On 24 June the United Kingdom woke up to an unprecedented political hangover following the referendum decision to leave the European Union - a result that poses intriguing questions as to the future of the Scottish Government’s flagship minimum pricing policy.
The Alcohol (Minimum Pricing) (Scotland) Act 2012 provides for an alcohol floor price using the formula: MUP (minimum unit price) x strength (ABV) x volume in litres x 100. At the currently proposed MUP of 50p, a bottle of wine with an ABV of 13% would cost no less than £4.88. For a bottle of spirits, (70% ABV), the floor price would be £14.00, representing a significant hike for own-label products and pushing the cost towards that of premium spirits.
The Act is presently in limbo following a court challenge by the Scotch Whisky Association and other trade organizations who assert that the legislation is incompatible with European Union trade law. It would, they say, distort competition and the free movement of goods among distributors.
In round one, the judicial review petition was dismissed in the Outer House of the Court of Session by Lord Doherty ([2013] CSOH 70). The petitioners then reclaimed. An Extra Division of the Inner House referred the case to the European Court of Justice (ECJ) for a preliminary ruling on a number of questions ([2014] CSIH 38). In essence, the ECJ considers that the legislation would significantly restrict the market, a result that would be avoided by the introduction of tax measures as a means of protecting health. Contrary to many newspaper reports, the Court did not decide that minimum pricing is “illegal”: rather, the Scottish Court will now have to consider whether health might be protected just as effectively by price rises achieved through increased taxation. That exercise is complicated by Holyrood’s inability to legislate for higher duty levels on alcohol.
The hearing in Edinburgh resumed last month. A decision is expected later in the year; and, whatever the result, the case is likely to move to the Supreme Court in London.
So, a European Union trade law barrier - and a Brexit decision: what next? There’s a paradox here. The claim that minimum pricing will have a positive effect on public health is based on research carried out at the University of Sheffield. According to the researchers’ “modelling” of the predicted result on harmful alcohol consumption, we could expect:
- A reduction in alcohol-related deaths by about 60 in the first year and 318 by year ten of the policy.
- After 20 years, over 2,000 lives saved.
- A fall in hospital admission of 1,600 in year 1, and 6,500 per year by year ten of the policy.
- A fall in crime volumes by around 3,500 offences per year.
- A financial saving from harm reduction (health, employment, crime etc) of £942m over ten years.
- Yet, with ink on the referendum ballot papers barely dry, First Minister Nicola Sturgeon protested Scotland’s departure from the European Union, even threatening that the Scottish Government would veto the divorce.
That illogicality aside, prospects for the early implementation of minimum pricing look very dim despite the “leave” vote. While the UK’s exit is inevitable, it could take over two years to complete, might well include a trade deal of some sort and the final resolution of the court battle is likely to be least 18 months away. So, the future of minimum pricing post-Brexit is anyone’s guess. It is however certain that the interminable arguments over alcohol pricing and its effect on the nation’s health will continue to rage.
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