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Understanding Minimum Alcohol Pricing in Scotland

Few debates invite input from parties in as many sectors as the The Alcohol (Minimum Pricing) (Scotland) Act 2012 (2012 Act). In recent years arguments have been presented for the introduction of a minimum alcohol price (MPU), and to replace the policy entirely.

The latest judgement came pre-Christmas and will continue the debate. The Scottish government’s plan to introduce a minimum charge of 50p per unit of alcohol could, according to a recent ruling, violate EU law by restricting the free movement of goods.

Initial reports show that the European Court of Justice has given a ruling that this policy could breach the free-trade laws applicable throughout the EU. However, the Court did also say that the policy could be justified under certain circumstances – so now it’s back for the Scottish Courts to decide.

The alternatives…

If minimum pricing policy can be seen to support the health targets that the Scottish government have set more effectively than taxation increases across the board, the Scottish Government may still be able to bring in the legislation without contravening EU law.
Alternatively, and some parties favour this approach, taxation changes could tackle the issue. Opponents of the minimum pricing policy, including those in the EU courts, believe this could be a more desirable solution. Increasing taxes would also increase the cost of alcohol for consumers, but for retailers the market would remain more competitive.

Although larger retailers are likely to support the competitive edge tax could give them, smaller retailers would be likely to suffer in terms of margins and profits, over big retailers. It could push them out of the market altogether, ultimately making it less competitive.
Some, including health professionals, also believe that higher taxes will fail to limit the volume of cheap strong alcohol available to individuals and fail to fulfil the initial aim of safeguarding the nation’s health.

The next step

The ECJ have returned the case to the Scottish Civil courts. This means the recent ECJ judgement is not final, and the law could still pass. The move is not yet seen as illegal, and although it may need a bit of tweaking, the policy could be enforced.

The Scottish Civil courts judgement will not be swift, as it seems inevitable that the case will be appealed by whichever side is unsuccessful, conceivably seeing it go all the way to the UK Supreme Court. During this process the courts will need to consider whether or not the policy would be disproportionate and unjustified in terms of individual retailers and free trade within the EU member state. And of course we shouldn’t lose sight of the fact that, while the current challenge was brought by domestic interests, parties from other EU member states also have an eye on what is happening. Expect this one to run and run!

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