R (Sinclair Collis Ltd) v Secretary of State for Health
| Jurisdiction | England & Wales |
| Judgment Date | 01 December 2010 |
| Neutral Citation | [2010] EWHC 3112 (Admin) |
| Docket Number | Case No: CO/1906/2010 AND CO/4698/2010 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 01 December 2010 |
[2010] EWHC 3112 (Admin)
IN THE HIGH COURT OF JUSTICE
ADMINISTRATIVE COURT
Before: President of the Queen'S Bench Division
Case No: CO/1906/2010 AND CO/4698/2010
Dinah Rose QC and Brian Kennelly (instructed by Ashurst LLP) for the Claimant
Nicholas Paines QC and Ian Rogers (instructed by DWP/DH Legal Services) for the Defendant
Thomas de la Mare and Iain Steele (instructed by Davies Arnold Cooper) for the Interested Party
Hearing dates: 12 th and 13 th October 2010
Crown copyright©
Sir Anthony May President of the Queen's Bench Division:
Introduction
It is well known that Government policy in recent years has consistently been to discourage people from smoking tobacco and to take progressive measures to reduce its harmful and destructive effect. The recent Government publication “A Smokefree Future”, published on 1 st February 2010, contains “a comprehensive control strategy for England” and relates facts which in general are very familiar, giving an account of measures which have already been taken. The Foreward by Gillian Merron, then Minister of State for Public Health, refers back to the 1998 Government publication “Smoking Kills”, and tells us that Government action and policy has reduced the number of adult smokers by a fifth to one in five, and more than halved the number of children taking up smoking to under one in fifteen. The Introduction, by the Chief Medical Officer for England, stresses the enormous detrimental effect of tobacco on health, and refers to the real impact which Government policies, including the introduction of smoke free legislation, have had over the past decade. Yet smoking still causes over 80,000 deaths every year and is the leading cause of health inequalities. Smoking-related diseases are said to cost the NHS £2.7bn annually. The Chief Medical Officer proclaims a vision aimed at stopping the inflow of young people recruited as smokers; motivating and assisting every smoker to quit; and protecting families and communities from tobacco-related harm. The Government's broad policy aim is clear.
Among other measures which the Government has taken is the Tobacco Advertising and Promotion Act 2002 which prohibits (subject to some qualification) tobacco advertising. This Act also, by section 8, made it an offence to display in the course of a business tobacco products or their prices in a place where they are offered for sale if the display does not comply with such requirements as may be specified in regulations. Section 21 of the Health Act 2009 inserted by amendment into the 2002 Act new sections 7A-D which will make it an offence, subject to certain exclusions and defences, to display or cause to be displayed tobacco products in a place as defined by regulations. We did not go into the detail of this, but I understand that, when these provisions are in force, it will not be lawful to have tobacco products visibly displayed for retail sale in shops.
Another measure was enacted on 12 th November 2009 by sections 22 and 23 of the Health Act 2009, and the consequent making on 17 th March 2010 of the Protection from Tobacco (Sales from Vending Machines) Regulations 2010, whose effect is to ban, from 1 st October 2011, the sale of tobacco from automatic vending machines. The claimants, Sinclair Collis Limited, a subsidiary of Imperial Tobacco Limited, challenge the relevant provisions of the 2009 Act and the 2010 Regulations contending that they contravene Article 34 of the Treaty on the Functioning of the European Union and Article 1 of Protocol 1 to the European Convention on Human Rights. Mitting J gave the claimants hesitant permission to bring judicial review proceedings against the Secretary of State for Health on these grounds, but refused permission on other grounds.
It is obvious that measures aimed at reducing the incidence of smoking tobacco are likely to damage businesses or individuals who make money out of the manufacture or sale of cigarettes. The ban on the use of automatic tobacco vending machines will obviously affect adversely those whose business it is to supply and service these machines.
Automatic Tobacco Vending Machines
There are approximately 50,000 tobacco vending machines in the United Kingdom, and what is referred to as the tobacco vending machine industry employs directly approximately 550 people with several hundred more employed by suppliers. The claimants own about 20,000 of the vending machines and most of the rest are owned by independent operators, most of whom are represented by the Interested Party in these proceedings, the National Association of Cigarette Machine Operators. Estimated turnover of the industry in 2004 was £434m., although the clear evidence is that it has declined significantly since then. NACMO has estimated that the annual gross margin of the industry is approximately £102m.
