A retailers’ representative group has lost a High Court challenge to a new licensing fee of up to €1,800 for selling cigarettes, tobacco and nicotine products.
The group claimed the figure for the fee was “plucked out of the air” under the tenure of previous health minister Stephen Donnelly, who in 2024 introduced regulations for the new fee system under the Public Health (Tobacco Products and Nicotine Inhaling Products) Act 2023.
Mr Justice Rory Mulcahy ruled the public health nature of the Act entirely supports the position that the minister was entitled to exercise his discretion in setting fees in a manner that promoted public health.
He rejected the argument that the licensing regime for tobacco products should necessarily carry with it the implication that the fees charged should be confined to covering the cost of the scheme, as the group claimed.
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The new regime, which comes into operation next February, hiked up the old one-off €50 registration fee to retailers for selling the products.
Under the new system, retailers will have to pay a total fee of €1,800 to sell tobacco products and nicotine inhaling products, or €1,000 for tobacco alone or €800 for nicotine products alone.
The fee is payable every time the licence is renewed unlike the old scheme, which just had to be paid once.
The cost of any licence cannot be passed on to consumers as retailers have no discretion as to the price they charge for tobacco products.
The Convenience Stores & Newsagents Association (CSNA), which has about 1,350 members across 1,500 stores, brought a High Court judicial review challenge seeking the quashing of the 2024 regulations.
The retailers claimed the minister acted unlawfully and outside the powers of the 2023 Act by disregarding the purpose of part of it. He then unreasonably and irrationally promulgated the 2024 regulations, which could never achieve that unlawful purpose, they said.
They also said the minister set the fees in a manner that was arbitrary and capricious and without any evidential or methodological basis or connection to the licensing regime being established.
They further claimed it will have a disproportionate economic impact on smaller retailers, which amounts to an arbitrary and capricious distinction not authorised by the Act.
The minister disputed the claims and opposed the challenge.
In a judgment refusing reliefs sought by the CSNA, Mr Justice Rory Mulcahy said there was simply no evidence to support the contention that the minister intended, or even considered, that the regulations would, as claimed by the CSNA, cause a reduction in the number of outlets selling tobacco as only larger retailers could afford the fees.
There was nothing in a briefing document provided to the minister, on which the CSNA relied, suggesting such a purpose, he said.
By reference to that same briefing document, the dominant purpose of the minister in imposing fees at the level he did was to set a fee that reflected the “harmful nature of the product in a manner consistent with a comparable product, alcohol,” he said.
A consequence of doing so was that this might discourage the sale of tobacco by some retailers but that did not render the regulations unlawful, he said.
The judge also said that even if the minister’s primary purpose was to achieve such disincentivisation of the sale of tobacco, this falls far short of establishing that the regulations are, therefore, irrational as incapable of having the effect intended.
