Supreme Court upholds Scotland's alcohol minimum price law

Holyrood was acting within its powers when it passed the law providing for a minimum selling price for alcohol, the UK Supreme Court ruled today.

Seven judges unanimously dismissed an appeal by The Scotch Whisky Association and other alcohol producer organisations against the Court of Session's decision, following a ruling on points of law by the EU Court of Justice, that the legislation did not infringe EU law.

It means that the way is now clear for the Scottish Government to introduce its proposed threshold of 50p per unit of alcohol, set under the Alcohol (Minimum Pricing) (Scotland) Act 2012.

The SWA based its challenge on article 34 of the Treaty on the Functioning of the European Union, and the Common Agricultural Policy set out in article 39 and the Regulation establishing a Common Organisation of the Markets in agricultural products, which include wine.

Lord Neuberger, Lady Hale, Lord Mance, Lord Kerr, Lord Sumption, Lord Reed and Lord Hodge agreed that minimum pricing was a proportionate means of achieving a legitimate aim, and that the 2012 Act did not breach EU law and was therefore within the powers of the Scottish Parliament.

Lord Mance, with whom the other Justices agreed, said that in light of the CJEU ruling, the national court was bound to examine objectively whether it might reasonably be concluded from the evidence submitted by the Scottish Government that the means chosen were appropriate for the attainment of the objectives pursued and whether it was possible to attain those objectives by measures that were less restrictive of the free movement of goods and of the regulation.

He pointed out that the aim is not that alcohol consumption be eradicated or that its costs should be made prohibitive for drinkers, but "to strike at alcohol misuse and overconsumption manifesting themselves in particular in the health and social problems suffered by those in poverty in deprived communities".

The judge rejected the appellants’ submission that an excise or tax would be a less restrictive and equally effective way of achieving the Government’s objectives. While the court would accept, contrary to the view on which the courts below proceeded, that the relevant EU directives would permit additional excise duties or VAT levied at different rates by references to narrowly defined bands of alcoholic strength, it agreed with the Lord Ordinary that minimum pricing targeted the health hazards of cheap alcohol and the groups most affected in a way that an increase in excise or VAT did not. The latter would be felt across the board in relation to the whole category of goods to which it applied and unnecessarily affect groups which were not the focus of the legislation.

Also in agreement with the Lord Ordinary, minimum pricing was easier to understand and simpler to enforce. It would not be open to absorption, for example by selling alcohol below cost as a loss leader.

Lord Mance said it was "unclear how far an objective, which is reasonable and can only be achieved in one way, can or should be measured against an assessment of any damage which giving it effect might cause to the ordinary operation of the EU market". But the CJEU’s approach, which he contrasted in this respect to that of the Advocate General, was an indication that the matter should be treated "very lightly". The comparison to be undertaken was "between two essentially incomparable values. One is the value of health, in terms of mortality and hospitalisation, coupled moreover with the evident desirability of reducing socioeconomic inequalities in their incidence. The other is the market and economic impact on producers, wholesalers and retailers of alcoholic drinks across the European Union". 

The courts should not secondguess the value which a domestic legislator put on health. As such, there was limited scope for the criticism made by the appellants about the lack of EU market impact evidence. An analysis of the market and competition impact material that was available demonstrated that the impact would be minor. The "sunset clause", under which the Act had to be evaluated after five years and would cease to operate automatically after six years, unless the Scottish ministers by order affirmed by the Scottish Parliament determined that it should continue, was a significant factor in favour of upholding the law. The submission that the Scottish Government should have gone further than it did to assess market impact was not realistic.

Click here to access the judgment.

Welcoming the decision, Scottish Health Secretary Shona Robison said: “This is a historic and far-reaching judgment and a landmark moment in our ambition to turn around Scotland’s troubled relationship with alcohol."

She continued: “This has been a long journey and in the five years since the Act was passed, alcohol related deaths in Scotland have increased. With alcohol available for sale at just 18p a unit, that death toll remains unacceptably high.

“Given the clear and proven link between consumption and harm, minimum pricing is the most effective and efficient way to tackle the cheap, high strength alcohol that causes so much damage to so many families.

“So we will proceed with plans to introduce minimum unit pricing as quickly as possible. I intend to make a statement to Parliament shortly setting out our next steps, including our preferred implementation timetable and how we will engage with retailers and industry to make this a success."

Accepting the ruling, Karen Betts, Scotch Whisky Association chief executive, responded: “Looking ahead, the Scotch whisky industry will continue to work in partnership with the Government and the voluntary sector to promote responsible drinking and to tackle alcohol-related harm.

“We will now look to the Scottish and UK Governments to support the industry against the negative effects of trade barriers being raised in overseas markets that discriminate against Scotch whisky as a consequence of minimum pricing, and to argue for fair competition on our behalf. This is vital in order that the jobs and investment the industry provides in Scotland are not damaged. At home, we hope to see an objective assessment of the impact of MUP.”