prices of cigarettes infringement proceedings against france and
belgium
prices of cigarettes infringement proceedings against france and
belgium

The European Commission has decided to send France and Belgium a reasoned opinion the second stage in the infringement procedure provided for in Article 226 of the EC Treaty because of the fixing of minimum retail prices for cigarettes by those countries. The Commission takes the view, based on well established case law of the Court of Justice of the European Communities, that such prices infringe Community law, distort competition and benefit only manufacturers, by safeguarding their profit margins (see IP/06/483). To achieve the objective of reducing tobacco consumption, the Commission advocates increasing the excise duty on cheap cigarettes. Unless the legislation in the Member States concerned is brought into compliance within two months of receipt of the reasoned opinion, the Commission may decide to refer the cases to the Court of Justice of the European Communities.

I strongly support Member States in their efforts to implement new health policy said Taxation Commissioner L szl&#243 Kov cs. “However, this must respect Community law. Introducing minimum retail prices for cigarettes is against Community law and mainly benefits manufacturers, who are able to protect their profit margins.

Health protection objectives may be adequately attained by increasing excise duty

The Commission recognises that price and tax measures constitute effective means of reducing tobacco consumption. Such measures must, however, be in line with obligations under Community law.

In this respect, the Court of Justice of the European Communities has already ruled that

  • imposing minimum prices is incompatible with the current legal framework (Article 9(1) of Council Directive 95/59/EC of 27 November 1995), since the setting, by the public authorities, of such prices inevitably has the effect of limiting the freedom of producers and importers to determine their selling prices (see in particular the Judgment in Case C 302/00 Commission v France 2002 ECR I 2055)
  • minimum prices are not necessary, since the public health objectives may be attained by increased taxation of tobacco products (Judgment in Case C 216/98 Commission v Greece 2000 ECR I 8921).

The Commission fully supports Member States in designing measures on tobacco control in order to ensure a high level of public health protection. Among the measures that could be used, the European Commission advocates an increase in excise duty and minimum taxes to tackle cigarette consumption. This would have the same impact on prices but would not hamper price competition to the sole benefit of manufacturers.

Background

Cigarettes are taxed by means of specific and ad valorem excise duties. Specific excise duty is based on the quantity of cigarettes. Ad valorem excise duty is a percentage applied to the price of the cigarettes. Consequently the ad valorem excise duty on cheap cigarettes will be small.

In order to increase the price of cheap cigarettes, Member States can increase the specific and/or minimum ad valorem excise duties. Minimum excise duties (calculated on the quantity) are independent of the price and ensure that all cigarettes, whether cheap or premium brands, are properly taxed.

The European Council, acting on the basis of a report from the Commission, must re examine the rates and structures of excise duty on tobacco products before the end of 2006. In the context of this review, the Commission will examine whether and to what extent the current EU directives can be improved with a view to health protection whilst also respecting the principle of “proportionality”.

The cases reference numbers are 2005/2003 (France) and 2005/2248 (Belgium).
For the latest news on infringement cases (all Member States), see

Further information on current legislation on tobacco products is available on the following website

/comm/taxation customs/taxation/excise duties/tobacco products/

Electronic cigarettes international group signs memorandum of understanding with european tobacco leader tdr

Cigarettes online Blog Archive : buy cigarettes online in canada – yam????

  • Expands ECIG’s distribution across seven countries in South East and Central Europe
  • Enhances TDR’s leading portfolio offerings to customers with value enhancing products in a high growth segment

Electronic Cigarettes International Group, Ltd. (OTCBB ECIG), today announced that it has signed a memorandum of understanding with TDR, the leading independent tobacco company in South East Europe, including a 60% market share in Croatia. The memorandum of understanding defines the terms for exclusive distribution of ECIG’s brands across TDR’s territories, with a definitive agreement and product launch expected in thefirst quarter of 2015.

TDR, part of Adris group, a holding company with annual revenue of $1 billion, is one of the largest tobacco companies in South East Europe. TDR markets its leading brands of Ronhill , Walter Wolf and York across Eastern, Central and Western Europe and the Middle East. TDR is a vertically integrated organization consisting of five companies including Hrvatski Duhani, the leading buyer, packer and dealer of Virginia and Burley tobacco in Croatia iNovine, a network of over 590 retail stores in Croatia and Bosnia and Herzegovina Istragrafika, the leading producer and exporter of commercial packaging in Croatia and Adista, TDR’s tobacco distribution companies in Croatia and Bosnia and Herzegovina. TDR also operates branch offices in Croatia, Bosnia and Herzegovina, Germany, Kosovo, Macedonia, Montenegro, Serbia, and Slovenia. Each company has a distinct role in the TDR’s value chain, from tobacco growing and processing to production, distribution and retail support for tobacco products.

Mato Zadro, Chief Executive Officer of TDR, said, “We are very excited about our partnership with ECIG. We have the strongest tobacco business in the region, and partnering with the leader in the e cig category will enable us to accelerate growth and provide our customers the leading products in this new market segment. We are convinced that electronic cigarettes will be a very significant business, and believe that both companies will benefit greatly by leveraging our combined product and distribution strengths.”

Brent Willis, Chairman and Chief Executive Officer of ECIG stated, “TDR is a great strategic partner with an outstanding leadership team. We are extremely impressed by their tremendous success and experience in the tobacco industry throughout South East Europe and other markets. We are very excited about building the electronic cigarette business with them in a very attractive and high growth region.”

About Electronic Cigarettes International Group, Ltd. (ECIG)

Electronic Cigarettes International Group, Ltd. (ECIG) is dedicated to providing a compelling alternative relative to traditional cigarettes for the more than 1 billion current smokers around the world. ECIG is a fast growing independent electronic cigarette company, and owns the trademarks VAPESTICK , FIN , Victory , GreenStix , VIP and others. The Company owns multiple subsidiary companies and has operations in North America, and Western Europe. ECIG offers consumers a full product portfolio that incorporates quality and the latest technology. The Company’s website is

Safe Harbor Disclosure

This press release contains forward looking statements that are made pursuant to the safe harbor provisions, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements are any statement reflecting management’s current expectations regarding future results of operations, economic performance, financial condition and achievements of ECIG, including statements regarding ECIG’s expectation to see continued growth. The forward looking statements are based on the assumption that operating performance and results will continue to materialize consistent with recent trends. Management believes these assumptions to be reasonable but there is no assurance that they will prove to be accurate. Forward looking statements, specifically those concerning future performance are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties include ECIG’s reliance on additional financing, ECIG’s profitability and financial health, risks associated with ECIG’s products, including that they may pose a health risk governmental regulations may impact ECIG’s business the market or consumers may not accept ECIG’s products ECIG relies on a single class of products existing or pending patents may affect ECIG’s business and other factors disclosed in the Company’s filings with the Securities and Exchange Commission. Unless required by applicable law, ECIG undertakes no obligation to update or revise any forward looking statements.

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Contacts

For investor inquiries please call
The Piacente Group, Inc.
Brandi E. Piacente
Tel 212 481 2050 ext. 402
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