## Facts

- The case concerned the validity of Directive 2001/37/EC, which harmonized Member States’ laws regarding the manufacture, presentation, and sale of tobacco products.
- Swedish Match challenged the European Union’s authority to adopt the directive, arguing it intruded on Member State competence, particularly because of its public health impacts.
- The main legal basis for the directive was Article 95 EC (now Article 114 TFEU), permitting harmonization measures necessary for the internal market’s functioning.
- The directive aimed to remove obstacles to trade in tobacco products and reduce distortions of competition among Member States while also addressing public health concerns.
- Variations in national regulations, such as differences in tobacco labeling, ingredient requirements, and limits on tar, nicotine, and carbon monoxide, were found across the Member States.

## Issues

1. Whether Directive 2001/37/EC was validly adopted under Article 95 EC, having proper regard to the internal market objective.
2. Whether the presence of public health considerations affected the choice of legal basis for the directive.
3. Whether actual or potential differences in national measures justified EU harmonization to remove trade barriers and distortion of competition.
4. Whether the directive’s provisions were appropriate to achieve the intended internal market objectives, without exceeding what was necessary.

## Decision

- The ECJ confirmed that Article 95 EC was a valid legal basis for Directive 2001/37/EC, as the measure was aimed primarily at improving internal market conditions.
- The Court emphasized that, although public health was a relevant consideration, it could not constitute the sole basis for legislative action under Article 95 EC.
- The existence of actual or potential divergences between Member States’ regulations on tobacco products was found sufficient to justify harmonization.
- The Court accepted that the directive’s provisions were appropriate and proportionate for removing trade barriers and aiding the free movement of goods.
- The Court highlighted that its reasoning built on previous case law, distinguishing the circumstances from those in the earlier Tobacco Advertising I case.
- The Court’s judgment clarified that measures under Article 95 EC may incorporate public health concerns, provided they serve the primary aim of improving the internal market.

## Legal Principles

- EU legislation under Article 95 EC requires a real and demonstrable link to the improvement of internal market conditions.
- Public health considerations may inform—but cannot independently justify—harmonization measures based on Article 95 EC.
- The presence of divergent Member State measures likely to hamper trade justifies EU harmonization.
- Proportionality and appropriateness are required: measures must not exceed what is necessary to achieve their internal market objective.
- The reasoning distinguishes permissible internal market harmonization from attempts to base EU action solely on public health grounds.

## Conclusion

The ECJ in Swedish Match confirmed that the EU may validly harmonize national tobacco regulations under Article 95 EC where the primary objective is removing obstacles to trade and market distortions, even if public health is a significant secondary consideration. The decision set a framework for assessing future harmonization measures, balancing internal market aims with public health protection.

Swedish Match AB v Secretary of State for Health (Case C-210/03) [2004] ECR I-11893