EU tobacco directive proposals fall short of regulatory best practice

| May 28, 2013

The Regulatory Impact Assessment (RIA) undertaken by the European Commission on its proposed revisions to the 2001 Tobacco Products Directive (TPD) is not sufficiently robust when reviewed from the perspective of regulatory best practice, including the Commission’s own guidelines for RIA’s, according to Oxera, an economics consultancy, in a report commissioned by Japan Tobacco International (JTI).

“The aim of Oxera’s review was not to question the objectives behind the proposals; we support sound tobacco regulation,” said Dr. Gunnar Niels, director at Oxera. “However, from the perspective of best practice in public policy, regulation and economic analysis, we concluded that the RIA is not sufficiently robust and contains a number of significant shortcomings. This is not to say that there is no underlying economic case for some of the proposed regulations, or other forms of tobacco regulation. However, a more robust RIA would benefit regulatory decision-making in this area”, he added.

According to a note posted on JTI’s website, Oxera highlighted four key shortcomings; the first of which concerned a lack of clarity in respect of the objectives. ‘While the overall objective of the TPD revision is said to improve the functioning of the internal market, a number of aspects of the proposed regulations seem to go against criteria that are normally considered to be part of a well-functioning market, including innovation, competition, consumer choice and cross-border trade. In fact, most elements of the RIA seem to be driven primarily by public health considerations, identified as an additional objective, rather than the internal market.’

The baseline scenario was said not to be clearly defined and not to be based on available evidence. ‘The RIA assumes without any supporting evidence that the current trend towards decreasing tobacco consumption will stop if regulations remain unchanged, and that any further reduction in consumption would be attributed to the proposed regulations rather than existing regulations or other factors.’

There was a reliance on assumptions rather than evidence. ‘The RIA assumes that the TPD would result in a 2% reduction in tobacco consumption within five years of the proposed regulation changes. The 2% reduction in tobacco consumption is assumed rather than derived from evidence or from analysis. In addition, the cost-benefit analysis has been applied solely to the final proposed package of measures, rather than to the individual areas separately. This goes against the Commission’s own guidelines.’

And there was a limited reference to evidence or analysis in the RIA to support the proposals. ‘There is limited reference to evidence in the RIA to support the proposals on packaging; ingredients and other tobacco products; and track and trace.’

“This report further demonstrates that the proposal to revise the EU TPD has not been properly thought through, said Thierry Lebeaux, head of EU Affairs at JTI.

“In the interest of quality regulation, we hope that Oxera’s conclusions will be taken into consideration before any new measures are voted on,” he concluded.

Category: Breaking News

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