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ECJ rules: Minimum price of alcohol in Scotland restricts the free trade

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ECJ rules: Minimum price of alcohol in Scotland restricts the free trade

ECJ rules: Minimum price of alcohol in Scotland restricts the free trade
January 05
12:58 2016

The European Court of Justice has investigated whether the minimum price per unit (MPU) of alcohol, introduced by the Scottish parliament in 2012, restricts the free trade of alcohol and whether it is indeed the best way to protect the health of the public, as was intended.

The objective of the Scottish legislation is to protect human life and health. A minimum price per unit of alcohol would lead to an increase LA 4 in the currently modest price of some high-strength alcoholic drinks. Such drinks are often purchased by those whose consumption of alcohol is problematic. In the opinion of the Scottish legislature, that objective could not be achieved with the same degree of success by means of tax measures.

The court sought to ascertain whether the introduction of a minimum price is compatible with EU law. In particular, that court asks whether the effect of the legislation at issue is to restrict the free movement of goods and, if it does, whether that restriction can be justified on the ground of the protection of health.

In a case brought by the Scottish Whisky Association et al against the legislation, the court found that the same effect (that of reducing problematic alcohol consumption) could be established by effective tax measures. The court concluded that it is for the Scottish government to decide on the best way to manage the situation but in a statement it said:

“In [the] judgment, the Court of Justice considers that the effect of the Scottish legislation is significantly to restrict the market, and this might be avoided by the introduction of a tax measure designed to increase the price of alcohol instead of a measure imposing a minimum price per unit of alcohol.”

It continued: “According to the Court, a fiscal measure that increases the taxation of alcoholic drinks is liable to be less restrictive than a measure imposing an MPU since, unlike where there is a minimum price; traders retain the freedom to determine their selling prices.”

There are many European countries that have debated following Scotland’s lead in the battle to reduce problematic alcohol consumption. Ireland, in particular, has expressed its wish to implement similar MPU legislation in the near future.

The court is expected to make its final ruling on the legislation this month.

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