Is Minimum Pricing Lawful? It Depends.

After the judgement of the ECJ on minimum unit pricing (‘MUP’) was issued yesterday, there followed a litany of headlines and commentary which betrayed a truism when considering the impact of nuanced legal precedent:  whilst both sides yet again claimed victory, the real answer was that classic lawyers riposte: it depends. 

The Alcohol (Minimum Pricing) Act 2012 seeks to impose a new mandatory condition on all licences under the Licensing (Scotland) Act 2005, namely that alcohol cannot be sold for less than a minimum price using units of alcohol as the barometer. 

The Scotch Whisky Association and other trade groups have challenged the 2012 Act through the Scottish Courts. The Court of Session referred the matter to the European Court of Justice for a view, in order that the CoS could then finalise its own findings. 

My reading is that the ECJ has found that, whilst MUP is a restriction on trade, it might not be unlawful if other less restrictive measures have been considered. They point to tax as the obvious alternative.

The decision is far from simple. It is detailed, with a number of technical and practical caveats. 

First of all, given that MUP does not automatically target problem drinkers but is a ‘whole population’ policy, the evidential burden on the Scottish Government to make a case that it is necessary and proportionate is quite high; something which the Advocate General Yves Gots pointed to in his opinion a few months ago. This is because the Government needs to prove that MUP is more effective than increased taxation. Demonstrating that the mischief can be targeted in this way is far from easy. Consumption patterns, drinking trends, commercial decisions, poverty (socio-cultural, economic and intellectual), demography, geography and individual factors all have a role to play. It is a most complex topic. 

It is now for the CoS to consider all of this evidence (much of which is contested one way or the other by the alcohol industry, other commentators, public health academics, alcohol harm charities and temperance bodies) before reaching a view.

Once the CoS delivers its verdict, it can be appealed ultimately to the Supreme Court and back to the ECJ. Yesterday’s announcement is then just another landmark on the MUP journey which may run for years. 

There a few particular points I’d like to explore. Firstly, the tax alternative. Much has been made of the fact that alcohol duty is outwith the competence of Holyrood. Is that good or bad for the Scottish Government? I’m really not sure.  They can rightly argue that as an alternative, it is not open to them. However, the judgement refers to alcohol duty or ‘other taxes’. The Scottish Government does have wide tax raising powers so is there something to be said about that? Taxes not on the product directly, but on the supplier? I can give two examples of this. First, the so-called ‘public health’ tax which was introduced to apply to large retailers who sold both alcohol and tobacco, ran for a period and has now been withdrawn; and second the Social Responsibility Levy, which has been enacted but never commenced, which is a tax on licence holders based on a sort of ‘polluter pays’ doctrine.  

How does consideration of these non duty taxes fit with all of this?

I also wonder about the ‘whole population’ approach. Affordability and availability are referred to as significant factors in alcohol abuse. Yet alcohol consumption has fallen year on year in Scotland since around 2008, when we are told alcohol is more affordable than ever before. Similarly, the availability doctrine does not seem to accord with the example of our neighbours in England and Wales; whose consumption has also fallen over the same period when their licensing laws were liberalised under the Licensing Act 2003 with the vast majority of premises trading longer hours than pre 2005. During that same period a number of alcohol related harm-type statistics have fallen or remained static. 

Another point is that I cannot align myself with the view of health commentators who suggest that the alcohol industry is subverting democratic will. That sort of ad hominem emotional reductionism is unhelpful and in any event wrong. What is more democratic than the right of an aggrieved party to seek redress in the courts to challenge the Government of the day? Public health policy is subject to the rule of law as with any area of policy, and rightly so. It is perfectly acceptable that certain parts of the industry can seek to challenge a law. I’d also encourage caution about inferring that the whole alcohol industry is the challenger. That’s simply not the case. The Scottish Licensed Trade Association is an open and strong supporter of MUP and has been for decades. Many independent publicans support the idea. Painting a ‘Big Alcohol’ as some kind of existential menace is counter productive given not all parts of the industry are aligned on this topic, and perhaps more importantly, because alcohol is not tobacco and superimposing anti ‘Big tobacco’ language is a crude artifice. The CoS has already ruled in an earlier part of the MUP case that the responsible consumption of alcohol is part of human happiness. Folk Devils and moral panics do not lead to sensible policy in my view. 

I also urge calm to those who say that the Scottish Government are so focused on this policy that they have lost perspective. The Government has stated on a number of occasions that they don’t see MUP as a magic bullet but part of a package of measures which they have introduced with an aim to curb alcohol abuse, which is of course a noble pursuit. 

I don’t profess to have a settled view on all this. These are my present thoughts which may well be educated by greater minds as the debate unfolds. I do say that the intricacies of the case involve not just a licensing law cypher, but far grander constitutional and academic tautologies which we shall encircle for some time yet. 

A very Merry Christmas to you all, and best wishes to you and yours for 2016!


About Stephen McGowan

Leading Scottish licensing solicitor at TLT LLP.
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