I move: "That the Bill be now read a Second Time."
I thank the Ceann Comhairle for giving me this opportunity. I wish him and the House a happy new year.
I take the opportunity to outline the background to the amendments being set out. As a public health measure, for many years Ireland had set a mandatory pricing level below which the price of cigarettes could not be lowered. In the past there was an arrangement between the Department of Health and Irish tobacco companies, whereby a weighted average price was calculated for cigarettes. This arrangement was in place for over 30 years and based on sales volumes data and retail prices to year end each year. In 2010 the European Court of Justice ruled that by imposing minimum retail prices for cigarettes, Ireland had failed to fulfil its obligations under Article 9(1) of Council Directive 95/59/EC.
As a consequence of the court judgment, Ireland can no longer set a mandatory pricing level below which cigarette prices cannot be lowered, as this would restrict the freedom of the industry to make effective use of competitive advantage. The Commission indicated that it would initiate infringement proceedings if Ireland did not take steps to comply with the court judgment. As a result of this ruling, my Department informed the tobacco industry that the practice of setting floor prices for cigarettes each year would cease. In addition, Ireland advised the Commission that new regulations would be introduced to remedy the infringement. The aim of the draft regulations developed was to remove the price setting provisions in current tobacco regulations.
During this process and after a considerable period of time the Commission indicated that, in addition to the new regulations, the primary enabling tobacco legislation would need to be amended to meet the requirements of the court judgment. The purpose of amending the primary legislation is to remove the legal basis for the fixing of a minimum price. In order to comply with the court judgment, therefore, new regulations had to be devised and the primary tobacco legislation needed to be amended. I completed the first step in complying with the court ruling in December when I signed regulations - the Tobacco Products (Control of Advertising, Sponsorship and Sales Promotion) (Amendment) Regulations 2012 (S.I. No. 525 of 2012) - the effect of which was to remove the regulatory basis for the fixing of a minimum price.
On examination of the tobacco legislation, it appeared that the Public Health (Tobacco) Act 2002 and the Tobacco Products (Control of Advertising, Sponsorship and Sales Promotion) Act 1978 both needed to be amended to satisfy the court judgment. The Bill being debated achieves this in so far as it removes the legal basis for the fixing of a minimum price. In amending the relevant sections of the Act it is important for the power to introduce regulations relating to tobacco sales promotion activities to be retained by me and future Ministers. This power is already available in current tobacco legislation. The provision before the House allows for the development of regulations in this regard. More specifically, it sets out some of the types of promotion to be included in the regulations. For example, it will prohibit "three for the price of two" offers, "happy hour" promotions and "buy one, get one free" deals. The issue of sales promotion activities falls outside the court ruling because it does not relate to minimum or maximum pricing of tobacco and is not, therefore, a direct requirement of the European Commission.
I wish to set out the content of the Bill in detail. It provides for the repeal of certain provisions contained in section 2 of the Tobacco Products (Control of Advertising, Sponsorship and Sales Promotion) Act 1978. It also amends section 38 of the Public Health (Tobacco) Act 2002 in respect of activities which are intended or likely to promote the sale of tobacco products.
The Bill is short and comprises three sections. Section 1 amends section 38 of the Public Health (Tobacco) Act 2002 by removing any perceived price fixing provision. However, it retains the power to make regulations in respect of activities which are intended or likely to promote the sale of tobacco products. Specifically, the new section 38(10) gives the Minister for Health the power to make these regulations. The new section 38(10A) sets out some of the provisions which may be included in these regulations such as the prohibition of the promotion and sale of tobacco products at a reduced price or free of charge on the purchase of another tobacco product or other products or services. As I mentioned, this covers promotions like "three for the price of two" and "buy one, get one free". The prohibition of the promotion and sale of tobacco products at a reduced price or free of charge for a limited period of time on any day will prohibit "happy hour" promotions. The new section 38(11) will make it an offence for someone to contravene the regulations made under section 38(10).
In this context, it is important to state my Department and the HSE are continuously monitoring the ever-evolving marketing tactics of the tobacco industry. It is not in doubt that they are evolving and that our legislative and policy framework must evolve at the same time.
