European court deals blow to minimum alcohol price laws

Scotland and Ireland vow to battle on with policy aimed at curbing problem drinking

Source: FT

by: Mure Dickie in Edinburgh

December 23, 2015

The governments of Scotland and Ireland still hope to impose a minimum price for alcohol, despite a European Court of Justice warning that such a move would be illegal if tax rises could be used instead.

“The Court of Justice considers that the effect of the Scottish legislation is significantly to restrict the market,” said an ECJ ruling on Wednesday.

“A practice such as that adopted in Scotland is not justified where it is possible for health to be protected equally effectively by less restrictive tax measures.”

Tax rises could reduce alcohol use while maintaining fair market competition, the court suggested.

The judgment sets considerable obstacles in the way of the Scottish health policy of imposing a minimum price of 50p per unit of alcohol.

It will now be up to Edinburgh’s Court of Session to decide whether a minimum price is justified, subject to possible appeal to the UK Supreme Court. Ireland has similar plans to control alcohol misuse.

Ministers in Edinburgh and Dublin insist that a minimum price is the best way to address problem drinking.

Shona Robison, Scotland’s health secretary, said: “We maintain that minimum unit pricing would target heavy drinkers. They tend to drink the cheap, high-strength alcohol that will be most affected.”

Leo Varadkar, the Irish health minister, said he, too, remained committed to minimum unit pricing legislation that would make it illegal to sell drinks for below ?0.10 per gram of alcohol.

“We believe [it] is a proportionate measure and the only measure that would effectively target the widespread access to alcohol that is very cheap relative to its strength,” said Mr Varadkar, citing research by Sheffield university.

Implementation of Mr Varadkar’s plans will depend in part on whether he retains his role after a general election expected early in 2016 – and would be likely to face similar legal challenge to the Scottish legislation.

The Scottish parliament approved the minimum price in May 2012 with a majority of 86 votes to one.

But implementation has been suspended because of a legal challenge from the Scotch Whisky Association and other alcohol lobby groups who argue it would have no effect on problem drinking and would encourage trade discrimination.

Graeme Young of the law firm CMS, said the ECJ had set a “high hurdle” for Scottish judges to back the measure.

“The test that they are being asked to apply is an extremely stringent one,” he said. “The scales they have been given to balance these factors on by the court are heavily weighted against minimum pricing being an acceptable measure.”

Angus MacCulloch, senior lecturer at Lancaster University Law School, said the ECJ was offering a clear direction towards use of tax measures instead, but that Scottish judges might still decide a minimum price was justified. “There is still a lot to play for,” he said.

Health campaigners have been scathing about the drinks industry’s attempts to block a policy they say would be much more effective at cutting consumption than further increases in tax.

But sector lobby groups said the ECJ’s decision should prompt a rethink.

“This ruling opens the way to moving the debate on and allowing us to address alcohol misuse with practical measures that actually work,” said David Frost, Scotch Whisky Association chief executive.