposal for an Act prohibiting tobacco advertising), planned to enter into force on 1 July 2001.

All forms of advertising of tobacco products are prohibited. Main exemptions relate to the notices addressed to specialists within the industry; advertising at points of sale (under strict conditions); advertisements in publications published in other countries, unless the main objective is to advertise tobacco in Denmark; the use of a name, used before 13 December 2000 both for tobacco products and for other products to advertise such other products in a form in which it differs clearly from the appearance of the name of the tobacco product; the use of a name, which is well-known from tobacco products, in advertising of other products and services, provided that the other product or service is only marketed in a restricted geographical area. Sponsorship for the benefit of tobacco products is prohibited, as any form of distribution aimed at promoting the sale of tobacco products.

4.3.5. Belgium [15]

[15] Act of 10.12.1997 on tobacco advertising.

Tobacco sponsorship and advertising are prohibited either on direct or indirect forms (free distribution and brand diversification products advertising are considered as indirect forms of advertising). The exceptions are related to outlet sales and publications printed outside Belgium if their principal market is not Belgium.

The Cour d'arbitrage (Decision No 102/99 of 30.9.1999) annulled the provisions related to sponsorship of international events and indirect advertising. Other court cases are still pending.

5. INTERNATIONAL RECOMMENDATIONS AND CONVENTIONS

These measures are in line with Recommendations made by the Commission's Advisory Committee for Cancer Prevention [16], and those of the World Health Assembly of the WHO [17]. The measures proposed also take account of the Commission's Consumers Committee opinion on a socially responsible Community tobacco policy adopted on 14 June 1998.

[16] Final Annex to COM(96) 609 final.

[17] Tobacco or Health, a status report, WHO, Geneva, 1997, p. 49.

Attention is particularly drawn to the work on smoking prevention under way in the World Health Organisation (WHO). The 52nd World Health Assembly on 24 May 1999 decided to establish an intergovernmental negotiating body to draft and negotiate a proposed WHO Framework Convention on Tobacco Control and possible related Protocols, open to participation by regional economic integration organisations. The Commission is participating in the negotiations on the basis of a mandate granted by Council in October 1999. The first negotiation session has already taken place and the second took place from 29 April to 5 May 2001.

In the framework of the negotiations for this Convention, attention is being given to developing provisions regulating tobacco advertising, sponsorship and other forms of promotion. This will have an impact on the existing Community acquis.

The World Bank report on tobacco control [18] concludes that bans on advertising and promotion prove effective, but only if they are comprehensive, cover all media and all uses of brand names and logos.

[18] Curbing the Epidemic, World Bank, Washington, 1999.

6. DEVELOPMENT OF COMMUNITY RULES

Tobacco advertising and sponsorship on television is completely banned by Council Directive 89/552/EEC, as amended, on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities. The text provides for all forms of television advertising of cigarettes and other tobacco products to be prohibited (Article 13). It also provides that TV programmes may not be sponsored by tobacco manufacturers (Article 17).

Directive 98/43/EC of the European Parliament and the Council on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products was annulled by the Court of Justice on 5 October 2000 in Case C-376/98.

7. CONTENT OF THIS PROPOSAL

7.1. Introduction

The ways and means of circulating information in the fifteen Member States are increasingly of a trans-frontier nature. As a result, people in one Member State are increasingly coming into contact with other Member States' media, be it in the form of radio, television, in film projections, the written press, information society services and posters. Advertising for tobacco products is following this trend, particularly because of its centralised nature and the fact that the multinational producers use themes which have a Community-wide - not to say international - appeal.

Advertising is an important economic activity which stems from the most fundamental rights. However, legislators in Member States have felt the necessity to restrict the exercise of those rights in order to protect public interest and especially to protect health. These restrictions which often reach a total ban, concern in particular advertising for certain products, no matter whether their sale is legal or not. Such restrictions exist in Member States for drugs, guns, pharmaceuticals, alcohol, toys, etc.

7.2. Tobacco advertising and the Internal Market

These differences in the regulations of the Member States, as indicated above, create barriers for the circulation of the advertising media, products and services. These barriers are not just potential but real ones. In this context, the Commission has already received complaints originating in several Member States.

The establishment of the Internal Market foreseen in Article 14 of the Treaty requires the harmonisation of national provisions on advertising for tobacco products in certain information media, including radio broadcasting.

It is important to ensure the free movement of products, means of support for their advertising, and the free provision of services in this area and to prevent the emergence of barriers to trade on the grounds of non-compliance with national provisions regarding direct advertising for tobacco products and related sponsorship.

