ORDER OF THE VICE-PRESIDENT OF THE GENERAL COURT

2 February 2023 (*)

(Interim relief – Public health – Withdrawal of certain exemptions for heated tobacco products – Application for interim measures – No urgency)

In Case T‑706/22 R,

Nicoventures Trading Ltd, established in London (United Kingdom), and the other applicants whose names are listed in the annex, (1) represented by L. Van den Hende, M. Schonberg, J. Penz-Evren and P. Wytinck, lawyers,

applicants,

European Commission, represented by H. van Vliet, A. Becker and F. van Schaik, acting as Agents,

defendant,

THE VICE-PRESIDENT OF THE GENERAL COURT

makes the following

By their application on the basis of Articles 278 and 279 TFEU, the applicants, Nicoventures Trading Ltd and the other legal persons whose names are listed in the annex, seek, first, in essence, the suspension of operation of Commission Delegated Directive (EU) 2022/2100 of 29 June 2022 amending Directive 2014/40/EU of the European Parliament and of the Council as regards the withdrawal of certain exemptions in respect of heated tobacco products (OJ 2022 L 283, p. 4) and, second, the grant of any other interim measures as appropriate.

Background to the dispute, procedure and forms of order of the parties

The British American Tobacco group (‘the BAT Group’), to which the applicants belong, is a global producer, inter alia, of heated tobacco products. One of the applicants, Nicoventures Trading, was established in 2011 to focus exclusively on the development and commercialisation of innovative non-combustible products, which include heated tobacco products. It sells BAT Group heated tobacco products to other companies in the group, including the other applicants. The latter distribute the products of Nicoventures Trading on the markets of 14 Member States.

Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products and repealing Directive 2001/37/EC (OJ 2014 L 127, p. 1) regulates in particular the placing on the market of tobacco products.

Article 7(1) and (7) of Directive 2014/40 provides that Member States are to prohibit the placing on the market of tobacco products with a characterising flavour and of those containing flavourings in any of their components. Article 7(12) of that directive exempts tobacco products other than cigarettes and roll-your-own tobacco from the prohibitions laid down in paragraphs 1 and 7 of that article. In addition, Article 7(12) of that directive states that the European Commission is to adopt delegated acts to withdraw that exemption from a particular product category if there is a substantial change of circumstances as established in a report drawn up by the Commission.

On 15 June 2022, the Commission, in accordance with Directive 2014/40, published a report establishing a substantial change of circumstances for heated tobacco products.

Following that report, the Commission adopted Delegated Directive 2022/2100 on 29 June 2022. Article 1 of that directive amended Directive 2014/40, including Article 7(12) thereof. Heated tobacco products are now no longer exempt from the prohibitions related to flavourings that are set out in Article 7(1) and (7) of Directive 2014/40.

By an action lodged at the Court Registry on 16 November 2022, the applicants seek the annulment of Delegated Directive 2022/2100.

By separate document lodged at the Court Registry on the same date, the applicants submitted an application for interim measures, in which they claim that the judge hearing the application for interim measures should:

–order, pursuant to Article 278 TFEU, the suspension of operation of Delegated Directive 2022/2100 in its entirety until the Court has given judgment in the main proceedings;

–in the alternative, order the suspension of operation of Delegated Directive 2022/2100 to the extent that it withdraws the exemption for heated tobacco products provided for in Article 7(12) of Directive 2014/40;

–order, pursuant to Article 279 TFEU, any other interim measures as appropriate;

–order the Commission to pay the costs.

The Commission lodged observations on 5 December 2022 in which it contends that the judge hearing the application for interim measures should:

–dismiss the application for interim relief;

–reserve the costs.

Law

It is apparent from reading Articles 278 and 279 TFEU together with Article 256(1) TFEU that the judge hearing an application for interim measures may, if he or she considers that the circumstances so require, order that the operation of a measure challenged before the General Court be suspended or prescribe any necessary interim measures, pursuant to Article 156 of the Rules of Procedure of the General Court. Nevertheless, Article 278 TFEU establishes the principle that actions do not have suspensory effect, since acts adopted by the institutions of the European Union are presumed to be lawful. It is therefore only exceptionally that the judge hearing an application for interim measures may order the suspension of operation of an act challenged before the General Court or prescribe any interim measures (see order of 19 July 2016, Belgium v Commission, T‑131/16 R, EU:T:2016:427, paragraph 12 and the case-law cited).

Article 156(4) of the Rules of Procedure provides that applications for interim measures must ‘state the subject matter of the proceedings, the circumstances giving rise to urgency and the pleas of fact and law establishing a prima facie case for the interim measure applied for’.

