This morning, the UK Supreme Court handed down its judgment in the appeal brought by the Scotch Whisky Association, spirits EUROPE and CEEV against the Scottish Ministers, regarding their plans to introduce minimum pricing for alcohol in Scotland.
The Alcohol (Minimum Pricing) (Scotland) Act 2012 (“the 2012 Act”) amended the Licensing (Scotland) Act 2005 by introducing a new paragraph 6A(1) to Schedule 3, requiring that ‘Alcohol must not be sold … at a price below its minimum price'. The Scottish Ministers have prepared a draft order specifying a minimum price per unit of 50 pence but neither the 2012 Act nor the order have been brought into force pending the outcome of this legal challenge.
The UK Supreme Court has unanimously decided that the 2012 Act did not breach EU law and determined that minimum pricing for alcohol was a lawful means of achieving a legitimate aim.
Reasons for the Court’s decision
In reaching their decision, the Court examined the guidance provided by the Court of Justice of the EU (“CJEU”). Earlier in this case, the CJEU had concluded that where a national court examines national legislation for justifications relating to the protection of health, it is bound to consider whether the means chosen, in light of the evidence, are appropriate for the objectives pursued. It also must consider whether those objectives can be obtained by measures which are less restrictive of the free movement of goods and the common market.
The Court found that the objective in this case was not that alcohol consumption be eradicated, nor that its costs be prohibitive for drinkers. The Court found that the Scottish Government’s objective through the 2012 Act was to tackle alcohol misuse and overconsumption manifesting themselves, in particular, in the health and social problems suffered by those in poverty in deprived parts of Scotland.
The Court rejected the appellants’ arguments that an excise or tax would be as effective, and a less restrictive, means to achieve the objective. While this was possible under the relevant EU Directives, minimum pricing targeted adverse health effects in a way which an increase in excise or tax would not. An increase in excise or VAT, for example, would affect everyone, which was not the focus of the legislation. Minimum pricing, as a concept, was also easier to understand and simpler to enforce.
The Court also found that, ultimately, it cannot second-guess the value that a domestic legislature puts on health. As such, there was only limited scope for criticism about the market impact analysis carried out by the Scottish Ministers, and that the argument that they should have gone further than they did in assessing market impact, was not realistic. In that regard, the Sunset Clause (under which the Scottish Ministers must evaluate and report on the operation of minimum pricing after a period of five years, with it automatically terminating after six years, unless affirmed by the Scottish Parliament) was a further factor in favour of upholding the 2012 Act.
What happens next?
It is expected that the Scottish Government will shortly announce that the 2012 Act and the order will be brought into force, now the legal challenge has been determined. This will make Scotland the first country in the world to operate a system of minimum unit pricing for alcohol.
With other countries around the world considering introducing similar measures to tackle excessive alcohol consumption in their own populations, observers will be keeping a close eye on both (i) its impact on the drinks market and (ii) how the health of the general population is measured, post-implementation of the 2012 Act.
The decision this morning is a historic and significant one. Only time will tell whether the policy has the lasting impact on the public health of Scotland that the legislature hopes for.