In this context, given the current state of Member States' legislation and the case-law of the Court of Justice of the European Communities [19] harmonisation can only be logically based on banning advertising in the press and other printed publications, as well as sponsorship involving more than one Member State. Internet advertising and free distribution also need to be covered by these provisions in order to ensure applicability and coherency.

[19] Case C-376/98 of 5 October 2000.

Health protection requirements are clearly stated in the provisions of Article 95 of the Treaty which concerns the establishment of the Internal Market. Article 95(3) states that: "The Commission, in its proposals envisaged in paragraph 1 concerning health, safety, environmental protection and consumer protection, will take as a base a high level of protection ...". Therefore, the Community legislator must take into account the requirements of health protection which directly affect the establishment and the operation of the Internal Market.

As seen in the review of national legislation, future developments in many Member States are heading for increasingly stringent advertising restrictions. Eventually, even in the absence of any Community action, natural evolution in this area seems to lead legislation of individual EC Member States in the direction of a total ban of any tobacco advertising. However, substantial differences of approach and content at national level still exist despite this trend.

This is also the trend at the international level, as in the negotiations underway to develop a World Health Organisation Framework Convention on Tobacco Control. Therefore, in this area, a first step in harmonisation by regulating advertising in the press and trans-boundary sponsorship would contribute to ensure the free circulation without any barriers of such advertising means and products. A complementary provision concerning advertising in information society services, in radio broadcasting and by means of free distribution also appears necessary for the purpose of completing these Internal Market rules, and avoiding circumvention.

Restriction of conditions of competition can also occur due to the variations in rules on tobacco sponsorship, particularly as regards sporting events.

7.3. Health consequences of tobacco consumption

In the European Union tobacco consumption - and more particularly cigarette smoking - has generally become an accepted social habit, acquiring particularly among young people a positive image which has been fostered by advertising. Tobacco consumption has now become one of our major health problems. The hazards of smoking can be divided in two categories:

7.3.1. Hazards for the individual smoker: half are eventually killed by their habit, unless they can give it up

Studies of the hazards of persistent cigarette smoking, starting in early adult life and not giving up the habit, show that the risk is big. Overall, half of all persistent smokers are eventually killed by tobacco, one quarter in old age and one quarter in middle age (35-69) [20]. Those killed by tobacco in old age might well have died of something else a few years later, but those killed while still in middle age lose, on average, some 20-25 years of life expectancy. But even in middle age, those who stop before they become ill avoid most of their risk of being killed by tobacco, and stopping before middle age is even more effective [21].

[20] Doll R, Peto R, Wheatley K, Gray R, Sutherland I. Mortality in relation to smoking: 40 years' observations on male British doctors. BMJ 1994; 309: 901-11.

[21] Peto R, Lopez AD, Boreham J, Thun M, Heath C Jr. Mortality from smoking in developed countries 1950-2000. Oxford University Press, Oxford, 1994.

7.3.2. Hazards for the EU population: 0.5 million (0.4M male + 0.1M female) tobacco deaths per year

In most European countries men started smoking before women, so although the male epidemic has now levelled off at 0.4 million EU tobacco deaths per year, the female epidemic, which already involves 0.1 million EU tobacco deaths per year, is still rising. Of these EU tobacco deaths, 0.2 million involve cancer and 0.3 million involve other diseases. Tobacco now causes about 25% of all EU cancer deaths (39% male, 8% female - but, female tobacco deaths are still rising). Death in old age is unavoidable, but death in middle age is not, and a quarter of all EU deaths in middle age are now caused by tobacco. If current mortality patterns continue, then there will over the next 40 years be 20 million EU tobacco deaths, half in middle age and half in old age, and only if there is widespread cessation among adults who now smoke will these numbers be substantially reduced [22].

[22] Peto R, Darby S, Deo H, Silcocks P, Whitley E, Doll R. Smoking, smoking cessation, and lung cancer in the UK since 1950: combination of national statistics with two case-control studies. BMJ 2000; 321: 323-9.

As regards the subtle implications of the advertising of a product such as tobacco, the United Kingdom example is significant. In this Member State two thirds of the adult smokers say they want to stop, but half agreed with the statement that smoking cannot be all that dangerous, or the government would not allow tobacco to be advertised [23]. This is now being addressed for that Member State by draft legislation. Similarly, in a report commissioned by the German Ministry of Health, it is concluded that "the data are so conclusive as to justify a package of health policy measures that includes bans on advertising" [24].