The judge hearing an application for interim relief may order suspension of operation of an act and other interim measures if it is established that such an order is justified, prima facie, in fact and in law, and that it is urgent in so far as, in order to avoid serious and irreparable harm to the applicant’s interests, it must be made and produce its effects before a decision is reached in the main proceedings. Those conditions are cumulative, and consequently an application for interim measures must be dismissed if any one of them is not satisfied. The judge hearing an application for interim relief is also to undertake, when necessary, a weighing of the competing interests (see order of 2 March 2016, Evonik Degussa v Commission, C‑162/15 P-R, EU:C:2016:142, paragraph 21 and the case-law cited).

In the context of that overall examination, the judge hearing the application for interim measures enjoys a broad discretion and is free to determine, having regard to the particular circumstances of the case, the manner and order in which those various conditions are to be examined, there being no rule of law imposing a pre‑established scheme of analysis within which the need to order interim measures must be assessed (see order of 19 July 2012, Akhras v Council, C‑110/12 P(R), not published, EU:C:2012:507, paragraph 23 and the case-law cited).

Having regard to the material in the case file, the Vice-President of the General Court considers that he has all the information necessary to rule on this application for interim measures, without there being any need first to hear oral argument from the parties.

In the present case, it is appropriate to examine first whether the condition relating to urgency is satisfied.

In order to determine whether the interim measures sought are urgent, it should be noted that the purpose of the procedure for interim relief is to guarantee the full effectiveness of the future final decision, in order to prevent a lacuna in the legal protection afforded by the EU judicature. To attain that objective, urgency must in general be assessed in the light of the need of an interlocutory order to avoid serious and irreparable damage to the party requesting the interim measure. That party must demonstrate that it cannot await the outcome of the main proceedings without suffering serious and irreparable damage (see order of 14 January 2016, AGC Glass Europe and Others v Commission, C‑517/15 P-R, EU:C:2016:21, paragraph 27 and the case-law cited).

In the present case, the applicants claim that Delegated Directive 2022/2100 will cause them to lose their existing market position and customer base.

It must be held that such damage is financial in nature (see, to that effect, order of 30 April 2010, Xeda International v Commission, T‑71/10 R, EU:T:2010:173, paragraph 41 and the case-law cited). It is settled case-law that where the harm referred to is of a financial nature, the interim measures sought are justified where, in the absence of those measures, the party requesting them would be in a position that would imperil its financial viability before final judgment is given in the main action, or where its market share would be affected substantially in the light, inter alia, of the size and turnover of its undertaking and, as appropriate, the characteristics of the group to which it belongs (see order of 12 June 2014, Commission v Rusal Armenal, C‑21/14 P-R, EU:C:2014:1749, paragraph 46 and the case-law cited).

It is also settled case-law that, in order to determine whether all the conditions referred to in paragraph 18 above are fulfilled, the judge hearing the application for interim measures must have specific and precise information, supported by detailed, certified documentary evidence, which shows the situation in which the party seeking the interim measures finds itself and enables the probable consequences, should the measures sought not be granted, to be assessed. It follows that that party, in particular when it relies on the occurrence of financial damage, must produce, with supporting documentation, an accurate overall picture of its financial situation (see order of 12 March 2021, Ciano Trading & Services CT & S and Others v Commission, T‑45/21 R, not published, EU:T:2021:131, paragraph 33 and the case-law cited).

In addition, the essential elements of fact and law enabling the judge hearing the application for the interim measures to establish such a picture must be apparent from the text of the application for interim measures itself, since that text must by itself enable the defendant to prepare its observations and the judge hearing the application for interim measures to rule on it, where necessary, without other supporting information. In the light of the speed which characterises, by their very nature, proceedings for interim measures, the party seeking interim measures may reasonably be required to submit, save in exceptional cases, as soon as its application is submitted, all the available evidence in support of that application, so that the judge hearing the application for interim measures may assess, on that basis, the merits of that application (see order of 20 April 2012, Fapricela v Commission, C‑507/11 P(R), not published, EU:C:2012:231, paragraphs 52 and 53 and the case-law cited).

It should therefore be determined whether the criteria established by the case-law referred to in paragraph 18 above for demonstrating the existence of financial harm amounting to serious and irreparable damage are satisfied.

First, the applicants do not claim that in the absence of the interim measures sought they would be in a position that would imperil their financial viability before final judgment is given in the main action. They assert at most that Delegated Directive 2022/2100 will lead to a [confidential] loss of an opportunity to make a profit.

