Tobacco sales licencing fee figures were 'plucked out of the air' say retailers

Retailers will have to pay a €1,800 fee to sell tobacco products and nicotine inhaling products

The fee is payable every time the licence is renewed unlike the old scheme which just had to be paid once.

A retailers group has claimed in the High Court that the previous minister for health. Stephen Donnelly introduced exorbitant new licensing fees for selling tobacco products, which were just "plucked out of the air".

Mr Donnelly, Minister for Health between 2020 and 2024, brought in regulations in 2024 under the Public Health (Tobacco Products and Nicotine Inhaling Products) Act 2023 which hiked up the old one-off €50 registration fee for selling the products.

Under the new licensing system, due to come into operation next February, retailers will have to pay a total fee of €1,800 to sell tobacco products and nicotine inhaling products, or €1,000 for tobacco alone or €800 for nicotine products alone.

The fee is payable every time the licence is renewed unlike the old scheme which just had to be paid once.

The cost of any licence cannot be passed on to consumers as retailers have no discretion as to the price they charge for tobacco products.

The Convenience Stores & Newsagents Association (CSNA), which has around 1,350 members across 1,500 stores, brought a High Court judicial review challenge seeking the quashing of the 2024 Regulations.

The retailers claim the minister acted unlawfully and outside the powers of the 2023 Act by disregarding the purpose of part of. He then unreasonably and irrationally promulgated the 2024 regulations which could never achieve that unlawful purpose, they says.

They also say the minister set the fees in a manner that was arbitrary and capricious and without any evidential or methodological basis or connection to the licensing regime being established.

They say it will have a disproportionate economic impact on smaller retailers compared to larger retailers which amounts to an arbitrary and capricious distinction not authorised by the Act.

Vincent Jennings, the CEO of the CSNA, said in an affidavit that it is "hard not to draw the inference that these exorbitant figures were simply plucked out of the air and are inherently arbitrary.” The minister denies the claims and said it has been government policy over many years to disincentivise retailers from selling tobacco products and nicotine inhaling products. That thereby reduces the availability and possibly the amount of consumption of these products by the Irish population, it was claimed.

It is also argued this policy was underpinned by evidence and/or studies from other jurisdictions which reflect that charging a certain level of licence fee would disincentivise retailers from selling such products, thus reducing the availability and/or consumption.

The retailers, in preparation for the hearing of their case, sought to cross-examine Claire Gordon, principal officer of the Department of Health, over an affidavit in which she set out the policy and legislative background to the 2023 Act. Ms Gordon also prepared a briefing note for the minister The minister opposed the application for cross examination.

In a judgment, Mr Justice Rory Mulcahy rejected the application to cross examine.

He said the retailers can still challenge Ms Gordon's evidence without such cross examination. They also cannot conduct a fishing expedition and seek to look behind Ms Gordon’s evidence and ask her to explain it in the hope of identifying some new basis for complaint.

The State cannot go beyond its own evidence as to what actually occurred and must defend the lawfulness of the minister’s actions by reference to that evidence, he said.