'Comprehensive win' for Scottish Government on minimum pricing, says expert

Out-Law News | 25 Oct 2016 | 9:26 am | 2 min. read

The Scottish Government's plan to introduce a minimum price per unit of alcohol sold (MPU) has been backed by the country's highest court.

However trade body the Scotch Whisky Association (SWA), which had challenged the policy on the grounds that it breached EU trade laws, has not ruled out an appeal to the UK Supreme Court.

Licensing law expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com, said that the decision by the Inner House of the Court of Session was "a comprehensive win" in the Scottish Government's drive to "challenge Scotland's damaging alcohol related health statistics" by way of minimum pricing.

"Allied parties must doubt the merits of seeking leave to the Supreme Court," she said.

"The court has produced a thorough and balanced judgment which supports the judge at first instance on every point. The appeal judges found that the Lord Ordinary applied the law accurately to the facts which he found demonstrated by the materials before him. The Scottish Government met the test that minimum pricing has a legitimate aim, which is the proportionate protection of life and health, and I find it difficult to see where there would be grounds for appeal," she said.

Legislation to introduce a MUP was passed by the Scottish Parliament in May 2012. The Alcohol (Minimum Pricing) (Scotland) Act prohibits the sale of alcohol below a minimum price, calculated on the basis of the drink's alcoholic content. Scottish ministers drafted regulations setting a 50p MPU in 2013, although this has not yet been introduced due to the ongoing legal proceedings.

The SWA, along with other European wine and spirits trade bodies, began a judicial review challenge of the policy in 2012. Although this was rejected by the Outer House of the Court of Session in May 2013, the Inner House referred the case to the Court of Justice of the European Union (CJEU) on appeal after finding that it "raised questions of European law".

The CJEU referred the case back to the Scottish courts in December 2015. It ruled that although MUP is potentially in breach of EU law as it is "liable to undermine competition by preventing some producers or importers from taking advantage of lower cost prices so as to offer more attractive retail selling prices", the policy may be permitted on public health grounds provided that it is proportionate.

Giving the unanimous opinion of the court Lord Carloway, the Lord President, ruled that the measures proposed by the Scottish Government were in fact proportionate. Simply increasing tax, which had been proposed by the SWA as an alternative measure, would not have the same effect, he said.

"The fundamental problem with an increase in tax is simply that it does not produce a minimum price," the judge said.

"The advantage of the proposed minimum pricing system, so far as protecting health and life is concerned, is that it is linked to the strength of the alcohol … Minimum pricing is targeted at harmful and hazardous drinkers because it is those groups that tend to purchase cheap alcohol; not moderate drinkers who select from higher quality products ... This targeting cannot be achieved by a tax increase directed at low cost products, because EU law will not permit there to be anything other than a uniform rate," he said.

Although the judge acknowledged the "provisional or experimental nature of the legislation", he pointed out that a 'sunset clause' built into the legislation would require the Scottish Government to review the impact of the policy once in force.

Scotland's public health minister, Aileen Campbell, said that MUP was "the most proportionate and effective way to reduce the harm caused by cheap, high strength alcohol".

"We have always been convinced that this policy will save the lives of the many people who die each year from alcohol," she said. "Recently we have seen the publication of yet more statistics which show that alcohol-related deaths remain unacceptably high."

"I'm proud that Scotland has led the way on this public health measure, which other countries are also interested in pursuing and who will also be welcoming [this] ruling," she said.