Second, they do not provide evidence, taking account inter alia of the characteristics of the group to which they belong, that their market share would be affected substantially, for the purposes of the case-law cited in paragraph 18 above.

In that regard, the applicants submit that their position on the market for heated tobacco products will be affected [confidential]. They state that the BAT Group has a share of [confidential] of the EU market for heated tobacco products and that [confidential] is comprised of flavoured heated tobacco products [confidential]. They add that [confidential] of the BAT Group’s heated tobacco product portfolio in the European Union is oriented towards the newly restricted products. They submit lastly that the BAT Group has a market share of [confidential] in the European Union for flavoured heated tobacco products. They thus conclude that Delegated Directive 2022/2100 will cause the BAT Group to lose its existing market position and customer base.

First of all, it should be observed that the applicants base themselves on the market for heated tobacco products in general in order to claim a loss of market share.

Next, it must be observed that the applicants essentially refer, in support of their assertions, to the statement of 11 November 2022 by the Category Director of heated tobacco products at Nicoventures Trading (‘the statement of 11 November 2022’). However, it should be borne in mind that, in order to assess the probative value of such a document, it is first necessary to check the plausibility and truthfulness of the information it contains. In that regard, account must be taken, inter alia, of the origin of the document, the circumstances of its preparation, the party to whom it is addressed, and of whether it seems from its content to be sensible and reliable (see judgment of 4 July 2018, Deluxe Entertainment Services Group v EUIPO (deluxe), T‑222/14 RENV, not published, EU:T:2018:402, paragraph 91 and the case-law cited).

Since the statement of 11 November 2022 does not originate from a third party, but from a person connected to one of the applicants through an employment relationship, it cannot by itself constitute sufficient evidence of financial harm. Consequently, it must be treated as merely indicative and needs to be corroborated by other evidence (see, to that effect, judgment of 4 July 2018, deluxe, T‑222/14 RENV, not published, EU:T:2018:402, paragraph 92 and the case-law cited).

In the present case, it must be pointed out that the statement of 11 November 2022, although it contains the same data provided by the applicants in their pleadings, as set out in paragraph 24 above, is not corroborated by other probative evidence. That statement refers to an internal document in the annex that presents figures, in the form of a table produced by the author of the statement herself, based on her review of BAT Group shipment data for heated tobacco products in the European Union and various reports, which merely show that over the first nine months of 2022, [confidential] of the BAT Group’s shipments were flavoured products. The applicants therefore do not adduce any conclusive evidence in support of their assertions and, specifically, in support of those relating to their market share held for heated tobacco products.

Lastly, it should be borne in mind that Delegated Directive 2022/2100 is a measure of general application which prohibits the placing on the market of all flavoured heated tobacco products, that is to say, also of those sold by the applicants’ competitors. Accordingly, the end of the exemption for that type of product will not automatically lead to a loss or substantial alteration of market share for the applicants given, first, that their competitors will not be able to sell those products either and, second, that the applicants also market a wide range of heated tobacco products aside from the newly restricted products. As the Commission states, customers purchasing flavoured heated tobacco products from the applicants may well therefore switch to their non-flavoured heated tobacco products or to other tobacco products which they place on the market and in which they claim to have heavily invested, as set out in paragraphs 32 to 34 below. That finding would remain valid even if it were demonstrated, quod non, that the proportion of the BAT Group’s portfolio of heated tobacco products within the European Union oriented towards the newly restricted products was at a level of [confidential]. Furthermore, it has to be noted that Delegated Directive 2022/2100, adopted on 29 June 2022, provides that Member States are to apply its provisions from 23 October 2023. The applicants therefore have a significant period of time in which to adjust their commercial offering to the new rules.

It follows from the foregoing that the applicants have failed to demonstrate that their market share would be substantially affected, for the purposes of the case-law cited in paragraph 18 above.

The other arguments put forward by the applicants likewise do not demonstrate that the criteria established by the case-law for proving the existence of financial harm are satisfied.

In the first place, the applicants assert, as is apparent from the statement of 11 November 2022, that the companies in the BAT Group, to which they belong, have made investments in the development, manufacture and commercialisation of alternative products with a reduced risk profile, which include heated tobacco products, that amount to approximately [confidential]. They add that the development of the heated tobacco product marketed under the BAT Group’s glo brand involved more than 100 experts across five continents, including scientists, engineers, designers, tobacco experts and toxicologists. They conclude thereby that Delegated Directive 2022/2100 will undermine the [confidential] thus invested.

