Plain tobacco packets ‘will hurt recovery’

Enda Kenny is facing pressure from German politicians, businesses and campaigners to scrap plain packaging tobacco proposals, with one group warning the plan could threaten Ireland’s financial recovery.

Plain tobacco packets ‘will hurt recovery’

Mr Kenny has received a letter signed by 27 MEPs with “concerns” about the plans. A European taxpayers group has also told him the plans could pose “threats to the Irish economy”, documents obtained by the Irish Examiner reveal.

All of the MEPs are in the European People’s Party, a centre-right group in the European Parliament that includes Fine Gael.

Some 13 of them are members of German chancellor Angela Merkel’s coalition. Others are from Spain, Italy, Luxembourg and Austria.

The MEPs say that plain packaging will “open the door to illicit trade, including counterfeit products as well as restrict fair competition”.

The European Parliament last year rejected compulsory plain packaging proposals for all member states. Instead, a directive coming into force in 2016 allows members to voluntarily adapt such rules, which Ireland plans to do.

The MEPs told Mr Kenny compulsory plain packaging was rejected as it would undermine trademark protections and “result in a loss of investment and jobs”.

The MEPs warned him Ireland’s specific plans would “violate international agreements. It can increase illicit trade, and will set a dangerous precedent for other industries and products”.

The letter was sent to Mr Kenny the week ahead of his trip to Berlin last month where he and officials met businesses and Ms Merkel.

Ms Merkel, in a speech last year, raised the importance of intellectual property and how the current pictorial warnings on tobacco goods was an acceptable compromise.

The Munich-based Taxpayers Association of Europe has also written to Mr Kenny saying the plans could “bear numerous threats to the Irish economy”.

The association, which represents 29 groups in member states, said the plans would lead to a “price war” among tobacco brands and thus less tax for the State.

The move would create a “thriving black market” and illicit tobacco sales posed a “serious threat to secure national finances”.

Mr Kenny’s department has confirmed receipt of the letters.

Revenue figures show tobacco sales raised €1.4bn in taxes in 2012.

Both gardaí and the Revenue disagree the plans will lead to increased smuggling.

Former health minister James Reilly brought his packaging tobacco plans to Cabinet in the final weeks before he was moved to the Department of Children.

The European Commission is reviewing the plans.

Under the new law, cigarette packs will look the same without branding or logos. Ireland would be the first EU member state to introduce such laws.

The Irish Cancer Society last night called on Mr Kenny and the Coalition not to be influenced by lobbying from Europe and elsewhere.

Claims that the plans could threaten Ireland’s economy were “not credible”, said head of advocacy Kathleen O’Meara.

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