5 January 2016

Scottish legislation introducing a minimum price per unit of alcohol is contrary to EU law if less restrictive tax measures can be introduced, the Court of Justice (CJEU) has ruled.

Giving judgment in Case C-333/14 (Scotch Whisky Association and Others v Lord Advocate), the Court said that a tax measure might provide additional benefits and a broader response to the objective of combating alcohol misuse.

In 2012, the Scottish Parliament passed legislation relating to the minimum price of alcoholic drinks in Scotland.

That legislation provides for the imposition of a minimum price per unit of alcohol (MPU), which must be observed by any person holding a licence for the retail selling of alcoholic drinks in Scotland. The minimum price is calculated by the application of a formula that takes into account the strength and volume of alcohol in the product.

The Scotch Whisky Association, together with a number of other undertakings in the alcoholic drinks sector, brought proceedings against that legislation claiming that the Scottish legislation constituted a quantitative restriction on trade that is incompatible with EU law, and that its effect was to distort competition.

The CJEU has agreed that the effect of the Scottish legislation is significantly to restrict the market, and ruled that 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.

The Inner House of the Court of Session, which raised the question with the CJEU, will now have to decide the case in the light of that Court's response.