The Alcohol (Minimum Pricing) Act 2012 was designed to ensure that in Scotland, an alcoholic product must not be sold at a price below a statutorily determined minimum price per unit of alcohol. Clever pricing avoidance strategies will not work. The Scottish Government indicated they planned to set the price per unit at 50p. The legislation was challenged by the Scotch Whisky Association and two Belgian drinks organisations. The legal challenge spent the next five years winding it's way through the Scottish Courts and the Court of Justice of the EU before landing back in London at the Supreme Court.
There were two main grounds of challenge. Firstly, would imposing a minimum price have an effect on the actual or potential import of wine and spirits from other EU states. Secondly would it have an impact on the Common Agricultural Policy in respect of wine. The answer to the first question was "yes" but if it was a measure to protect health and prevent alcohol abuse then it might be allowed. The answer to the second question depended on whether it was a "proportional" response. The issues finally came down to whether minimum pricing was the only solution to achieving the aims of the legislation, as opposed to general taxation which would affect all drinkers, and was the legislation proportionate. The court accepted that the aims were to reduce "in a targeted way, both the consumption of alcohol by consumers whose consumption is hazardous or harmful, and also generally, the population's consumption of alcohol". It was never the aim to "reduce consumption, even by hazardous and harmful drinkers, and still less by moderate drinkers, to the maximum extent possible regardless of possible economic or social consequences."
The Supreme Court were also swayed by the fact the legislation has a sunset clause and unless it is renewed within six years the Act will fall and before it can be renewed it's impact will have to be reviewed after five years. They decided the Act was not in breach of EU law.
So what does this mean for your tipple of choice? Without getting too technical, it means a 70cl bottle of whisky will cost a least £14 and vodka £13.13. Red wine must cost at least £4.69 per 75cl and cider £2.50 for a 1 litre bottle at 5%. Alcohol in the cheaper range will be most affected. It is less likely to affect fine wine and malt whisky prices (and more surprisingly Buckfast tonic wine) but there may be an inevitable, if slow, indirect effect leading to an increase in price to maintain their premium value in the market.
The proposed level of a 50p minimum price is currently out for consultation until 26 January 2018 with some commentators suggesting it should be raised to 60p. If accepted, that may well affect the balancing exercise the Supreme Court carried out but it remains to be seen if the SWA and friends would have the appetite for a further challenge.
Many across Europe have been awaiting the outcome of this challenge before dipping their own toes in this water. Wales introduced a Bill into the Welsh Assembly in October to do the same as the Scottish Government and are also proposing a 50p unit price. The Westminster Government has noted the Supreme Court decision and is keeping the matter under review. The policy position of Northern Ireland will need to await return of a government in Stormont.
However as a final thought for a Christmas quiz question: What is "MPU x S x V x 100"? The answer is the minimum price of alcohol formula where MPU is the minimum price per unit, S is the strength of the alcohol and V is the volume of the alcohol in litres. You may need a drink at whatever unit price level to work that one out!