TWO-TEN NEWS NETWORK, London, September 22. This press release is transmitted on behalf of the Tobacco Manufacturers' Association.

Four UK companies have launched a legal action challenging the European directive to ban tobacco advertising and sponsorship, which is expected shortly to become law in the UK.

British American Tobacco Investments Ltd, Gallaher Ltd, Imperial Ltd and Rothmans (UK) Ltd are asking the High Court to refer the directive to the European Court of Justice for a declaration that the directive is illegal and violates several principles of Treaty Law.

The companies are taking this action out of their strong belief that, while it is a legitimate role of national governments to act on their concerns about smoking, the European Community does not have legal power to legislate in this area.

The directive claims to have its legal base principally in Article 100a of the EC Treaty which allows the European Community to introduce harmonising measures with a view to establishing a European wide market without internal frontiers. In reality the directive is intended as a public health measure which has had to be dressed up as an internal market measure.

Speaking on behalf of the companies, David Swan, chief executive of the Tobacco Manufacturers' Association (TMA) said: "The tobacco industry, like any other business, is entitled to basic legal rights. The directive will severely restrict the companies' ability to tell customers about their products and could even rule out providing information on tobacco products to adult smokers who request it.

"This is totally unjustified and we will vigorously challenge the basis on which these restrictions to a legal product are being introduced. According to legal experts, including the European Parliament's Legal Affairs Committee and the European Council's own legal advisors, they do not have a sound basis in law."

The UK tobacco industry does not believe that banning advertising will achieve the public health goals identified by the European Commission. There is good evidence from countries like Norway that, after imposing severe advertising restrictions, consumption of cigarettes rose.

If, nevertheless, national governments wish to ban advertising, it should be a matter for them, not the EC, to work in co-operation with their local tobacco companies. This is how these matters have been dealt with for many years in the UK under voluntary agreements on advertising and sponsorship.

David Swan added: "We would have preferred to continue working with government in this way. Despite the imposition of European legislation and the UK tobacco companies' decision to challenge it, we wish to continue talking to the UK Government on all issues related to tobacco and smoking and to engage in debate to find real solutions, especially to the problem of under-age smoking. This ban is quite simply unnecessary."

Notes to Editors

1. The companies applying for a judicial review of the European directive are: British American Tobacco Investments Ltd ("British American Tobacco"), Gallaher Ltd, Imperial Tobacco Ltd, Rothmans (UK) Ltd.

2. Directive is 98/43/EC on the Approximation of the Laws, Regulations and Administrative Provisions of the Member States relating to the Advertising and Sponsorship of Tobacco Products.
   The directive was adopted by a majority of the Council of Ministers of the Community of Member States on 6 July 1998 and published in the Official Journal of the European Communities on 30 July 1998. Germany and Austria voted against the ban; Denmark and Spain abstained. The directive is binding on Member States who are required to bring in national implementation measures at the latest by various dates between 2001 and 2006 accordino to the specific Articles of the directive.

3. The companies are challenging the validity of the Directive on the grounds that:
   • It is outside the competence of the Community and has no legal basis.
   • It is incompatible with fundamental rights, in particular freedom of expression and the right to property (e.g. trademarks) as safeguarded by Article 10 and Article 1 of the Protocol of the European Convention on Human Rights (ECHR).
   • It is Incompatible with the general principle of proportionality, namely it was not necessary to introduce a complete ban on advertising and promotion; there were less restrictive alternatives; and it is disproportionate to the objectives.
   • It is also incompatible with the principle of subsidiarity, which provides that the EC may only act where the objectives cannot be sufficiently achieved by Member States or can be better achieved by Community Action.

4. Procedural issues The companies have requested an oral hearing of their application for leave to apply for a judicial review. If leave is granted, the companies will ask for the case to be referred to the European Court of Justice.
   National proceedings in the form of a judicial review are used as a vehicle for challenging the validity of a directive. National courts do not have the power to declare Community legislation invalid. However, if the national court considers it to be arguable, it will refer the matter to the ECJ for a declaration on validity.

5. History of the directive: Initially proposed in 1989 as directive providing for a ban on advertising for tobacco products in publications intended for young people under 18. Advertising in general press and posters not prohibited as such though subject to certain requirements concerning form and content.
   
   Drafts from 1991 and 1992 proposed general ban on all forms of advertising for tobacco, both direct and indirect. Also proposed ban on use of brands and trademarks associated with tobacco products for non-tobacco products, and free distribution of free tobacco products.
   
   Long political impasse followed until election of cunent UK Government in May 1997 which provided necessary qualified majority of Member States.
   
   As adopted in 1998, directive more stringent than drafts of 1991 and 1992, in particular, extended to cover sponsorship as well as advertising. Latest implementation date for 'sponsorship of events or activities organised at world level' (Formula One clause) extended to 1 October 2006

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