Government to fight cigarette price control case

THE State will be in the dock this week accused of fixing minimum retail prices for cigarettes.

The European Commission says the Irish practice is against EU law, distorts competition and keeps tobacco company profits high.

The Government is fighting the case arguing that it is an effective way of controlling smoking and that cigarette prices in Ireland are among the highest in Europe.

The Department of Health has said in the past that the policy is in line with the World Health Organisation’s guidelines on keeping the price of tobacco high.

However, the European Commission argues that it is not encouraging Ireland to reduce the price of cigarettes, but that they should remove the price controls.

Instead they should increase excise duty on tobacco, which would keep the cost of buying it high, would increase the revenue to the State and comply with EU rules.

Ireland is one of the most profitable countries in the EU for cigarette companies because under Irish law they must charge a high minimum price.

However, despite several warnings, the Government has refused to change its practice and last year the Commission announced they were referring Ireland, Austria and France to the European Court in Luxembourg.

The hearing is due to take place on Thursday.