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European court rules against minimum pricing of alcohol

BenRiach whiskyUpdated 11am: The Scottish government has suffered another setback in its plans to introduce a minimum price on alcohol after a European court said it is contrary to EU law if other tax options exist.

The European Court of Justice instead recommends the introduction of alternative tax measures.

David Frost, Scotch Whisky Association chief executive, welcomed the ruling. He said: “The SWA always said European Union law issues were central to this case, and so it has proved. This settles EU law issues once and for all.

“The Court has confirmed that minimum unit pricing (MUP) is a restriction on trade, and that it is illegal to choose MUP where there are less restrictive ways of achieving the same end.

“The Scottish courts will now reflect on the implications of the ruling and all the evidence, before issuing a final judgement.

“This ruling opens the way to moving the debate on and allowing us to address alcohol misuse with practical measures that actually work. Alcohol-related deaths have fallen by a third over the last decade in Scotland, which suggests we are already on the right path. We remain committed to working closely with the Scottish Government and everyone else with an interest.”

However, it may not be the end. The ruling will be referred back to the Court of Session for a final decision which could then be appealed to the UK Supreme Court in London.

Holyrood passed legislation to bring in a minimum price of 50p per unit in May 2012. It would see the cheapest bottle of wine rise to £4.69 and a four-pack of 500ml cans of 4% lager would cost at least £4. A 70cl bottle of whisky could not be sold for less than £14.

The European court ruling said: “The Court of Justice considers that the effect of the Scottish legislation is significantly to restrict the market, and this might be avoided by the introduction of a tax measure designed to increase the price of alcohol instead of a measure imposing a minimum price per unit of alcohol.

It added: “The Court states that it is ultimately for the national court to determine whether measures other than that provided for by the Scottish legislation, such as increased taxation on alcoholic drinks, are capable of protecting human life and health as effectively as the current legislation, while being less restrictive of trade in those products within the EU.”

Health Secretary Shona Robison said: “This ruling from the Court of Justice of the European Union indicates, importantly, that it will be for the domestic courts to take a final decision on minimum unit pricing.

“While we must await the final outcome of this legal process, the Scottish Government remains certain that minimum unit pricing is the right measure for Scotland. We believe it is the most effective mechanism for tackling alcohol misuse and reducing the harm that cheap, high-strength alcohol causes our communities.

“We maintain that minimum unit pricing would target heavy drinkers as they tend to drink the cheap, high strength alcohol that will be most affected by the policy.

“The case will now continue to the Scottish courts, and we look forward to a hearing in the new year to determine the outcome in this case.”

>> Daily Business Comment: Why Holyrood needs to drop its pricing plan


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