Last week the European Court of Justices' Advocate-General (AG) Lord Bot delivered his Opinion on Scotland's bid to implement Minimum Unit Pricing (MUP). The views of the AG though were claimed as good news by both opponents and supporters of MUP, demonstrating the complexity of the challenge in the context of EU law.
On the one hand, the AG's opinion states the final decision is to be made by Scotland's national court, despite the Scottish Judiciary having already decided that MUP did not breach EU competition law. However the AG sets out issues which suggest the outcome is still yet to be determined. Crucially, MUP - which intereferes with EU principles against price fixing - can only be justified through ‘legitimate objectives’ such as the protection of public health. However the Opionion says 'the principle of proportionality requires that the national measure must actually meet the objective … and must not go beyond what is necessary in order to attain that objective’.
As such the AG says Scotland must be able to prove that MUP is the best and only way to achieve the desired public health goal, which of course many feel has been sufficiently demonstrated by the Sheffield work and Canadian experience. However the AG's Opinion sees it as more complicated - in particular because he is not convinced that tax increases may not be a better means. See a more detailed analysis of the Opinon by EU law lecturer Angus Macculloch.
Taxation Vs MUP?
Previously work by the Institute of Fiscal Studies said it favoured taxation over MUP, partly over concerns that MUP would transfer greater profits to industry and retailers. However the IFS acknowledged that the current alcohol taxation system is not optimal and a 'sensible starting point would be to tax all alcohols at an equivalent rate per unit. Such a change would require policy action at the EU level which the Government should pursue.'
Indeed Katherine Brown, Director of the Institute of Alcohol Studies (IAS), in welcoming the ruling as good news said: 'It can be quite clearly demonstrated that taxation alone cannot achieve the same effect as minimum unit pricing, partly because the EU tax rules prohibit member states from taxing all alcoholic drinks by strength'. The IAS release also highlighted some of the radical increases in duty that would be required to achieve equivalence of a 50 pence MUP.
It may be worth noting that Sheffield's Professor Petra Meier has previously stated both taxation and minimum pricing should both be used to reduce alcohol-related harm, and as such should not be an 'either or' argument. MUP would ensure that no alcohol can legally sold below the choosen unit price, whilst increased taxation would ensure any extra spending did not end up solely as industry profit. Of course England's Chancellor has been cutting alcohol taxes to the dismay of alcohol health groups, whilst trade bodies have credited the duty cuts with helping boost the recent growth in off-sales.
The Advocate General’s Opinion will be followed by the full judgement of the European Court of Justice later this year, when the case will then be referred back to the Scottish court.
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