Out-Law News 3 min. read
03 Sep 2015, 3:47 pm
In a formal opinion on a challenge to the policy, brought by the Scotch Whisky Association (SWA) and other trade bodies, advocate general Yves Bot said that minimum pricing risked infringing EU rules on free movement of goods. Such interference could only be justified if it was proportionate, and if no other mechanism was capable of achieving the desired result.
Bot said that the Scottish Government had not proved that it could reduce excessive alcohol consumption some other way, for example by increasing taxes on alcohol.
"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," he said.
Opinions of advocate generals are not binding on the Court of Justice of the European Union (CJEU), but are followed in the majority of cases. The case will now pass to the CJEU for a formal ruling on questions of EU law raised by Scotland's Court of Session in May 2014.
The Alcohol (Minimum Pricing) (Scotland) Act was passed by the Scottish parliament in May 2012. The Act prohibits the sale of alcohol below a minimum price, calculated on the basis of the drink's alcoholic content. The Scottish ministers drafted regulations setting the minimum price as 50p per unit in 2013; however, this has not yet been introduced due to the ongoing legal proceedings.
The SWA's legal challenge against the policy, which is supported by other European wine and spirits trade bodies, was rejected by the Outer House of the Court of Session in May 2013. In May 2014 the Inner House, which is Scotland's highest civil court, referred the case to the CJEU after finding that it "raised questions of European law".
The advocate general said that EU law did not prevent one member state from introducing minimum pricing "provided that those rules are justified by the objectives of the protection of human health, and in particular the objective of combating alcohol abuse, and do not go beyond what is necessary in order to achieve that objective". However, before it did so, the member state had to be able to show that doing so was a proportionate means of achieving that objective, he said.
"The question that arises is whether the objective of protecting public health pursued by the Scottish authorities could not be attained in a less restrictive and equally effective manner by a fiscal measure," he said. "In other words, would a higher tax on alcoholic beverages enable the same objective to be attainted as rules imposing a minimum price, while being less restrictive of trade?"
"On the assumption that the objective of the rules at issue in the main proceedings is genuinely confined to combating the hazardous and harmful consumption of alcoholic beverages, which it is for the referring court to determine, I consider that it is for those responsible for the drafting of the rules to show that increased taxation is not capable of meeting that targeted objective," he said.
"Like the referring court, I am unable to see how [the] collateral effect of a general increase in taxes [on moderate drinkers] might be seen as negative in the context of combating hazardous or harmful consumption when, in addition, the scientific studies seem to show that hazardous or harmful consumption rises in line with the increase in consumer income while, at the same time, the quantity of the cheapest alcoholic beverages bought per week falls with the increase in the income of hazardous or harmful drinkers," he said.
He said that it would ultimately be for the national court to identify the precise objectives of the Scottish Government's policy, and to weigh up the relative advantages and disadvantages of both a minimum price and an overall increase in tax. However, the former "appear[ed] to me to be less consistent and effective than an 'increased taxation' measure and may even be perceived as being discriminatory", he said.
Both the SWA and the Scottish Government welcomed the opinion, which first minister Nicola Sturgeon said "confirms that minimum unit pricing is not precluded by EU law, but sets out tests that the national court has to apply".
"While we must await the final outcome of this legal process, the Scottish Government remains certain that minimum unit pricing is the right measure for Scotland to reduce the harm that cheap, high-strength alcohol causes our communities," she said.
"In recent weeks, statistics have shown that alcohol-related deaths are rising again and that consumption may be rising again after a period of decline. We believe minimum unit pricing would save hundreds of lives in coming years and we will continue to vigorously make the case for this policy," she said.
"Both sides of the argument seem positive about this opinion," said licensing law expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com. "Ultimately, it will be for the national courts to decide."