The consensus evidence is that about 1% of tobacco sales are through vending machines. Cigarettes from vending machines cost substantially more than cigarettes sold in shops or supermarkets. A vending machine in a public house can provide the publican with an annual royalty of £300-£700. Pubs generally do not have cigarettes for sale over the bar, although they could do so, subject to the regulations about displays. At present, vending machines provide a secure point of sale in hotels, restaurants, pubs, bars, nightclubs and bingo halls. The evidence is that some 98% of these vending machines are in premises which are obliged to restrict or control entry by children.
There is extensive evidence by Kevin Pascall on behalf of the claimants, and by Edward Mair, Rod Bullough, Debbie Corris and Adrian Robinson on behalf of members of NACMO.
The claimants employ 171 people. Mr Pascall's evidence is that tobacco vending by automatic machines represents 97% of their business. They import their tobacco vending machines from manufacturers in Spain and Germany, as do all or most of the other independent suppliers. Various legislation, including the ban on smoking in public places, has reduced sales from vending machines by some 80% and more than 11,000 machines have been removed from the claimants' sites. The prospect of a ban on cigarette vending machines has significantly reduced the importing of the machines and, if the ban is brought into force, that importing will cease. The existing machines will be redundant and worthless and will have to be disposed of at a cost. Mr Pascall says that the intended ban on selling cigarettes from vending machines will put the claimants out of business, causing mass redundancies. He does not believe that any tobacco vending machine operator will survive the intended ban. The witnesses for NACMO tell the same story.
Edward Mair is Chair of NACMO and a partner in Cherwell Tobacco Factors LLP. Rod Bullough is the Northern Chair of NACMO and director of R. Duckworth Limited and R. Duckworth (Blackpool) Limited. Debbie Corris is General Manager of Jim Ingram Vending & Wholesale. Adrian Robinson is Director and Company Secretary of W.H.R. Vending Limited.
Cherwell Tobacco Factors' main business is the supply, maintenance and refilling of tobacco vending machines. They currently supply and service 3,481 sites. They are valuable employers in the small market town of Whitchurch. They have four depots at Worthing, St Albans, Whitchurch and Bathgate in Scotland, and employ more than 120 staff. Their annual turnover is £18. 29m., 87% of it from the tobacco vending business. Mr Mair says that the ban on cigarette vending machines would inevitably lead to the closure of the business.
The primary business of R. Duckworth (Blackpool) Limited is the supply, maintenance and refilling of tobacco vending machines. R. Duckworth Limited has three divisions, one of which, Cumbria Vending, carries on essentially the same business as the Blackpool company. Of the 34 people employed by the Duckworth companies, 19 are directly employed in the tobacco vending business – 15 in Blackpool and 4 with Cumbria Vending. The companies' tobacco business has halved since the ban on smoking in public places was introduced on 1 st July 2007, and the number of sites where the Duckworth companies have machines has reduced from 1,875 in 2005 to 1,004 in 2010. 98% of their sites are in licensed premises. If the ban is brought into force, the companies would be unable to carry on trading. The Blackpool company has no other business. The divisions of R. Duckworth Limited are largely dependent on the profit generated by Cumbria Vending, and would collapse if Cumbria Vending ceased to be viable.
Debbie Corris is General Manager of Jim Ingram Vending & Wholesale, a partnership with two partners aged 75 and 65. It was founded in 1971 as a traditional tobacconist and confectionery shop. Now vending machines are its main business. There were 6 employees. It has 210 sites in and around Kent, far fewer than before the ban on smoking in public places. 201 of these sites are on licensed premises. In the financial year 2010–2011 to August, the business had a gross income of £272,583, of which £165,333 (some 61%) came from vending machines. If the ban comes into effect, it is more than likely that the shop business will have to shut down.
Adrian Robinson is one of 2 directors of W. H. R. Vending Limited. Until recently, the company had one other member of staff who had to leave because of decreasing turnover....
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