Axiom Advocates News

Supreme Court upholds legality of minimum pricing of alcohol

Back to News Listing

Supreme Court upholds legality of minimum pricing of alcohol


15 November 2017

Scotch Whisky Association and others v The Lord Advocate and another [2017] UKSC 76

The Alcohol (Minimum Pricing) (Scotland) Act 2012 imposes minimum unit pricing of alcohol as one of the mandatory conditions for licensed premises under the Licensing (Scotland) Act 2005. The Alcohol (Minimum Price per Unit) (Scotland) Order 2013 sets the minimum price per unit of alcohol at 50p. Neither Act nor Order are currently in force. The petitioners in this case challenged the compatibility of both Act and Order on the basis that minimum pricing constituted a disproportionate interference with the free movement of goods and the common market organisation in wine. The challenge was unsuccessful before the Lord Ordinary, and was appealed to the Inner House. In the course of the proceedings before the Inner House, a preliminary reference was made to the Court of Justice of the European Union (CJEU). On applying the preliminary ruling on the reference back, the Inner House dismissed the petitioners’ appeal but subsequently granted permission to appeal to the Supreme Court. In its judgment, handed down on 15 November 2017, the Supreme Court unanimously dismissed the petitioners’ appeal and so upheld the legality of the minimum pricing regime.

The judgment will be of particular interest for the consideration given by the Supreme Court to the assessment of proportionality. As the court records at §47, it is unclear from the guidance given by the CJEU in this case The court referred to the lack of clarity as to “how the EU market impact of the proposed minimum pricing fits into the exercise which a domestic court must undertake” (§47). The court accepted that “an appreciation of the likely EU market impact seems on the face of it a sensible precondition to action interfering with EU cross-border trade and competition”. It noted, however, that the proposed comparison in this case was between two essentially incomparable values: the market on the one hand, and the value of life and heath on the other. It further noted that the assessment of the value to be placed on health was not one for the courts to second guess: it is “for the member states, within the limits imposed by the Treaty, to decide what degree of protection they wish to assure” (§48). The court thus saw “very limited scope" for the criticism made by the petitioners about the absence of market-impact evidence. In upholding the decision of the Inner House, the Supreme Court noted that a critical issue was whether taxation would achieve the same objectives as minimum pricing. They found, following the Lord Ordinary, that it would not: taxation would impose an unintended and unacceptable burden on those whose drinking habits did not represent a significant health problem, whereas minimum pricing would target the really problematic drinking to which the Government’s objectives were always directed and the nature of which recent material had confirmed (§63). 

As to the general advantages and values of minimum pricing for health in relation to the benefits of free EU trade and competition, the court noted that the Scottish Parliament and Government had 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 being a judgment which it was for them to make, their right to make it militated strongly against intrusive review by a domestic court. Notwithstanding that minimum pricing would involve a market distortion, including of EU trade and competition, the court found 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” (§63).

 

Gerry Moynihan QC and Lesley Irvine of Axiom Advocates appeared with the Lord Advocate, James Wolffe QC, instructed by the Scottish Government

John Macgregor of Axiom Advocates appeared with Philip Simpson QC instructed by the Advocate General for Scotland

Morag Ross QC of Axiom Advocates appeared with Aidan O’Neill QC instructed by the petitioners, the Scotch Whisky Association, the European Spirits Organisation, and the Comité Européen des Entreprises Vins.