Alcohol industry moves to halt minimum pricing

  

Representatives of Europe’s wine and spirits industries have joined with the Scotch Whisky Association in a legal battle aiming to halt the minimum pricing of alcohol.

The Scottish Parliament overwhelmingly passed a bill in May that introduced a £0.50 (0.63) minimum price for a unit of alcohol, the first legally-binding minimum price within the European Union.

From as early as April 2013, cut-price alcoholic beverages will be outlawed in Scotland. The bill is intended to reduce binge drinking - and thus improve health and crime levels.

The European Spirits Organisation (CEPS) and the Comité des Vins – representing Europe’s liqueur and wine producers respectively – attached themselves to an action in the Scottish Court of Sessions launched yesterday (19 July) by the Scotch Whisky Association to challenge  the Scottish government.

Trade distortion

They argue that minimum pricing represents an illegal barrier to trade, will discriminate between companies in the market and fail to address harmful drinking.

The group added that a minimum price is illegal under EU and global competition laws and would also ruin the Scottish whisky industry's efforts to counter price controls and high tariffs in overseas markets.

Producers also fear the scheme will set a precedent for other member states to follow the Scottish example. The United Kingdom and Ireland are currently mulling the introduction of such a rule.

They also hope that the case will create impetus for a formal European Commission objection to the Scottish government’s minimum unit pricing (MUP) legislation on grounds that it distorts trade.

The Scottish case will probably be heard this autumn. Meanwhile, a consultation period on the new rule will be held until 26 September, following the UK’s notification to the Commission in June of Scotland’s intention to go ahead with the pricing strategy.

Once this period ends, drinks producers are hoping that a member state will raise objections with the Commission, forcing it to consider the issue afresh and delaying it for a further three-month period.

Health groups: A ‘life saver’

Health groups are strongly in favour of minimum pricing, however. Monika Kosińska, secretary-general of the European Public Health Alliance (EPHA), said: "I hope other EU governments are encouraged by this move, and follow suit in a measure that, if applied across the rest of Europe, would save many lives every year.”

The Scottish health minister, Nicola Sturgeon, acknowledged the move by the Scotch Whisky Association would delay the policy’s introduction but said she would “vigorously defend” the action. She seemed bullish that the state would win the case, citing previous failed attempts by the tobacco industry and insurers to block legislation on the grounds of legality.

Positions: 

“It [minimum pricing] will help Scotland achieve a ‘cultural shift’ in its unhealthy attitudes to alcohol,” said Nicola Sturgeon, the Scottish health secretary. "This policy will save lives – it’s as simple as that."

“European law is clear - minimum pricing is an illegal barrier to trade.  We fully agree alcohol misuse must be tackled, but other more effective measures can be used, without creating barriers to trade,” said Paul Skehan, director-general of the European Spirits Organisation.

“Whilst supporting the overall objective of reducing alcohol-related harm, The Brewers of Europe is of the opinion that the Scottish [minimum pricing] measure is an ill-conceived and mis-targeted measure that will artificially distort competition and discriminate against imported products,” said Pierre-Olivier Bergeron, secretary-general of the Brewers of Europe.

Monika Kosińska, secretary-general of the European Public Health Alliance, is backing the minimum pricing, however, in common with other health organisations. “This move by the Scottish government is a powerful demonstration of decisive action to tackle our biggest health challenges,” she said.

Timeline: 
  • 26 Sept. 2012: Consultation period following UK notification of Scotland's minimum pricing move will expire
  • Autumn 2012: Scotch Whisky Association's case against minimum pricing to be heard in the Scottish Court of Sessions
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