[23] Economics & Operational Research Division. Effects of tobacco advertising on tobacco consumption (page 21). UK Department of Health 1992.

[24] Advertising and tobacco consumption, Harewinkel and Pohl, Kiel, 1998.

The Member States are aware of this situation and established the prevention of smoking as one of the priority aims of the "Europe against Cancer" programme already in 1986. This has been continued as a priority in subsequent programmes. Furthermore, a Recommendation was adopted by the Commission's High Level Cancer Experts Committee in Helsinki in October 1996 which was included in the Annex to the Commission's Communication on the present and proposed Community role in combating tobacco consumption [25]. This priority aim was also reflected in the Commission Report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions on progress achieved in relation to public health protection from the harmful effects of tobacco consumption [26].

[25] COM(96) 609 final.

[26] COM(1999) 407 final.

7.4. The influence of advertising on tobacco consumption

In this context, advertising would appear to be one of the factors responsible for the expansion of the market for tobacco products. The abundance of words and images seeking to promote the consumption of tobacco products glosses over any hint of harmfulness of tobacco and incites young people to adopt what appears to be a socially acceptable behaviour pattern.

Although it is not universally accepted that advertising has been shown to be uniquely and directly responsible for people trying out smoking or getting addicted to the habit, the fact remains that it does play a fundamental role in promoting tobacco products. The smoking habit tends to be acquired in most cases in childhood or adolescence. Some 60% of smokers start smoking at the age of 13, with more than 90% starting before the age of 20. Given that only something like 10% of the current smokers actually start smoking as adults, adolescents form the group from whom the largest number of new smokers are recruited [27]. The addictive nature of the product differentiates it from other consumer products which are marketed to the general public in such an intensive manner.

[27] Tye, J.B., Warner, K.E., and Glanz, S.A., "Tobacco advertising and consumption: evidence of a causal relationship". World Smoking and Health. 1988, p. 6-13.

According to the tobacco industry, the aim of advertising is simply to persuade smokers to change brands, and as such enhances the competition between the various products on the market [28]. Any form of advertising by definition seeks to increase the targeted product's share of the market. However, different studies show that smokers are very loyal to their tobacco brand and that cigarettes are among the products which have the highest brand loyalty [29].

[28] Tye, J.B., Warner, K.E., and Glanz, S.A., "Tobacco advertising and consumption: evidence of a causal relationship". Public Health Policy. 1988, p. 492-508.

[29] Agence FCB/Autres produits. Kapferer et Laurent, 1983.

Omnipresent tobacco advertising impinges on the consciousness of all sections of the population, children and adults, smokers and non-smokers, not to mention smokers who would like to quit. In particular, concerning children, a large number of whom make acquaintance with cigarette-smoking at a very early age, it is reasonable to assume that having been educated by advertising to brand-loyalty, they may, for that reason alone, become regular smokers. If advertising had no effect on the amount actually consumed, there can be no doubt that tobacco consumption would very quickly plummet as a result of demographic trends and the premature death of smokers afflicted with tobacco-related diseases.

Highlighting the role of advertising for tobacco products does not mean that there are no other factors contributing to inducing young people to start smoking, including the behaviour of friends, teachers, parents and relations and role-model personalities. It is a fact, though, that tobacco advertising sets out precisely to conjure up an image of congeniality, adventure and the personality cult - in other words, it appends to the imagination.

In the fifteen Member States, the advertising budget for tobacco products does not exceed 3% of the total advertising budget for all products or services.

In Norway, where a total ban on tobacco advertising exists since 1975, in the eight years that preceded the application of the ban, sales of advertisements - of all kinds - increased by 3.9%, whereas there was a 5.6% increase in the eight-year period that followed the entry into force of the ban. This example of Norway shows that an advertising ban does not worsen the economic situation of the press.

8. REVIEW AND REPORTING

It is clear that scientific data on tobacco and on its consumption is in constant development. In addition, the technical elements regarding advertising of such products need to be kept under review in respect, for example, of the definition of information society services, the enforcement of the restrictions on tobacco advertising by information society services and the methods of indirect advertising, while ensuring a high level of public health protection and taking into account new scientific facts, and consumer protection and information. Legislative developments in the Member States also necessitate review. A review procedure is thus important in order to ensure a smooth operation of the Internal Market.

