EU takes France to court to overturn minimum cigarette price

The EU executive took France to court Wednesday to try and overturn minimum French retail prices for cigarettes.

It said a fixed price limit only benefits manufacturers by safeguarding their profit margins and breaks EU law because it distorts the market.

"The setting, by the public authorities, of such prices inevitably has the effect of limiting the freedom of producers and importers to determine their selling prices," it said.

If the government wanted to prevent people smoking, it would be better off increasing the tax it charges on tobacco, the European Commission said.

The EU backed off similar legal action against Belgium when it responded to a July 2006 EU request and brought its law in line with European rules, reports AP.

The European Court of Justice can force France to change national law and ultimately impose fines.