Åland-based shipping lines object ban on sales of smokeless tobacco

print this

A decision by the European Commission to ban the sales of smokeless tobacco, generally known by its Swedish name snus, in Swedish territorial waters is bound to lead to unfair distortion of competition between the shipping lines with ferry services to Sweden, says Boris Ekman, the Deputy Managing Director of Viking Line.
      According to the decision, only vessels registered in Sweden would be allowed to sell the Swedish specialty.
      When Sweden joined the EU in 1995 it was allowed to an exception to the EU ban on smokeless tobacco, because consumption of snus is seen as a national tradition.
      Until now, smokeless tobacco has been sold in the duty-free shops on board Viking Line's passenger ships registered in the semi-autonomous Åland Islands.
     
Viking Line has five vessels sailing to Sweden under the Finnish flag and two under the Swedish flag, namely Ålandsfärjan and Cinderella. Both vessels have services between Sweden and Åland.
      The ban also distorts competition in the branch, as for example half of Tallink's Swedish-bound fleet, including Silja Symphony and Silja Festival, are operating under the Swedish flag.
      Next summer, Tallink plans to replace the Silja Festival with the Tallink Galaxy, which sails under the Swedish flag, on the route from Turku to Stockholm via Åland. Currently the vessel operates between Helsinki and Tallinn.
     
Eckerö Line would suffer most from the ban on snus. Its vessels Eckerö and Birka Paradise sail between Åland and Sweden, both servicing mainly Swedish passengers.
      In order to be able to continue the sales of smokeless tobacco, Eckerö Line might have to register its ferries in Sweden, says Björn Blomqvist, the CEO of the Åland-based shipowner.
      Viking Line says that it has not discussed the matter as yet.
      The potential reflagging of Åland-based ships, concomitant with the loss of tax revenues, would hit the economy of Åland municipalities very hard.
      Until today, the tobacco legislation of Åland has permitted the sale of snus in Swedish territorial waters even on board ships registered in Finland.
     
Hence the European Commission has imposed a conditional fine of two million euros on the province of Åland, with the sum growing by EUR 4,000 for each day that the province fails to comply.
      The Province of Åland and particularly Viking Line are still hoping that the European Court of Justice would examine the legitimacy of the EU decision and would eventually end up cancelling the ban.
      The government of Åland, the Landskapsregering, hopes that the Commission would cancel the sanctions imposed on the violation of EU legislation. Otherwise, the province will have to ban the sales of snus on board all ships registered in Åland, at the turn of the year.
      Jan Hanses, the director of legislative affairs at Viking Line, hopes that Landskapsregering would take the snus ban to the European Court of Justice.
      "As the sale of smokeless tobacco is permitted in Sweden, the same right applies to foreign ships as well, at least as long as they are in Swedish territorial waters, according to Ulf Bernitz, professor of European integration law", argues Hanses.


Previously in HS International Edition:
  EU fines Åland over smokeless tobacco (24.10.2007)
  Prison sentence for illegal importation of smokeless tobacco (30.3.2007)
  Customs intercept exceptionally large quantities of smuggled snuff (9.2.2007)

Links:
  Snus (Wikipedia)

Helsingin Sanomat