Therefore, in order to ensure transparency and rapid circulation of information, it is proposed that the Commission reports to the Council, the European Parliament, and to the Economic and Social Committee on the application of this proposed text, and if necessary make further proposals to adapt it to developments in the field of tobacco-product advertising, and taking account of any new development based on scientific facts, using as a basis a high level of public health protection (Article 95).

9. PENALTIES FOR BREACHES OF COMMUNITY LAW IN THE INTERNAL MARKET

The Communication from the Commission to the Council and the European Parliament on the role of penalties in implementing Community Internal Market legislation [30] of 3 May 1995 establishes initial guidelines on penalties in the Internal Market field. This was followed by Council Resolution of 29 June 1995 on the effective uniform application of Community law and on the applicable penalties for breaches of Community Law in the Internal Market [31]. Following the intense legislative activity required in order to establish the Internal Market, it is now important to focus on the effective operation of the common rules introduced. In particular, it is necessary to ensure that Community measures are effectively implemented.

[30] COM(95) 162 final.

[31] OJ C 188, 22.7.1995, p. 1.

A standard clause has therefore been included to ensure that Member States take adequate and effective steps to ensure control of the implementation of measures adopted pursuant to this Directive in compliance with their national legislation. It is also provided for the intervention of persons or organisations with legitimate interest in the suppression of activities that are not in conformity with this Directive.

10. CONCLUSION

The present proposal for a Directive is intended to regulate the advertising of tobacco products and related sponsorship, apart from that on television, already covered by other Community legislation. Its objective is to approximate the laws, regulations and administrative provisions of the Member States in order to eliminate barriers to the functioning of the Internal Market, so as to ensure the free movement of goods and services which respect the rules of the Directive. It finally provides for a reporting procedure to take account in particular of new scientific developments in so far as the above affect the establishment and operation of the Internal Market.

2001/0119 (COD)

Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 47(2), 55 and 95 thereof,

Having regard to the proposal from the Commission [32],

[32] OJ C

Having regard to the opinion of the Economic and Social Committee [33],

[33] OJ C

Having regard to the opinion of the Committee of the Regions [34],

[34] OJ C

Acting in accordance with the procedure laid down in Article 251 of the Treaty [35],

[35] Opinion of the European Parliament of ....

Whereas:

(1) There are differences between the Member States' laws, regulations and administrative provisions on the advertising of tobacco products and related sponsorship. Such advertising and sponsorship in certain cases crosses the borders of the Member States or involves events organised on an international level, and are activities to which Article 49 of the Treaty applies. The differences in national legislation are likely to give rise to increasing barriers to the free movement between Member States of the products or services that serve as the support for such advertising and sponsorship. In the case of press advertising, certain obstacles have already been encountered. In the case of sponsorship, distortions of the conditions of competition are likely to increase and have already been noted as regards the organisation of certain major sporting and cultural events.

(2) Those barriers should be eliminated and, to this end, the rules relating to the advertising of tobacco products and related sponsorship should in specific cases be approximated. In particular, there is a need to specify the extent to which tobacco advertising in certain categories of publications is allowed.

(3) Article 95(3) of the Treaty requires the Commission in its proposals for the establishment and functioning of the Internal Market concerning health to take as a base a high level of protection. Within their respective powers, the European Parliament and the Council also seek to achieve this objective. The legislation of the Member States to be approximated is intended to protect public health by regulating the promotion of tobacco, an addictive product responsible for over half a million deaths in the Community annually, avoiding that young people begin smoking at an early age as a result of promotion and become addicted.

(4) The circulation in the Internal Market of publications such as periodicals, newspapers and magazines is subject to an appreciable risk of obstacles to free movement as a result of Member States' laws, regulations and administrative provisions which prohibit or regulate tobacco advertising in that media. In order to ensure free circulation throughout the Internal Market for all such media, it is necessary to limit tobacco advertising therein to those magazines and periodicals which are not intended for the general public such as trade journals and to publications published and printed in third countries, which are not principally intended for the Community market.

(5) The laws, regulations and administrative provisions of the Member States relating to certain types of sponsorship for the benefit of tobacco products with cross-border effects give rise to an appreciable risk of distortion of the conditions of competition for this activity within the Internal Market. In order to eliminate these distortions, it is necessary to prohibit such sponsorship only for those activities or events with crossborder effects, without regulating sponsorship on a purely national level, which otherwise may be a means of circumventing the restrictions placed on direct forms of advertising.

(6) Use of information society services is a means of advertising tobacco products which is increasing as public consumption and access to such services increases. Such services, as well as radio broadcasting, which may also be transmitted via information society services, are particularly attractive and accessible to young consumers. Tobacco advertising by both these media has, by its very nature, a cross-border character, and should be regulated at the Community level.

