A tobacco retailer was forced to apply for a new license after a national law created a state monopoly on tobacco sales. The retailer’s application for a tobacco license was denied and, as a result of the lost sales, his shop was forced to close. The retailer claimed that the loss of his tobacco license unjustly deprived him of his property. The court found that the government’s decision not to grant the tobacco license interfered with the “peaceful enjoyment of possessions” guaranteed in the European Human Rights Convention. The court also found that the retailer had to suffer an excessive burden and awarded him 15,000 Euros to compensate for the lost business, plus 6,000 Euros for attorney costs.
Vekony v. Hungary, Application No. 65681/13, European Court of Human Rights (2015).
Tobacco companies or front groups may challenge any legislative or regulatory measure that affects their business interests. Unlike public interest litigation, these cases seek to weaken health measures. These cases frequently involve the industry proceeding against the government. For example, a group of restaurant owners challenging a smoke free law as unconstitutional.
Measures restricting tobacco sales to or by minors, as well as other retail restrictions relating to point-of-sale, candy and toys resembling tobacco products, vending machines, or free distribution.
(See FCTC Art. 16)
A violation of property rights, sometimes in the form of an expropriation or a taking by the government. The tobacco industry may argue that regulations amount to a taking of property rights because they prevent the use of intellectual property such as trademarks.
The court might consider procedural matters without touching the merits of the case. These might include: improper joinder, when third parties, such as Health NGOs or government officials, seek to become parties to the suit; lack of standing, where a plaintiff fails to meet the minimum requirements to bring suit; lack of personal jurisdiction, where the court does not have jurisdiction to rule over the defendant; or lack of subject matter jurisdiction, where the court does not have jurisdiction over the issue at suit.
Type of Tobacco Product
None
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
"The Court finds that the measure did not offer a realistic prospect to continue the possession because the process of granting of new concessions was verging on arbitrariness, given that (i) the existence of the previous licence was disregarded; (ii) the possibility of a former licence-holder to continue tobacco retail under the changed conditions accommodating the policy of protection of minors was not considered in the new scheme (see paragraph 8 above); (iii) the concession system enabled the granting of five concessions to one tenderer which objectively diminished the chances of an incumbent licence holder, in particular of those individuals, such as the applicant’s family, whose livelihood had depended for many years on the possibility of tobacco sale, now lost (see, mutatis mutandis, Di Marco v. Italy, no. 32521/05, § 65, 26 April 2011; and Lallement v. France, no. 46044/99, §§ 20-24, 11 April 2002) and, finally, (iv) the lack of transparent rules in the awarding of the concessions, which took place (v) without giving any privilege to a previous licence-holder, such as limiting the scope of the first round of tendering to such persons."
"The Court observes at the outset that the subject matter of the present case is the statutory cancellation of the applicant’s former licence to sell tobacco, instead of which he was not awarded another one in the tender procedure. For the Court, it is hardly conceivable not to regard this licence, once guaranteeing an important share of the applicant’s turnover (see paragraph 6 above), as a “possession” for the purposes of Article 1 of Protocol No. 1 (see Centro Europa 7 S.R.L. and Di Stefano v. Italy [GC], no. 38433/09, §§ 177-178, ECHR 2012). It further recalls that the withdrawal of a licence to carry on business activities amounts to an interference with the right to peaceful enjoyment of possessions as enshrined in Article 1 of Protocol No. 1 (see Capital Bank AD v. Bulgaria, no. 49429/99, § 130, ECHR 2005-XII (extracts); Rosenzweig and Bonded Warehouses Ltd v. Poland, no. 51728/99, § 49, 28 July 2005; and Bimer S.A. v. Moldova, no. 15084/03, § 49, 10 July 2007). Given the obvious economic interests connecting tobacco retail with the applicant’s business in general, the Court is satisfied that the statutory removal of the applicant’s long-standing tobacco licence amounted to an interference with his rights under Article 1 of Protocol No. 1 (see in particular Tre Traktörer AB v. Sweden, 7 July 1989, § 53, Series A no. 159), and this notwithstanding the harmful consequences of smoking as facilitated by tobacco retail."
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
A tobacco retailer was forced to apply for a new license after a national law created a state monopoly on tobacco sales. The retailer’s application for a tobacco license was denied and, as a result of the lost sales, his shop was forced to close. The retailer claimed that the loss of his tobacco license unjustly deprived him of his property. The court found that the government’s decision not to grant the tobacco license interfered with the “peaceful enjoyment of possessions” guaranteed in the European Human Rights Convention. The court also found that the retailer had to suffer an excessive burden and awarded him 15,000 Euros to compensate for the lost business, plus 6,000 Euros for attorney costs.