Scottish Court Leaves Liquor Industry Needing a Stiff Drink

Court decision paves way for Scottish government to set a minimum price for alcohol

Source: WSJ

By Saabira Chaudhuri

Oct. 21, 2016

The alcohol industry got a major blow on Friday when a long-awaited ruling from Scotland’s appeals court upheld a previous decision that the Scottish government can set a floor on alcohol prices.

Scotland’s Parliament in May 2012 passed the law establishing a 50-pence floor on per-unit alcohol prices but the measure has since been tied up in court after being attacked by the alcohol industry which claims it won’t stem heavy drinking but instead force responsible drinkers to pay more, and also that any such measure is illegal.

The Scotch Whisky Association in July 2012 filed a complaint with the European Commission, saying a pricing floor would “artificially distort trade in the alcoholic drinks market, contrary to EU law.” It also opposed the legislation in Scotland’s highest civil court, Edinburgh’s Court of Session, saying it breached the U.K.’s EU treaty obligations.

But on Friday the Edinburgh court of sessions ruled that Scotland should be allowed to implement a per-unit floor on pricing, commonly known as “minimum unit pricing” or MUP.

“We regret the Court of Session’s ruling in favour of the Scottish Government on minimum unit pricing,” said Scotch Whisky Association head David Frost. “We will study the details of the judgement and consult our members before deciding on next steps, including any possible appeal to the UK Supreme Court.”

While parts of Canada have some form of minimum unit pricing, if Scotland’s ruling goes unchallenged it will become the first country to implement a floor price per unit of alcohol. A handful of countries implement a floor price on alcohol, but it isn’t per unit, allowing people to trade down.

The alcohol industry is concerned that regulation passed in the home of Scotch could set an international precedent that could unleash a wave of regulation and crimp profits, similar to plain-packaging moves in the tobacco industry.

Many countries have been watching the Edinburgh court decision.

Wales-like Scotland a part of the U.K. but with the ability to write many of its own laws-last year began consulting on setting a floor price on alcohol. Ireland has a minimum-unit-pricing law making its way through the legislative process. And Estonia is considering implementing a similar plan.

Friday’s ruling was quickly welcomed by alcohol harm reduction groups in the U.K.

“It’s been troubling to see a powerful section of the alcohol industry using their huge resources to oppose this and put profits before people’s health,” said a spokeswoman for U.K. nonprofit Alcohol Concern. “All the evidence shows that MUP will save thousands of lives, the economy millions and cut alcohol related crime so we look forward to its introduction and hope our Government will follow suit.”