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Scotch whisky industry legally challenges minimum pricing of alcohol

Published:  20 July, 2012

The Scotch Whisky Association is taking action in Europe and the UK against the Scottish Government's minimum unit pricing legislation, saying it will "artificially distort trade".

The Scotch Whisky Association is taking action in Europe and the UK against the Scottish Government's minimum unit pricing legislation, saying it will "artificially distort trade".

It has taken a complaint to the European Commission and legal action through the Scottish courts. It is being joined in its opposition by other UK and European Union wine, beer and spirits organisations.

The SWA has consistently argued that minimum pricing will be ineffective in tackling alcohol misuse, will penalise responsible drinkers and put more pressure on household budgets, is illegal and will damage the Scotch whisky industry.

The SWA believes the Scottish Government's minimum pricing policy is misguided. The Government's own modelling illustrates that MUP will not reduce the number of hazardous drinkers and will instead force responsible drinkers to pay much more. Scottish Government figures show 73% of alcohol sold in the "off trade" will have to go up in price.

The SWA's complaint to the EC states that MUP breaches EU trade rules. It says that minimum pricing of alcohol would artificially distort trade in the alcoholic drinks market, contrary to EU law.

The SWA is also concerned that other countries are likely to adopt measures similar to MUP and use a "protection of health" justification to target imported products. Such 'copycat' measures could cost the Scotch Whisky industry £500 million in exports.

The SWA is also taking action through the Scottish Court of Session by applying for Judicial Review of the legislation on the grounds that the law on minimum pricing is in breach of the UK's EU Treaty obligations and contrary to the terms of the Scotland Act 1998. The European Spirits Organisation (CEPS) and Comité Vins (CEEV), the European wine body, have joined the SWA in the legal action in the Court of Session.

Gavin Hewitt, chief executive of the Scotch Whisky Association, said: "Scottish Ministers repeatedly claimed during the Parliamentary process that as a premium product Scotch Whisky would not be affected by minimum pricing. The truth is now out. The Scottish Government's own final impact assessment reveals 85% of Blended Scotch Whisky will be increased in price as a result of an MUP of 50p.

"Moderate drinkers are being forced to pay for an un-targeted, misguided and illegal policy. MUP will not tackle the problem of harmful and hazardous drinkers and will damage one of the country's leading industries. We employ 10,000 people in Scotland, with many jobs in rural communities or economically vulnerable areas, and support a further 35,000 jobs in the supply chain across the UK."

José Ramon Fernandez, secretary general of Comité Vins, a co-petitioner to the Scottish Courts on behalf of the European Wine Committee, said: "We believe the setting of a minimum price contravenes rules governing the wine common market organisation across the EU. It will also act as a discriminatory barrier to trade for imported wines from companies which enjoy a competitive lower cost base, incompatible with EU and international trade law."

Paul Skehan, director general of the European Spirits Organisation (CEPS), another petitioner to the Scottish Courts, said: "European law is clear - minimum pricing is an illegal barrier to trade. We agree alcohol misuse must be tackled, but other more effective, more proportionate, less trade restrictive measures are available."