(7) Free distribution of tobacco products is subject to restriction in several Member States, given its high potential to create addiction. Cases of free distribution have occurred in the context of the sponsorship of events having cross-border effects and should therefore be prohibited.

(8) Internationally applicable standards for advertising of tobacco products and related sponsorship are the subject of negotiations for the drafting of a World Health Organisation Framework Convention on Tobacco Control. These negotiations are intended to create binding international rules complementary to those contained in this Directive.

(9) The implementation of this Directive in the Member States and the identification of further obstacles to the smooth operation of the Internal Market should be the subject of review. To that end, provision should be made for the Commission to draw up a report, accompanied if appropriate by necessary proposals. Provision should be made in the relevant Community programmes to monitor the effects of this Directive on public health.

(10) Member States should take adequate and effective steps to ensure control of the implementation of measures adopted pursuant to this Directive in compliance with their national legislation, as provided for in Commission Communication to the European Parliament and the Council on the role of penalties in implementing Community Internal Market legislation [36] and in the Council Resolution of 29 June 1995 on the effective uniform application of Community law and on the penalties applicable for breaches of Community law in the Internal Market [37]. Such means should include provision for intervention of persons or organisations with legitimate interest in the suppression of activities that are not in conformity with this Directive.

[36] COM(95) 162 final.

[37] OJ C 188, 22.7.1995, p. 1.

(11) The sanctions provided for under this Directive should be without prejudice to any other sanction or remedy provided under national law.

(12) Advertising relating to medicinal products for human use is covered by Council Directive 92/28/EEC of 31 March 1992 on the advertising of medicinal products for human use [38]. Advertising relating to products intended for use in overcoming addiction to tobacco does not fall within the scope of this Directive.

[38] OJ L 113, 30.4.1992, p. 13.

(13) This Directive should be without prejudice to Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities [39], which prohibits all forms of television advertising for cigarettes and other tobacco products. Directive 89/552/EEC provides that television programmes may not be sponsored by natural or legal persons whose principal activity is the manufacture or sale of products, or the provision of services, the advertising of which is prohibited by that Directive. Teleshopping for tobacco products is also prohibited by Directive 89/552/EEC.

[39] OJ L 298, 17.10.1989, p. 23. Directive as amended by Directive 97/36/EC (OJ L 202, 30.7.1997, p. 60).

(14) The trans-national character of advertising is recognised by Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising [40]. Directive 2001/37/EC of ..... 2001 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products [41] contains provisions on the use of misleading descriptions on the labelling of tobacco products, the cross-border effect of which has also been recognised.

[40] OJ L 250, 19.9.1984, p. 17. Directive as amended by Directive 97/55/EC (OJ L 290, 23.10.1997, p. 18).

[41] OJ L

(15) Directive 98/43/EC of the European Parliament and of the Council of 6 July 1998 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products [42] was annulled by the Court of Justice in Case C-376/98 Federal Republic of Germany v European Parliament and Council of the European Union [43]. References to Directive 98/43/EC should therefore be construed as references to this Directive.

[42] OJ L 213, 30.7.1998, p. 9.

[43] [2000] ECR I-8419.

(16) In accordance with the principle of proportionality, it is necessary and appropriate for the achievement of the basic objective of the proper functioning of the Internal Market to lay down rules on the advertising of tobacco products and related sponsorship. This Directive does not go beyond what is necessary in order to achieve the objectives pursued in accordance with the third paragraph of Article 5 of the Treaty.

(17) This Directive respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. In particular, this Directive seeks to ensure respect for the fundamental right of freedom of expression,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Subject-matter and scope

This Directive approximates the laws, regulations and administrative provisions of the Member States relating to the advertising of tobacco products and their promotion:

(a) in the press and other printed publications;

(b) in radio broadcasting;

(c) in information society services; and

(d) through tobacco related sponsorship, including the free distribution of tobacco products.

It is intended to ensure the free movement of the media concerned and related services, and to eliminate obstacles to the operation of the Internal Market.

Article 2

Definitions

For the purposes of this Directive, the following definitions shall apply:

(a) "Tobacco products" means all products intended to be smoked, sniffed, sucked or chewed inasmuch as they are made, even partly, of tobacco;

(b) "Advertising" means any form of commercial communications with the aim or direct or indirect effect of promoting a tobacco product;

(c) "Sponsorship" means any form of public or private contribution to any event, activity or individual with the aim or direct or indirect effect of promoting a tobacco product;

(d) "Information society services" means services within the meaning of Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council [44].

