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Publication - Report

Minimum unit pricing of alcohol : final business and regulatory impact assessment

Underlines the rationale for minimum unit pricing from health and economic perspectives, setting out anticipated costs and benefits for all parties affected by a minimum price of 50 pence per unit.

Contents
Minimum unit pricing of alcohol : final business and regulatory impact assessment
3. Legal challenge

3. Legal challenge

3.1. The previous draft Order, The Alcohol (Minimum Price per Unit) (Scotland) Order 2013, was notified on 25 June 2012 (ref 2012/0394/ UK [37] ) under the provisions of the Technical Standards & Regulations Directive 98/34/ EC (now Directive 2015/1535/ EU), and was accompanied by the 2012 Business and Regulatory Impact Assessment. Various Member States responded with opinions or observations. The European Commission responded with a detailed opinion on 26 September 2012 [38] , and the Scottish Government responded to the European Commission on 21 December 2012 [39] addressing the points raised by the Commission. Given the decision of the Inner House of the Court of Session of Edinburgh to refer the case to the Court of Justice of the European Union ( CJEU), the Commission presented its observations during Court proceedings.

3.2. In July 2012, shortly after notifying the previous draft Order, the Scotch Whisky Association ( SWA) in conjunction with the European Spirits Organisation and the Comitée Européen Des Enterprises Vins sought a judicial review, which was held in January 2013. In May 2013, the Outer House of the Court of Session of Edinburgh found comprehensively in favour of the Scottish Government [40] , recognising the overwhelming evidence supporting the legitimate aims of minimum pricing to reduce alcohol consumption, with a particular focus on reducing consumption by hazardous and harmful drinkers who experience so much of the alcohol-related harm seen in Scotland.

3.3. The SWA (and others) appealed the judgment to the Inner House of the Court of Session. Following a hearing held in February 2014, the Court of Session, in April 2014, referred the case to the CJEU to clarify six points of EU law [41] . The CJEU held an oral hearing on the case on 6 May 2015. At the heart of the case was the question of whether minimum pricing is proportionate in terms of EU law.

3.4. The CJEU’s Advocate General provided his Opinion in September 2015 [42] , which was followed by the Preliminary Ruling of the Court in December 2015 [43] . The Preliminary Ruling provided guidance to the domestic court in respect of the six points of EU law on which it sought clarity. The ruling indicated that it was for the domestic courts to take a final decision on minimum pricing, but noted that minimum pricing could be legal but would be contrary to EU law if less restrictive tax measures could be used to achieve the aim of the legislation.

3.5. The case returned to the Court of Session Inner House, and a hearing was held over four days in June and July 2016. In October 2016, the Opinion of the Inner House upheld the decision of the Outer House [44] . The SWA then sought permission from the Inner House to appeal to the UK Supreme Court and, in December 2016, the Inner House granted SWA permission to appeal to the UK Supreme Court. The UK Supreme Court hearing was held over two days in July 2017, and the judgment was delivered on 15 November 2017 [45] . All seven judges upheld the findings of the lower courts: that the legislation is proportionate to the public health aim which it pursues, and that fiscal measures would not be as effective in achieving the targeted aims achievable by minimum pricing. In the judgment, Lord Mance concludes:

“63. The Lord Ordinary and First Division decided that it could reasonably be concluded, on an objective examination of the differing material put before them and now before the Supreme Court, that the proposed system of minimum pricing was proportionate in the sense required by European Union law and now explained by the Court of Justice. It is for the Supreme Court to determine whether this was a judgment that they were entitled to reach. Despite the forceful and very well presented submissions of Mr O’Neill, I consider that they were. A critical issue is, as the Lord Ordinary indicated, whether taxation would achieve the same objectives as minimum pricing. Although not all of the points on which he relied for his conclusion on this issue can still stand, the main point stands, that taxation would impose an unintended and unacceptable burden on sectors of the drinking population, whose drinking habits and health do not represent a significant problem in societal terms in the same way as the drinking habits and health of in particular the deprived, whose use and abuse of cheap alcohol the Scottish Parliament and Government wish to target. In contrast, minimum alcohol pricing will much better target the really problematic drinking to which the Government’s objectives were always directed and the nature of which has become even more clearly identified by the material more recently available, particularly the University of Sheffield’s April 2016 study. As to the general advantages and values of minimum pricing for health in relation to the benefits of free EU trade and competition, the Scottish Parliament and Government have as a matter of general policy decided to put very great weight on combatting alcohol-related mortality and hospitalisation and other forms of alcohol-related harm. That was a judgment which it was for them to make, and their right to make it militates strongly against intrusive review by a domestic court. That minimum pricing will involve a market distortion, including of EU trade and competition, is accepted. However, I find it impossible, even if it is appropriate to undertake the exercise at all in this context, to conclude that this can or should be regarded as outweighing the health benefits which are intended by minimum pricing. In the overall context of the Scottish or, on the face of it, any other market, it appears that it will be minor, though it will hit some producers and exporters to the Scottish market more than others. Beyond that, the position is essentially unpredictable. Submissions that the Scottish Government should have gone further to predict the unpredictable are not realistic. The system will be experimental, but that is a factor catered for by its provisions for review and “sunset” clause. It is a significant factor in favour of upholding the proposed minimum pricing régime.

64. For these reasons, I consider that the appeal should be dismissed.”

The judgment also sets out that it is for national authorities to set out the level of protection they decide to put on health. At paragraph 48, Lord Mance states:

48. Would or should a court intervene because it formed the view that the number of deaths or hospitalisations which the member state sought to avoid did not “merit” or was not “proportionate to” the degree of EU market interference which would be involved? I very much doubt it. Any individual life or well-being is invaluable…”.


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