THE European Union's top court has dealt a blow to the tobacco industry by approving sweeping new rules that will require plain cigarette packs, ban menthol cigarettes and regulate the growing electronic cigarette market.

Tobacco companies had protested against a 2014 EU directive containing the new rules, calling it disproportionate.

But the European Court of Justice has upheld the directive, arguing it is in line with efforts to fight smoking and protect public health.

The court said it is okay to ban menthol and other flavourings that make tobacco more appealing.

The directive also requires standardised, plain labels that cover at least 65% of all cigarette packs with health warnings.

The rules will require warnings for e-cigarettes, limit their nicotine levels to 20g and restrict advertising and sponsorship by their makers.

The Independent British Vape Trade Association said in a statement that it is disappointed by the ruling and argued it could push some e-cigarette smokers back to tobacco.

Among those welcoming the decision was French health minister Marisol Touraine, who said plain cigarette packs will be required in France starting on May 20.

"It's a victory for public health, a victory in the battle against lobbies, because in the fight against smoking ... the obstacles are numerous," she said.

The EU Commission has been criticised in the past for failing to fully disclose information about its dealings with tobacco lobbyists.

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Marc Firestone, senior vice president at Philip Morris International, which had questioned the directive's legality, said in a statement that the court did not address whether plain packaging is legal or reduces smoking rates.

He said the ruling "reflects the substantial deference that the Court of Justice often shows to the EU institutions".