[44] OJ L 204, 21.7.1998, p. 37.

Article 3

Advertising in printed media and information society services

1. Advertising in the press and other printed publications shall be limited to publications intended exclusively for professionals in the tobacco trade and to publications which are published and printed in third countries, where those publications are not principally intended for the Community market.

Other advertising in the press and other printed publications shall be prohibited.

2. Advertising that is not permitted in the press and other printed publications shall not be permitted in information society services.

Article 4

Radio advertising and sponsorship

1. All forms of radio advertising for tobacco products shall be prohibited.

2. Radio programmes may not be sponsored by undertakings whose principal activity is the manufacture or sale of tobacco products.

Article 5

Sponsorship of events

1. Sponsorship of events or activities involving or taking place in several Member States or otherwise having cross-border effects shall be prohibited.

2. Any free distribution of tobacco products in the context of the sponsorship of the events referred to in paragraph 1 having the purpose or the direct or indirect effect of promoting such products shall be prohibited.

Article 6

Report

No later than five years after the date of entry into force of this Directive, the Commission shall submit a report to the European Parliament, the Council and the Economic and Social Committee on its implementation. That report shall be accompanied by any proposals for amendments to this Directive which the Commission deems necessary.

Article 7

Enforcement

Member States shall lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive. The Member States shall notify those provisions to the Commission by the date specified in Article 10 at the latest and shall notify it without delay of any subsequent amendment affecting them.

Those rules shall include provisions ensuring that persons or organisations which, according to the national legislation, can justify a legitimate interest in the suppression of advertising, related sponsorship or other matters incompatible with this Directive, may take legal action against such advertising or sponsorship or bring such advertising or sponsorship to the attention of an administrative body competent either to pronounce on complaints or to institute the appropriate legal proceedings.

Article 8

Free circulation of products and services

Member States shall not prohibit or restrict the free circulation of products or services which comply with this Directive.

Article 9

References to Directive 98/43/EC

References to Directive 98/43/EC shall be construed as references to this Directive.

Article 10

Implementation

Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 31 July 2005 at the latest. They shall forthwith inform the Commission thereof.

When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

Article 11

Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Communities.

Article 12

Addressees

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President

IMPACT ASSESSMENT FORM THE IMPACT OF THE PROPOSAL ON BUSINESS WITH SPECIAL REFERENCE TO SMALL AND MEDIUM-SIZED ENTERPRISES (SME's)

1. Title of proposal

Proposal for a Directive of the European Parliament and of the Council on the approximation of the laws, regulations and administrative provisions of the Member States relating to the advertising and sponsorship of tobacco products (Text with EEA relevance).

2. Document reference number

Doc. COM(2001) 283 final of 30.5.2001

3. The proposal

Taking account of the principle of subsidiarity, this proposal for a directive is intended to address economic operations regarding tobacco advertising in certain media and tobacco related sponsorship, presently regulated to different extents at the level of the Member States. The absence of internal frontier controls entails difficulty in effectively applying these national laws with regard to press advertising of tobacco products and tobacco-related sponsorship, which were adopted with a view to the protection of public health, and given the addictive nature of tobacco products which differentiates them from other consumer goods. Thus, the issues under consideration have cross-border aspects that cannot be satisfactorily regulated by action by Member States. In addition, the action of Member States alone or absence of Community action would conflict with the requirements of Articles 47(2), 55 and 95 of the Treaty. The adoption of measures on tobacco advertising and tobacco-related sponsorship at national level would be completed and complemented by the adoption of Community measures in addition to those already adopted in Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in the Member States concerning the pursuit of television broadcasting activities. There would be a parallel between Community measures concerning the different forms of media used as a support for tobacco advertising. These measures would also ensure that advertising by indirect means, free distribution and use of information society services would not be used to counteract the regulation of more direct forms of advertising.

In particular, the proposed measures do not go beyond what is necessary to achieve the objectives of the Treaty, in particular Articles 47(2), 55 and 95 thereof, respecting in full the principles set out in the Protocol on the application of the principles of subsidarity and proportionality annexed to the Treaty.

4. The impact on business

4.1. Who will be affected by the proposal-

- The sectors of business principally affected by the Proposal will be the manufacturers of tobacco products and traders in such products. Secondly, the press and publications sector will also be concerned. Thirdly, the sectors dealing with the organisation of international events receiving tobacco related sponsorship will be affected. Users of certain tobacco brand names and other denominations will be obliged to ensure that there is no confusion between advertising for tobacco and non-tobacco products and services.

