Scotland to lead the way on minimum unit pricing for alcohol after UK Supreme Court ruling
In 2012 the Scottish Parliament passed legislation to introduce a minimum unit pricing for alcohol, as part of its efforts to improve public health, but the move was challenged by drinks associations and the case has been tied up in legal proceedings ever since without legislation being implemented.
But today the UK Supreme Court has ruled that the 2012 Act does not breach EU law, and is a ‘proportionate means of achieving a legitimate aim’, with the Scottish government hailing the decision as a ‘landmark moment’ for public health.
Nicola Sturgeon, First Minister of Scotland, has welcomed the decision, saying: “This has been a long road – and no doubt the policy will continue to have its critics – but it is a bold and necessary move to improve public health.”
While European spirits and wines associations say they accept the ruling, they are calling for objective assessments of the impact of MUP once implemented.
In Scotland, alcohol is available at prices as low as 18p per unit. Ministers in Scotland will now conduct a consultation on the minimum unit price of 50p, hoping to follow this with the introduction of minimum unit pricing as soon as possible.
This would make it the first country in the world to establish minimum unit pricing for alcohol.
Some states in Canada operate variants of minimum unit pricing, while other EU countries, such as Ireland and Estonia, are also considering the measure.
Reducing harm
Minimum unit pricing (MUP) sets the lowest price an alcoholic drink can be sold for.
MUP: What's the big deal?
Arguments for MUP: In Scotland, alcohol misuse causes 670 hospital admissions and 24 deaths a week. Affordability drives increased consumption: alcohol is now 60% more affordable in the UK than in 1980. The Scottish government says MUP is ‘the most proportionate and effective way to reduce the harm caused by cheap, high strength alcohol’. A modelling study from Sheffield University suggests a minimum unit price of 50p would result in 121 fewer deaths and 2,000 fewer hospital admissions a year by the 20th year of the policy.
Arguments against MUP: While accepting the need to reduce public health problems created by alcohol, opponents of MUP say there is no link between alcohol price increases and reduction in alcohol related harm. They argue that it creates an illegal barrier to trade; and will distort competition by penalizing efficient low-cost producers of alcohol.
In 2012 the Scottish Parliament passed legislation to introduce MUP for alcohol, aiming to reduce the harm caused by cheap, high strength alcohol.
But the move was challenged by drinks associations. While the Court of Session backed the legislation last October (after the case had also previously passed through the Court of Justice of the European Union), the Scotch Whisky Association (SWA) appealed and the case was sent to the UK Supreme Court.
Opponents to minimum unit pricing argue that there is no link between alcohol price increases and reduction in alcohol related harm; and fear that an ‘ineffective’ measure would instead create an illegal barrier to trade (as outlined in the legal action from the SWA, spiritsEUROPE and Comite Vins (CEEV) in 2012).
MUP at 50p per unit
70cl bottle of whisky = £14
Bottle of wine at 12% = £4.50
Four 440ml cans of lager at 5% ABV = £4.40
On-trade beverages generally cost more than 50p per unit so unlikely to be affected.
But in its ruling this morning, the Supreme Court dismissed the appeal, saying the 2012 Act does not breach EU law and that minimum unit pricing is a ‘proportionate means of achieving a legitimate aim’.
Spirits will face the greatest impact from MUP, with 69% of volume currently sold below the 50p per unit threshold, according to Nielsen.
Blended scotch will require a 20% price rise to meet the threshold; although premium spirits (and indeed other premium alcoholic beverages) could benefit as the price difference between them and cheaper brands narrows.
Not all alcoholic beverages will be affected: only those that currently fall below the 50p per unit threshold.
While a 2016 survey from Alcohol Focus Scotland found that the average price of a unit of off-trade alcohol is 52p, it also highlighted an 'abundant supply of alcohol products selling well below that price'.
The lowest price it found was for white cider at 18p per unit - allowing the recommended weekly limit of 14 units to be drunk for just £2.52.
Industry asks for careful assessment
The industry associations behind the appeal say they accept the ruling from the UK Supreme Court: but ask the Scottish government to carefully monitor the impact of MUP.
