A Sobering Moment for Minimum Unit Pricing

The first indication of the European Court’s position on minimum unit pricing for alcohol, or MUP, has been issued, with the legislation at risk of breaching European Law prohibiting the setting of minimum prices.

In 2012 the Scottish parliament approved legislation imposing a minimum price of 50p per unit on alcoholic beverages by a huge majority of 86 votes. The implementation of the measures has, however, been delayed by a legal challenge by the Scottish Whisky Association and others, which is due to come before the European Court of Justice (ECJ) in March 2016 arising out of the potentially anti-competitive nature of the MUP.

The Opinion of the Advocate General Yves Bot (AG), although not a ruling, is designed to assist the judges assigned to the case with their deliberations, and therefore provides a useful insight into how senior legal figures at the ECJ are likely to consider the case.

In considering the matter the AG looked at two key questions, the first of which was whether MUP would be a restriction on trade contrary to the EU Treaty, which prohibits any national rule that effectively places a quantitative restriction on trade between member states.   The AG concluded that MUP would fall within the prohibition, as low cost imported products would no longer be able to exploit their competitive price advantage to assist them in accessing the Scottish market.

Nonetheless, the restriction in the EU Treaty is paired with an exception that allows restrictive measures to be adopted for the protection of public health. Having decided that MUP would be a breach of the EU Treaty, the AG therefore turned to the question of whether MUP would be a necessary and proportionate means of achieving the greater protection of public health. In doing so he compared MUP to alternatives, more particularly increased taxation on alcoholic beverages, and concluded that the policy could only be proportionate if other less restrictive measures such as higher duties could not achieve the policy aim.

Not only Scottish legislators and the alcoholic drinks industry but distributors of goods (and those who supply them) will no doubt be tuning into the ECJ’s final decision on the matter with great interest as, depending on the conclusion, it could have severe implications on the interpretation of this EU Law.

If you have any specific queries on the effects that the ECJ’s forthcoming ruling could have on you or possibly your business, then please feel free to contact me via email at john.pickervance@forbessolicitors.co.uk, via our Contact Form or by calling on 0800 689 3206.

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