Dispute over cigarette price labels

 

CONVENIENCE stores have complained to the European Commission over a law that makes it compulsory for the maximum retail price to be displayed on cigarette packets, which they say will hold them hostage to the pricing policies of tobacco companies.

“Our fears were confirmed even before the law came into effect,” said Andreas Theodoulou, chairman of the convenience store association (SYKADE). “The rolling tobacco traders’ decision to reduce our commission to 4.0 per cent in a bid to restrain the retail price of their products makes our businesses unsustainable.”

The Association said it was determined to fight the provision, which left its small and medium-sized members at the mercy of the pricing policies and arbitrary decisions of tobacco merchants and tobacco industries.

The law was passed in December last year and will come into force in June.

In their complaint, filed on Monday, SYKADE argued that the law was incompatible with the competition rules of the European Union.

The association also said it planned to file for an injunction suspending implementation of the law until their complaint was examined by the European Commission.

SYKADE claimed that displaying the maximum retail price was a violation of competition as it could be seen as a fixed retail price and not a maximum retail price, as retailers will be forced to sell at the same price. 

It also suggested that in countries, like Greece, where this measure was implemented, there had been a rise in cigarette smuggling.

 “We will do everything possible to ensure the relevant law is not implemented,” Theodoulou said. “We repeatedly warned the relevant parliamentary committee not to go ahead and approve the relevant amendment.”

SYKADE said MPs had been misinformed during discussion of the matter in parliament – lawmakers were told that this was enforced in many other European countries when in reality it is the tax that is displayed and not the maximum price.