“Looking ahead, the Scotch Whisky industry will continue to work in partnership with the government and the voluntary sector to promote responsible drinking and to tackle alcohol-related harm,” said Karen Betts, SWA chief executive.
"We will now look to the Scottish and UK Governments to support the industry against the negative effects of trade barriers being raised in overseas markets that discriminate against Scotch Whisky as a consequence of minimum pricing, and to argue for fair competition on our behalf.
“This is vital in order that the jobs and investment the industry provides in Scotland are not damaged. At home, we hope to see an objective assessment of the impact of MUP."
'Experimental' measure
The CEEV, which represents the wine industry in Europe, is calling on other European member states to wait to see the impact of MUP in Scotland before considering such measures themselves.
Jean-Marie Barillère, President of CEEV, said: “We regret, but respect, the Supreme Court decision and hope to count on the Scottish government to ensure a smooth implementation of this legislation, in a way that would as much as possible limit market distortion and preserve a level-playing field.” said
Dr Ignacio Sánchez Recarte, Secretary General of CEEV, added: “We are disappointed because we remain convinced that the predictions are not based on a good model, but considering that the Scottish MUP system will be ‘experimental’, we now encourage the Scottish Government to carefully monitor its impact.
“We also request Member States thinking about developing the same kind of measures, not to take premature decisions but to wait for the first review report on the effects of MUP, both on health and economic operators.”
Effect on fair competition?
spiritsEUROPE argues that MUP ‘will distort competition’ by preventing efficient low-cost producers of alcoholic drinks in other Member States from using that competitive advantage against higher cost producers.
Joep Stassen, President of spiritsEUROPE said: “This decision sets an unwelcome precedent for fair competition between alcohol beverage producers and for the proper functioning of the internal market. The same is true for third country barriers to our European products, resulting in a very negative impact on one of the most valuable agri-food exports of the EU.”
Other EU countries – such as Ireland and Estonia – are considering MUP.
These countries would have to respect European law: national governments need to show that minimum unit pricing is justified and proportionate; and there is no alternative measure which would be at least as effective in achieving the aim and less distorting or restrictive of inter-community trade. Assessments are done on a case-by-case basis.
'Ruling of global significance'
But C&C Group, a manufacturer, marketer and distributor of cider, beer and wine, has welcomed the decision to uphold the introduction of minimum unit pricing.
Tom McCusker, Managing Director C&C Group Ireland, commented: “While most people enjoy alcohol responsibly and in moderation, we believe MUP is a responsible and proportionate measure that will effectively target widespread access to alcohol that is very cheap, relative to its strength.
"By targeting the correlation between harmful drinking levels and strong, cheap alcohol, MUP will help reduce irresponsible alcohol consumption and moderate the relationship some of our society has with alcohol.
“Today’s UK Supreme Court decision will have an immediate and lasting impact on public health policy in Scotland. We hope the ruling will further strengthen the case for the introduction and implementation of this legislation in Ireland and Northern Ireland.”
The Scottish government says it will now work to introduce minimum unit pricing as soon as possible.
Absolutely delighted that minimum pricing has been upheld by the Supreme Court. This has been a long road - and no doubt the policy will continue to have its critics - but it is a bold and necessary move to improve public health.
— Nicola Sturgeon (@NicolaSturgeon) November 15, 2017
Health Secretary Shona Robison said: “In a ruling of global significance, the UK Supreme Court has unanimously backed our pioneering and life-saving alcohol pricing policy.
“This has been a long journey and in the five years since the Act was passed, alcohol related deaths in Scotland have increased. With alcohol available for sale at just 18 pence a unit, that death toll remains unacceptably high.
“Given the clear and proven link between consumption and harm, minimum pricing is the most effective and efficient way to tackle the cheap, high strength alcohol that causes so much damage to so many families.
“The Scottish Government has always supported whisky as a key part of our economy and an icon of Scottish food and drink, and we will continue to work closely with the sector to ensure its economic success. We will also work closely on the promotion of safe and responsible alcohol consumption and the smooth implementation of the policy.”
