A EUROPEAN court has condemned the French government's policy of fixing minimum retail prices for cigarettes.

The Court of Justice of the European Union said the practice - which imposes a €5.10 minimum for a pack of 20 cigarettes - was anti-competitive.

It said the minimum price "undermines the freedom of manufacturers and importers to determine the retail selling prices of their products".

The court said the French government had every right to introduce measures to combat smoking - however this should be done through harsher taxes on cigarettes and not on price-fixing.