Section 2 repeals provisions contained in section 2 of the Tobacco Products (Control of Advertising, Sponsorship and Sales Promotion) Act 1978 and revokes Regulation 17 in the Tobacco Products (Control of Advertising, Sponsorship and Sales Promotion) Regulations 1991. Again, as I mentioned earlier, these provisions contained price fixing elements to them which were seen to be in contravention of the relevant European Council directive and were deemed as restricting the freedom of industry to make effective use of competitive advantage. Specifically, section 2(1) of the Bill repeals section 2(1 )(c) and sections 2(2)(h) and (2)(2)(i) of the 1978 Act. I should mention that section 8 of the Public Health (Tobacco) Act 2002, as amended by section 4 of the Public Health (Tobacco) (Amendment) Act 2004, sets out the provision for the repeal of the 1978 Act. However, it is important to note this provision is not yet commenced and the 1978 Act has not yet been repealed.
Section 2(2) of the Bill is a standard saver provision. Section 2(3) revokes Regulation 17 in the Tobacco Products (Control of Advertising, Sponsorship and Sales Promotion) Regulations 1991. As mentioned previously, this Regulation 17 was already amended and Regulation 16 deleted by the regulations I signed in December 2012 to remove any price fixing provisions from them. The revocation outlined in this Bill is to allow my Department to, as set out earlier, introduce new regulations in the future which relate to sales promotion activities, thereby ensuring there is no overlapping of provisions. Section 3 is a standard provision and provides for the Short Title, collective citation, construction and commencement.
Having set out the content of the Bill, I would like to take this opportunity to speak in a broader context about smoking in Ireland. As a doctor with decades of experience, I have seen first-hand the damage caused to the health of those who become addicted to tobacco. Tobacco use is the leading cause of preventable death in Ireland. Each year, more than 5,200 of our people die prematurely from diseases caused by tobacco use, which represents 19% of all deaths. Smokers lose on average ten to 15 years of quality life. They have higher rates of absenteeism directly attributable to smoking of, on average, five to ten days a year. Smoking increases the risk of cardiovascular disease and the risk of mortality from cardiovascular disease among smokers is 1.6 times of those who have never smoked. Smoking causes 90% of all cases of emphysema and is the main cause of chronic obstructive pulmonary disease. Smokers have higher levels of lifelong morbidity than non-smokers. Treating tobacco related illnesses accounted for €280 million, or nearly 10% of overall acute budgets, in a 2008 study on the costs of acute care.
This is a serious problem. I believe it is the greatest threat to public health this country faces and a similar position applies across Europe, with nearly 700,000 Europeans dying annually from smoking related illness. It is not surprising, therefore, that I am keen, during my period as Minister for Health, to make a significant impact in the tobacco area. The regulation of the tobacco industry in regard to its sales promotion activities, as set out in the Bill, is just one of the ways I hope to achieve this. A comprehensive range of tobacco control legislation is already in place in Ireland which places us in the top rank of countries internationally. Some of these significant initiatives include the following: the successful implementation of the smoke-free initiative in 2004, the ban on the sale of packs of cigarettes of less than 20 in 2007, the ground-breaking legislation in 2009 that introduced the ban on in-store display and advertising and the introduction of the retail register.
I am pleased to say that I introduced regulations which place an obligation on tobacco manufacturers to include photographs on cigarette and tobacco packs. These images depict the negative health impacts associated with smoking. Research and experience in other countries has shown that health warnings combined with coloured photographs can be an effective means of discouraging smoking and informing people about the health risks related to smoking. These packs will appear in our shops from next month. This particular measure, together with the 2009 retail measures, will have a positive impact on reducing the numbers of young people starting to smoke. Indeed, although the prevalence of smoking remains stubbornly high, it is heartening to see a recent survey demonstrate that the number of children smoking fell from 18% to 12% from 2002 to 2010.
The introduction of many of these measures was facilitated by developments at European Union level and it is important that our tobacco policy and legislation framework continues to develop within the context of the European Commission. To this end, I am delighted that the proposal for the revised tobacco product directive was published in December 2012 in time for the Irish EU Presidency. I intend to use the Presidency of the EU to pursue vigorously measures to reduce the prevalence of smoking, both here and across the EU. There is no doubt that if tobacco were discovered today, knowing what we know about it, it would not be legal. I recommend this Bill to the House.