Minimum Unit Pricing
In May 2012, the Scottish Government passed a law requiring all alcohol sold in Scotland to be sold at no less than 50p (0.63€) per unit (a UK unit of alcohol is 8g or 10ml).
The Scottish Government states that the minimum pricing aims to reduce alcohol consumption across the Scottish population to improve public health and attain social benefits in the areas of crime, public services, productivity and the economy as a whole. In particular, it aims to target a reduction in consumption of cheaper alcohol products relative to their strength because the evidence shows that this type of product is more likely to be favoured by hazardous and harmful drinkers, and they are likely to benefit most from a reduction in alcohol-related harms.
According to the Scottish Government, minimum pricing is a key part of a wider strategy (“Changing Scotland’s Relationship with Alcohol: A Framework for Action”, published in 2009) which sets out over 40 measures aimed at addressing alcohol-related harm and is closely aligned with the World Health Organisation’s Global strategy to reduce harmful use of alcohol.
Under the EU legislation, the Scottish Government was obliged to notify the Commission about the draft legislation, which was done on 25 June 2012. Under the TRIS notification system, the Commission and Member States had then 3 months to send comments or detailed opinion. Detailed Opinions have been received from the Commission, Bulgaria, Spain, France, Italy and Portugal which have de facto extended the standstill period to 27 December 2012. After this deadline, Scotland could have implemented the draft legislation, but decided to wait for the outcome of a court actions introduced by SWA, spiritsEUROPE and CEEV which is still pending at the UK Supreme Court (appeal introduced end of November 2016 - see details below).
IMPLICATIONS AND LEGALITY
Statistics reveal that alcohol consumption and alcohol-related harm have been falling in Scotland, but the Scottish Government has decided to press ahead with its plans, despite the fact their own figures show 73% of alcohol sold in the “off trade” will have to go up in price, and that the measure will not decrease in any way the minority proportion of the population who abuse alcohol.
In addition, the introduction of a minimum unit price of alcohol in Scotland will negatively affect numerous products from all alcoholic drink categories exported from Europe to Scotland for retail sale there, therefore acting as a trade barrier within the EU.
EU law: Minimum Unit Pricing is contrary to article 34 of the Treaty although Article 36 provides an exception for such measures for the purpose of the protection of public health. However the Scottish Government would need to show that minimum pricing is necessary and proportionate, and that there are no other less trade restrictive means of achieving the same objective.
International Trade Law: Article III of the General Agreement on Tariffs & Trade (GATT), now part of the 1994 Agreement setting up the World Trade Organisation (WTO), establishes a number of principles on the treatment of imported products, broadly in line with the rules under the EU treaty.
spiritsEUROPE fully shares the objective of reducing alcohol-related harm and are fully committed to promoting responsible consumption and discouraging excessive alcohol use. spiritsEUROPE works hard with national administrations and other stakeholders throughout the Union in addressing alcohol-related harm through campaigns and initiatives targeted at those who are most risk (all campaigns available at www.drinksinitiatives.eu). However, we object to the Scottish Government’s proposed method of reaching the objective of harm reduction through MUP because it:
- represents an illegal barrier to trade
- will discriminate between companies in the market
- will affect the vast majority of people who do not abuse alcohol in any way
- will not address the harmful drinking problem it sets out to solve - the Scottish government’s own impact assessment admits as much,
- will set a potentially dangerous precedent for third countries to block European products from entering their markets.
Actions & FINAL DECISION
spiritsEUROPE is concerned that other countries are likely to adopt measures similar to MUP and use “protection of health” as justification to block imported products. Such ‘copycat’ measures would be disastrous for the European drinks industry, the single largest agro-food export of the EU.
spiritsEUROPE has joined the Scotch Whisky Association (SWA) and the Comité des Entreprises Vin (CEEV) in a legal action in Scotland to contest the legality of the proposed measures. Unfortunately, in the decision published on 3 May 2013, Lord Doherty has refused the petition by the Scotch Whisky Association, spiritsEUROPE and CEEV, holding that the (MUP) Act was not outside the legislative competence of the Scottish Parliament; and that the proposed Order setting a minimum price per unit of alcohol was within devolved competence and within the powers of the Scottish Ministers. spiritsEUROPE did appeal the decision together with SWA (see press release) and 30 April 2014, the Scottish Appeal Court decided the MUP case should be referred to the Court of Justice of the European Union (ECJ).
On 3 September 2015, the Advocate General of the ECJ issued his opinion on Minimum Unit Pricing of alcohol. We welcome the Advocate General’s opinion. The opinion encourages us in our long-held view that MUP is neither proportionate nor necessary, and is, consequently, illegal under EU law. We welcome the statement of this important principle at European Union level since it affects every Member State.
On 23 December 2015, the ECJ published its ruling following the Opinion of the Advocate General: the Scottish legislation introducing a minimum price per unit of alcohol is contrary to EU law if less restrictive tax measures can be introduced. A tax measure might provide additional benefits and a broader response to the objective of combating alcohol misuse
On 21 October 2016, the Scottish Court issued a final judgment confirming the legality of the draft legislation in favour of the introduction of a Minimum Unit Pricing in Scotland. We have analysed the opinion of the Court of Session and we have decided on 18 November 2016, together with our co-plaintiffs - the Scotch Whisky Association and Comité Vins - to appeal the Scottish Court decision to UK Supreme Court. On 15 November 2017, the Supreme Court decided in favour of the legality of MUP in Scotland. spiritsEUROPE regrets the UK Supreme Court ruling on MUP, which we believe is inconsistent with the Court of Justice’s ruling in this case and its wider jurisprudence. We remain convinced there are more appropriate, proportionate and effective responses to tackle harmful use of beer, wine and spirits drinks. We nevertheless accept that MUP will now be introduced in Scotland in May 2018 (50p/unit), and hope to see an objective assessment of its impact both on the harmful use of alcohol and on the ability of cheaper imports to compete in the Scottish market. Indeed, the legislation contains what is known as a "sunset clause". This means that it will expire after the sixth year of implementation unless the Scottish Parliament votes for it to continue. To inform this decision there is a ‘review clause’ requiring that the Minister presents a review report to parliament on the impact of MUP after five years of its operation(NHS - Evaluation of Minimum Unit Pricing).
This decision sets an unwelcome precedent for fair competition between alcohol beverage producers and for the proper functioning of the internal market. The same is true for third country barriers to our European products, resulting in a very negative impact on one of the most valuable agri-food exports of the EU.
We are determined to continue the fight against irresponsible drinking which is a blight upon our society and sector. Fortunately, there are signs of improvement not only in Scotland, but also in other EU countries. These positive trends only fuel the commitment of our sector to work at local level with all willing parties to increase awareness of the dangers associated with harmful drinking, and to promote responsible attitudes to drinking, especially among those most at risk.