The European Commission has derailed an attempt by the tobacco industry to use a low-profile industry standards organization to sway Brussels on proposed changes to cigarette packaging.
Big Tobacco planned to use the outside group as a Trojan horse to push its preferred packaging technology over that of its competitors, according to documents obtained by POLITICO. The Commission faces a looming deadline to implement controversial and expensive “track and trace” measures that are intended to fight tobacco counterfeiting and smuggling.
The tobacco companies’ move backfired, the documents show. A top Commission health official intervened to scuttle the campaign and told the European Committee for Standardization (CEN) to keep out of the way. The organization, established by industry to set common standards for consumer goods, backed down and said it would defer to the Commission.
The behind-the-scenes clash is the latest skirmish between the tobacco lobby and the Commission, and comes at a politically trying time for cigarette makers. It follows the adoption of new EU laws through the 2014 Tobacco Products Directive that force tobacco companies to change their packaging to make them possible to trace through the distribution chain. The Commission must also choose from a range of high-tech digital watermarks to prevent counterfeit.
Big Tobacco’s lobbying efforts are an attempt to promote the industry’s in-house technology, called Codentify, over systems pushed by the world’s largest printers and packaging companies. Codentify was developed by a consortium of the world’s top four tobacco companies: British American Tobacco, Imperial Tobacco Group, Japan Tobacco International and Philip Morris International.
A senior Commission official said the Commission is waiting on the results of a second feasibility study and hasn’t made up its mind about which one to back. In the meantime, Commission officials refuse to see any lobbyists on the issue, tobacco lobbyists say.
The unusual and complex fight, which took place out of the public eye, highlights the creative lengths that the tobacco industry is going to in order to influence the EU when officials in Brussels are under political pressure to keep them at arm’s length.
It comes against the backdrop of another battle playing out in European capitals over the introduction of so-called “plain packaging” for tobacco products. The 2014 reforms did not mandate plain packaging but allowed EU member governments to adopt their own legislation to remove branding from cigarette packets.
Backdoor lobbying push
According to tobacco industry insiders who have spoken to POLITICO, the four companies backing Codentify, acting in a consortium called the Digital Coding and Tracking Association, were behind a push to involve CEN. The organization established a working committee to examine packaging standards under consideration in what was an attempt to influence the Commission’s own decision-making process.
One of three European, independently-run standardization organizations to have been recognized by the EU, CEN represents 33 national organizations. Its contributions often shape the implementation of EU laws across the bloc.
CEN announced its plan to examine packaging standards last July. The decision followed a formal request from a national standards body, Belgium’s Bureau for Standardization, but sources with direct knowledge of the decision said that request was driven by the tobacco industry’s Digital Coding and Tracking Association.
None of the four tobacco companies behind the Digital Coding and Tracking Association responded to requests for comment. The European Commission declined to comment.
While the Commission’s review considered a wide range of technologies and viewpoints, CEN documents reveal that the proposed committee would have focused on packaging. CEN recommended that a range of European groups with ties to the industry — as well as the Digital Coding and Tracking Association — be part of the panel.
Four of the seven industry bodies listed in CEN’s proposal said they had no idea that their organizations had been put forward and some expressed concern about being included.
“We were not involved in CEN’s request to establish this committee,” said Henri Barthel, the vice president of GS1, an industry organization that deals with global standards for consumer goods, including tobacco products. “They did not ask us to participate. It was not our request.”
“The initiative to request the creation of a CEN technical committee came from the [tobacco] industry,” Barthel added. “The [Belgian Bureau for Standardization] wouldn’t simply wake up one morning and decide to set up a committee.”
The Bureau for Standardization didn’t respond to a request for comment.
Some tobacco industry groups were surprised to find they had been named. “I was not aware that [we] had been proposed as a member of any such committee,” said Antonella Pederiva, from the Confederation of European Community Cigarette Manufacturers.
Others objected to CEN’s exclusion of non-industry groups, in spite of its stated commitment to open the process up to “all stakeholders,” with a particular reference to “law enforcement, customs and other market surveillance authorities.”
“We do not understand why CEN has not questioned the involvement of [the tobacco industry] in the setting up of a ‘possible’ committee,” said members of the Smoke Free Partnership, an NGO that wrote a scathing letter to CEN over its plans to establish a committee.
“Let us remind you that economic operators have been, and continue to be, involved in the illegal trade of their own products,” the letter reads, referring to long-standing accusations that the tobacco industry had been aware of, and in some cases encouraged, the smuggling of its products to dodge taxes.
Smoke Free Partnership Director Florence Berteletti said she had no objection to the creation of common standards for tracing EU cigarette packages, but such decisions “should be made by independent experts, not by the tobacco industry trying to push for Codentify.”
Commission strikes back
While the correspondence obtained by POLITICO does not include the response from Andrzej Ryś, a director at the Commission’s directorate general for health and food safety, CEN’s letter refers to Ryś “expressing some concerns” about the “incompatibility of standardization processes” and the Commission’s legislative timetable.
“It is of course not our intention to duplicate any technical work or procedure, or to infringe any legislation,” CEN’s Elena Santiago Cid wrote to Ryś. “However, your conclusion regarding the (in)compatibility of our standardization process and the legislative ones seem to be contradictory to [EU regulation].”
Industry insiders suggest CEN had not understood the political implications of establishing a technical body that would shadow work being done by the Commission. Rightly or wrongly, officials saw CEN’s push as interference by the tobacco lobby in the regulatory process and made sure the proposed committee never saw the light of day.
By late November 2015, CEN had backed away from its demands, telling the Commission it would abandon plans to form the technical committee and wait until the Commission finished its own consultations.
“For CEN … this is a question of principle,” Santiago Cid told POLITICO in an email. “We are convinced about the benefits of a coherent European legal framework, the voluntary nature of European standards and the complementary and different roles of standards and legislation. These concepts did not seem to be well differentiated in the … legal documents.”
This backflip left industry observers aghast. “Frankly, it does not happen that often that the Commission manages to put a technical committee on ice,” said an expert working on standards.
Another prominent CEN member and tobacco lobbyist said the Commission saw the standards organization’s intervention in political terms, while in this person’s view the industry wanted to engage in the technical side of the “track and trace” requirements.
“We are going to have to redesign our packaging machines to include identification marks and number systems — we need a whole IT system behind us,” the lobbyist said. “We are facing a May 2016 deadline and it would have been nice to have some idea of what is expected of us.”
Lobbyists said the tobacco industry has been left in the dark about the changes. “What is always lost in the heat of the debate is whether changes are technically possible or not,” the lobbyist said. “It might be a great idea — but what is its impact on industry?”
Other observers said the politics of the decision before the Commission can’t be ignored. “I am not surprised the Commission argued against CEN’s request,” said Barthel, from GS1. “At the end of the day, this is a business and political issue, rather than a technical one.”