Court says minimum alcohol pricing may breach EU law

The Vintners' Federation of Ireland (VFI) has urged Minister for Health Leo Varadkar to push ahead with plans to introduce a ban on below-cost selling of alcohol, despite a court ruling that it could breach EU rules.

Advocate General Yves Bot, a senior adviser to the European Court of Justice has advised that a proposal to introduce minimum pricing in Scotland could impact on the free movement of goods . He said the Scottish government should explore other means to protect public health such as increasing tax.

The Vintners’ Federation of Ireland (VFI) expressed its strong disappointment at the opinion set out on Thursday and described the European response to tackling the issue of minimal pricing as “nonsensical.”

Mr Bot said in his opinion for court judges that a member state can impose a minimum price, which restricts trade and distorts competition, only if this system was superior to an alternative measure.

He said that it was for a Scottish court to examine whether it was better to adopt the alternative, increased taxation, but added that it was difficult to justify a minimum price, which appeared less consistent and effective.

Judges of the European Court of Justice, the EU’s top court, follow the advocate general’s opinion in the majority of cases, but it is not binding. The court’s ruling would normally come within three to six months.

The Scottish Parliament proposed in 2012 introducing a minimum retail selling prices for all alcoholic beverages, based on the strength and volume.

The Scotch Whisky Association, of which Diageo is a member, and two European federations for spirits and for wines challenged the legislation, saying it restricted the trade of drinks between Scotland and EU member states and could distort competition between alcohol producers.

EU law, they said, states that the price of wine should be determined by normal market forces and that excise duties could equally meet the aim of the legislation.

That aim is to reduce harm to society and to individual health from excessive or abusive consumption of alcohol. Scottish ministers, who have proposed a minimum price per unit of 50 pence (68 cent), have argued the minimum pricing system would target the relatively cheap alcoholic beverages typically purchased by harmful drinkers.

According to the Scottish government, the impact of excessive consumption is estimated to cost £3.6 billion per year, equivalent to £900 for every adult in Scotland, who buy on average almost a fifth more alcohol than their English and Welsh counterparts.

The VFI urged Minister for Health to bring forward the measures recommended by the Public Health (Alcohol) Bill 2015, which deals with the core issues of affordability and availability in Ireland.

The Bill has effectively been on hold pending the outcome of the ECJ ruling but was expected to be introduced in the Dáil if it was deemed compatible with EU legislation.

“Whilst today’s announcement by the ECJ is an initial indication, this is a big blow to the industry and is absolutely nonsensical,” said VFI chief executive Padraig Cribben

“The abuse and misuse of cheap alcohol being sold by supermarkets that sell alcohol as a loss leader needs to be urgently tackled, regardless of the measure,” he added.

The Alcohol Beverage Federation of Ireland, an umbrella group representing drinks manufacturers and suppliers, meanwhile called on Mr Varadkar and lobby groups to help it find an effective solution to tackle the sale of cheap alcohol.

“We are wholly against the sale of cheap alcohol, and our members want to work with government to find a solution that will effectively address its sale in this country. We believe that a ban on the below cost selling of alcohol is that solution to addressing the sale of cheap alcohol,” it said.

Additional reporting: Reuters