- The sizes of business concerned will principally be large-scale manufacturers of cigarettes, who are the principal advertisers. For products other than cigarettes, advertising of roll-your-own tobacco products will be the sector principally affected. For the issue of related sponsorship, the sector principally concerned will be the manufacturers of cigarettes. In addition, the sectors of sporting and cultural events organised on an international level will be concerned.

- There are no particular geographical areas of the Community where these businesses are found.

4.2. What will business have to do to comply with the proposal-

Business will have to stop advertising in the press and publications for tobacco products. Related sponsorship, as defined in the Directive, will also have to be replaced.

4.3. What economic effects is the proposal likely to have-

- On employment: The proposed Directive will have a positive effect on employment as the rules applicable in the Member States to investment in tobacco products advertising and related sponsorship will be replaced by a uniform Community-wide rule. This will lead to greater clarity and security for market operators. It may also be noted that in a World Bank report of 1999, the following statement is made:

"Tobacco control policies would have little or no negative effect on total employment, except in a very few tobacco producing countries."

National evaluations of tobacco advertising and sponsorship regulation reach a similar conclusion. In the case of a recently proposed Danish law, the "tobacco industry did not want to provide any information on the financial consequences for the sector as a result of the Bill". However, the proposed measures are not considered to involve any administrative consequences for the business community. In the case of the current United Kingdom Bill on tobacco advertising, tobacco consumption is estimated to fall as a result of the measures proposed "by 2.5% eventually".

In any case, the tobacco industry has in previous statements denied any link between tobacco consumption and advertising and sponsorship for their products, intended, according to their analysis, to promote one brand as against another, and "to reinforce sales to existing smokers to support their continuing choice."

- On investment and the creation of new businesses: Not applicable.

- On the competitiveness of businesses: The harmonisation of rules across the Internal Market is considered to have a positive effect on the economic operators active in the advertising sector. Similarly, the absence of distortions in the market for tobacco related sponsorship will work to the advantage of business competitiveness.

4.4. Does the proposal contain measures to take account of the specific situation of small and medium-sized firms (reduced or different requirements etc)-

No. Neither are such measures envisaged in the national legislation to be harmonised.

5. Consultation

This proposal replaces a Directive (98/43/EC of 6.7.1998) which was annulled by the Court of Justice on grounds relating to its legal basis (Case C-376/98). As such, it contains elements from the previous act. In addition, the Commission Services consulted a wide number of interested parties in the tobacco industry, in the tobacco wholesale sector, workers representatives, the publishing sector, and public health interests.

The Commission received 28 replies, of which two undertook to provide comments as soon as the proposal was published.

The first category of consulted groups consisted of seven non-governmental organisations (e.g. consumer associations or public health bodies), which firmly support the European Commission's initiative: the tobacco epidemic is seen as one of the greatest public health challenges facing European countries, requiring a coordinated European response. The restriction of tobacco advertising is considered as an urgent necessity to deal with this public health problem. The notion of consumer health protection should be integrated in the new directive's provisions, in order to give it an equal or superior status to trade and investment issues.

In this context, in the opinion of these organisations a general ban on advertising, promotion, free distribution and sponsorship concerning tobacco and tobacco products should be adopted. These consulted bodies consider that this prohibition should refer to any kind of commercial communication, including electronic media, such as the Internet, or mobile phones. The problem of the definition of advertising is raised: to have some impact, the prohibition has to include indirect advertising. Using brand names of tobacco products for other non-tobacco products is considered as indirect advertising, because when marketing methods, products are less important than brands. It is an all-embracing definition of "advertising" that is needed in order to make the prohibition effective.

Moreover, Member States should have the right to maintain or adopt more restrictive measures or prohibitions, if they consider them appropriate to protect the health of their citizens. These consulted bodies insist also on the importance to put in place a monitoring system by means, for instance, of the establishment of an expert review committee, to insure proper implementation of the Directive.

On the public health aspect of the new proposal for a directive, the Commission received the particularly firm support of the WHO Regional Office for Europe, which emphasises that a ban on tobacco advertising and sponsorship is one of the most urgent policies needed among the Member States. This initiative will contribute to the development of the WHO action in this field. This position was also confirmed by the WHO Headquarters in Geneva, which endorsed the need for a restrictive approach to cross border advertising and sponsorship, as is being proposed in the WHO Framework Convention on Tobacco Control, currently being negotiated.

