Vodka vs Whisky

The Scottish government’s plans to introduce minimum unit pricing (MUP) for alcohol suffered a massive blow this morning after the top legal figure in Europe said the policy was “difficult to justify”.

Advocate General Yves Bot, delivering his legal opinion on concerns raised by the Scotch Whisky Association (SWA), said Scotland’s ministers had failed to explain how MUP would be more proportionate than taxation.

He also warned the policy would potentially interfere with free trade of alcohol across Europe.

“Advocate General Bot is of the opinion that such a system risks infringing the principle of the free movement of goods and would only be legal if it could be shown that no other mechanism was capable of achieving the desired result of protecting public health,” his office said in a briefing document.

“In particular, the Advocate General suggests that increasing taxation of alcohol could be an alternative and it would be for the Scottish government to prove that this was not a suitable means of curbing excessive consumption of alcohol.

“He therefore states that ‘a Member State can choose rules imposing a minimum retail price of alcoholic beverages, which restricts trade within the European Union and distorts competition, rather than increased taxation of those products, only on condition that it shows that the measure chosen presents additional advantages or fewer disadvantages by comparison with the alternative measure.”

A Member State can choose rules imposing a minimum retail price of alcoholic beverages only on condition it shows the measure presents advantages by comparison with the alternative measure

The Court of Justice will meet to consider the opinion on six legal issues raised by the case later this year or early next year, with the Inner House of the Court of Session in Edinburgh due to take the verdict into consideration with its own judgment.

However, sources said the decision made it very unlikely the EU would sanction MUP in Scotland, with the court backing the advocate’s rulings in around 70% to 80% of cases.

“This is the opinion of the advocate general and it is important to recognise this is not the final decision,” said an EU source insider. “However, it is a strong indicator of what could happen.”

Bot’s opinion states that: “While it is ultimately for the national court to identify the precise objectives of the measure in question, to examine the merits and disadvantages of an ‘increased taxation’ measure and to ascertain whether that alternative presents a better cost-benefit outcome than the setting of a minimum price, I feel that, having regard to the principle of proportionality, it is difficult to justify the rules at issue, which appear to me to be less consistent and effective than an ‘increased taxation’ measure and may even be perceived as being discriminatory.”

In May 2012 the Scottish Parliament proposed national legislation introducing a 50p per unit minimum price.

The SWA and other organisations in the alcoholic beverage sector challenged the legislation as being incompatible with EU law, claiming it would amount to a restriction on the trade of alcoholic beverages between Scotland and EU Member States and could distort competition between alcohol producers.

Among legal issues raised was EU law that states the price of wine should be determined by normal market forces, which would be undermined by a regulated pricing structure and opponents argued that fiscal methods, such as excise duties on alcoholic beverages, could equally meet the aims of the legislation in a less restrictive manner.

Also see: trade and campaigners react to the news