In a ruling published last week, the European Court said minimum prices for cigarettes and loose tobacco in France, Ireland, and Austria contravene EU competition rules. Set as a percentage of average prices, the minimum prices were adjudged to undermine competition because they may artificially protect some companies from lower cost rivals.
Although the European Court said that in theory minimum prices could be acceptable if they are structured to safeguard competitive pressures, the SWA said the ruling has implications that can be extended to alcohol.
Legal implications
Gavin Hewitt, chief executive of the trade body, called the ruling a major development “confirming our contention that minimum pricing breaches EU law and unfairly distorts competition.”
Hewitt added: “Given this latest evidence, the Scottish government must now recognise the legal realities. It cannot introduce a trade barrier in breach of the UK’s European obligations by imposing minimum pricing on alcohol in Scotland.”
The SWA is calling on the Scottish government to withdraw its pricing proposal from its Alcohol Bill and work with all stakeholders to address alcohol related harm.
Different issue?
But the Scottish government has so far stood by its pricing plans. When the advocate general at the European court issued a negative opinion in October on minimum pricing for tobacco, Health Secretary Nicola Sturgeon issued the following statement:
“It is entirely inappropriate and irrelevant to translate an opinion on tobacco to the totally different issue of minimum pricing of alcoholic products per unit of alcohol for public health reasons.”
In its latest judgment, the European Court made it clear that minimum pricing could be acceptable in theory, but said that, in the case of tobacco, taxes and excise duty are the best ways to achieve public health goals. It said fiscal changes do filter through to higher prices without upsetting competition and undermining the freedom of companies to determine prices.