A second category of replies came from some tobacco manufacturers and advertising groups. In majority, they share the view that the European Union action shall have as its object the improvement of the conditions for the establishment and functioning of the Internal Market. The Court of Justice of the European Communities' decision on the previous tobacco advertising directive was recalled and this decision should be taken into account in the drafting of the new directive's provisions. These consulted firms generally do not consider advertising prohibition as a way to eliminate barriers to trade for tobacco products. It is often underlined that, due to cultural and language factors, advertisements are intended for one market and that advertising is one of the last elements of competition in those markets where the differentiation of prices is limited. A general ban of advertising of tobacco products is thus not seen as an improvement of the conditions of the functioning of the Internal Market in general and of the trade in the concerned products in particular.

Concerning the brand diversification business, the firms involved consider that advertising in brand diversification products needs to be distinguished from the forms of advertising related to the mother brand, since the former does not have the effect of promoting a tobacco product but only the products advertised. For them, this cannot be considered "indirect advertising", provided that branding is clearly distinct from any tobacco branding.

In general, some kinds of restriction on tobacco advertising and sponsorship are however regarded as acceptable. For public health reasons, the consulted firms and associations are fully aware of the necessity to restrict advertising and sponsorship as far as minors are concerned, for they are seen as a more vulnerable public than adult smokers are.

This is more particularly the case for an important multinational firm that agrees on the necessity to have a legislative framework that would protect its ability to communicate with adult smokers. It generally supports the imposition of restrictions on tobacco marketing and advertising that would permit "truthful and reasonable communications with adult smokers while limiting youth exposure to tobacco advertising". Thus, regulations should prohibit advertising in the Internet (except where it is possible to limit access to a web site to adults) and in publications destined mainly to a young public. This same firm supports a ban on the distribution of free tobacco products. It also supports the prohibition of sponsorship, including world-wide championships, provided that it does not prevent the sponsoring of any social or cultural events, as long as the name of the corporation is used in a manner clearly distinct from that used for a tobacco product. Moreover, this legislation should restrict the use by tobacco manufacturers of a tobacco brand name for a non-tobacco product or for other goods and services. Finally, this major operator emphasises the necessity to establish a government monitoring of tobacco marketing, to make sure that the rules are followed and equitably enforced as to all tobacco manufacturers.

A list of the stakeholders that have been consulted is attached:

Advertising Information Group // Brussels

Agio Sigarenfabrieken N.V. // Duizel

Altadis - European Tobacco Company // Paris

ASH - Action on Smoking and Health // London

Association of European Cancer Leagues // Helsinki

Association of Greek Tobacco Industries // Athens

British American Tobacco // London

British Medical Association // London

Confederation of European Community Cigarette Manufacturers Ltd // Brussels

Confederation of Netherlands Industry and Employers VNO - NCW // The Hague

Deutsches Krebsforschungszentrum // Heidelberg

EAAA - European Association of Advertising Agencies // Brussels

EAT - European Advertising Tripartite // Brussels

EuroCommerce // Brussels

Europäischer Tabakwaren-Großhandels-Verband // Köln

European Cigar Manufacturers Association // Eindhoven

European Committee of Food, Catering and Allied Workers' Unions within the IUF // Brussels

European Federation of Trade Unions in the Food, Agriculture and Tourism sectors and allied Branches // Brussels

European Network for Smoking Prevention (ENSP) // Brussels

European Network on Young People and Tobacco // Helsinki

European Smoking Tobacco Association // Brussels

Fedetab a.s.b.l. // Brussels

Fondation Luxembourgeoise contre le Cancer // Luxembourg

Gallaher Group Plc // Surrey

Groupement des Industries Européennes du Tabac // Paris

Heintz van Landewyck // Luxembourg

Imperial Tobacco Ltd // Bristol

International Agency for Research on Cancer // Lyon

JT International SA // Brussels

Oliver Twist // Odense

Philip Morris // Brussels

Reemtsma Cigarettenfabriken // Hamburg

RJ Reynolds International // Geneva

SEITA // Paris Cedex

Swedish Match // Stockholm

TABACALERA S.A. // Brussels

U.E.N. Ass. des Droits des Non-Fumeurs // Luxembourg

Union Internationale contre le Cancer // Geneva

World Health Organisation // Geneva

World Health Organisation, Regional Office for Europe // Copenhagen

World Wide Brands Inc // Köln

Zentralverband der deutschen Werbewirtschaft ZAW // Bonn

Zino Davidoff S.A. // Brussels