34First, although the applicants claim that Delegated Directive 2022/2100 will cause the loss of their investments by prohibiting the placing on the EU market of certain tobacco products, they do not specify whether the funds were invested for the EU market or whether they were investments on a global scale. Nor is it possible to establish from the documents provided in support of their assertions, graphs and a press release, that the sums in question were invested for the European Union. Similarly, the applicants state that the BAT Group’s electronic tobacco heating devices are placed on the market in the European Union under the glo trade mark. However, they assert at the same time that those devices have required the involvement of experts across five continents. It thus follows that the human resource investments at issue in the present case do not appear to be limited to the EU market.

35Second, the applicants themselves state that the amounts which they refer to, on the assumption that they are established to a sufficient degree by the exclusively internal documents which they produce, concern all investments made in the development, manufacture and commercialisation of alternative products with a reduced risk profile, which comprise heated tobacco products, vapour products and modern oral products, including tobacco-free nicotine pouches. Accordingly, not only do the figures not relate solely to heated tobacco products, but, moreover, they do not concern only the heated tobacco products covered by the prohibitions in Article 7(1) and (7) of Directive 2014/40, that is to say, those containing flavourings.

36In the second place, the applicants claim that Delegated Directive 2022/2100 will cause them to lose their existing customer base, which is allegedly damaging in a highly regulated sector such as that in the present case. In that regard, it is sufficient to observe, as stated in paragraph 29 above, that since the applicants market several types of heated tobacco products and since their competitors will also be unable to sell such flavoured products, it is not established that they will lose their customer base, which will be able to switch to other products featuring in their range.

37For the sake of completeness, it should be observed that the Court of Justice has already held, with regard to the human medicinal products market, that in the context of a market which is highly regulated and subject to rapid intervention by the competent authorities when public health risks become apparent, for reasons which cannot always be foreseen, it is for the undertakings concerned, if they are not to bear themselves the loss resulting from such intervention, to protect themselves against its consequences by adopting an appropriate policy (see, to that effect, order of 11 April 2001, Commission v Bruno Farmaceutici and Others, C‑474/00 P(R), EU:C:2001:219, paragraphs 108 and 109).

38In the present case, as stated in paragraph 4 above, Article 7(12) of Directive 2014/40, before its amendment by Delegated Directive 2022/2100, authorised the Commission to adopt delegated acts to withdraw the exemption from the prohibitions set out in Article 7(1) and (7) of that directive from a particular product category if there is a substantial change of circumstances as established in a Commission report.

39Directive 2014/40 therefore provided for a situation in which that exemption could be withdrawn in respect of other products containing flavourings. In any event, the Commission published a report on 15 June 2022, establishing, in accordance with Directive 2014/40, a substantial change of circumstances as regards heated tobacco products. The possibility of a withdrawal of the exemption for heated tobacco products had therefore existed since Directive 2014/40 and, at the very least, since the publication of the abovementioned report.

40On that point, it is settled case-law that when suspension of operation of an EU act is sought, the grant of the interim measures requested is justified only where the act at issue constitutes the decisive cause of the alleged serious and irreparable damage. In that context, it has been held that that damage must result solely from the effects produced by the act at issue and not from a lack of diligence on the part of the party which sought the interim measure. According to that case-law, if it has not demonstrated the full level of diligence that ought to be demonstrated by a prudent and well-informed undertaking, that party must bear even harm which it claims is liable to jeopardise its existence or to alter irrevocably its position on the market (see order of 11 November 2013, CSF v Commission, T‑337/13 R, not published, EU:T:2013:599, paragraph 32 and the case-law cited).

41It must be stated that the applicants do not describe any steps that they might have taken in order to protect themselves against the risks associated with a possible withdrawal of the exemption accorded to heated tobacco products until the adoption of Delegated Directive 2022/2100.

42It follows from all the foregoing that the applicants have not demonstrated the existence of serious and irreparable damage. Consequently, this application for interim measures must be dismissed for lack of urgency, without it being necessary to rule on whether there is a prima facie case or to weigh up the interests involved.

43Pursuant to Article 158(5) of the Rules of Procedure, the costs should be reserved.

On those grounds,

THE VICE-PRESIDENT OF THE GENERAL COURT

hereby orders:

1.The application for interim measures is dismissed.

2.The costs are reserved.

Luxembourg, 2 February 2023.

Registrar

Vice-President

—

Language of the case: English.

The list of the other applicants is annexed only to the version sent to the parties.