Supreme Court hears appeal in alcohol minimum pricing case

Hearings before the Supreme Court are scheduled for Monday and Tuesday. The Scotch Whisky Association (SWA) is looking to overturn an October 2016 ruling by the Inner House of the Court of Session in Edinburgh which allowed the planned introduction of MUP.

Legislation prohibiting the sale of alcohol below a minimum price was passed by the Scottish parliament in May 2012, and further regulations were drafted in 2013 to set a £0.50 rate for the MUP. However, the application of those rules has been delayed by the SWA's legal challenge. The trade body, supported by two European trade organisations, has argued that the legislation breaches EU law.

According to a case summary published by the Supreme Court, the SWA has claimed that minimum unit pricing is "disproportionate as a matter of EU law, operating as a quantitative restriction on the free movement of goods and impacting on the proper functioning of the Common Agricultural Policy's Common Market Organisation on the production, marketing and sale of wine".

The SWA argue that there are other pricing measures that could be introduced which would be "less disruptive of free trade and less distortive of competition across the EU single market, and would have at least an equivalent level of effectiveness in achieving the aim of the Scottish Government to improve public health", according to the summary.

The SWA's legal challenge went all the way to the EU's highest court, which issued a ruling in December 2015. The Court of Justice of the EU (CJEU) said the MUP is potentially in breach of EU law as it is "liable to undermine competition by preventing some producers or importers from taking advantage of lower cost prices so as to offer more attractive retail selling prices". However, it said the policy may be permitted on public health grounds provided that it is proportionate. The CJEU referred the case back to the Scottish courts, culminating in the ruling of Inner House of the Court of Session last year.

The Edinburgh court ruled that the measures proposed by the Scottish Government were proportionate and that simply increasing tax, which had been proposed by the SWA as an alternative measure, would not have the same effect.

The Supreme Court's decision is likely to be monitored closely in other parts of the UK. Earlier this year, a Westminster committee set up to scrutinise the operation of the 2003 Licensing Act in England and Wales recommended that MUP be introduced in England and Wales if the measure is introduced in Scotland and subsequently assessed as being successful in improving public health.

The committee said, though, that it would not be until 2023 at the earliest before a statutory assessment of the MUP in Scotland would take place.

"This case is being followed very closely in Scotland and elsewhere, both by the licensed trade and health organisations," said licensing laws expert Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com. "MUP is a priority policy for the Scottish government in its strategy to tackle Scotland’s relationship with alcohol and the decision of the Supreme Court is likely to bring this long-running matter to a close."