Scotch Whisky Association and others v The Lord Advocate and another

A measure restricting intra-EU trade may be justified on public health grounds where it is appropriate to achieve the chosen level of protection and the objective cannot be achieved as effectively by a less trade-restrictive measure. The national court examines the measure objectively on the evidence available when it rules, while respecting the legislature’s choice of health protection.

An alternative is not equivalent merely because it produces similar aggregate health benefits. Its distributional effects and burdens must correspond to the legitimate, targeted objective. Scientific and market uncertainty do not require proof of the unpredictable. A mandatory review and sunset provision may materially support proportionality.

The Scottish Parliament enacted the Alcohol (Minimum Pricing) (Scotland) Act 2012 to require alcohol retailers to observe a minimum price per unit. The appellants contended that minimum pricing infringed articles 34 and 36 TFEU and, for wine, the EU common organisation of agricultural markets. They therefore argued that the measure fell outside devolved competence.

The Outer House rejected the challenge: [2013] CSOH 70; 2013 SLT 776. Following a reference to the Court of Justice, the First Division dismissed the reclaiming motion: [2016] CSIH 77; [2017] 1 CMLR 41.

The central issue before the Supreme Court was whether increased taxation or another less trade-restrictive measure could attain the Scottish authorities’ targeted public-health objectives as effectively as minimum unit pricing.

1. Appeal dismissed unanimously. Lord Mance delivered the judgment, with which Lord Neuberger, Lady Hale, Lord Kerr, Lord Sumption, Lord Reed and Lord Hodge agreed. The proposed minimum-pricing régime was proportionate under EU law.

2. The applicable proportionality inquiry asked whether minimum pricing was appropriate to attain the legitimate public-health objectives and whether those objectives could be attained by measures less restrictive of the free movement of goods. The corresponding assessment under the Single CMO Regulation did not require a separate exercise from that under articles 34 and 36 TFEU. The domestic court had to examine objectively whether the conclusion was reasonably available on the evidence. It remained a reviewing court and had to respect the national authorities’ choice of the degree of health protection.

3. The measure pursued a targeted objective. It sought to reduce hazardous and harmful consumption, particularly the harms associated with cheap alcohol and extreme drinking among deprived groups, while reducing population consumption generally. It did not seek the maximum possible reduction in all alcohol consumption regardless of economic and social consequences. The respondents could rely on later admissible evidence refining an objective that remained within the scope of the aims advanced from the outset.

4. Increased taxation was not an equally effective alternative. Even taxation producing similar aggregate reductions in deaths or hospital admissions would distribute its effects differently. It would burden moderate drinkers and less vulnerable hazardous or harmful drinkers, while targeting harmful drinkers in poverty less effectively. It was legitimate to consider those unwanted burdens when identifying whether taxation achieved the same targeted objective.

5. The EU excise framework did not itself dispose of the alternative-measures issue. For present purposes, the court accepted that an additional regional tax might use more refined alcohol-strength bands. Minimum pricing nevertheless remained more targeted. Proposed combinations of taxation and prohibitions on below-cost sales also presented enforcement difficulties and would produce general price increases.

6. The legislature was entitled to attach very great weight to preventing alcohol-related death, hospitalisation and social harm. The likely EU market distortion was relatively minor, although unevenly distributed, and its precise consequences were inherently unpredictable. EU law did not require the Scottish authorities to predict the unpredictable. The statutory five-year review and six-year sunset mechanism recognised the experimental character of the scheme and strongly supported its proportionality.

1. United Kingdom Supreme Court: Dismissed the appeal and upheld the First Division’s conclusion that minimum unit pricing was proportionate under EU law: [2017] UKSC 76.
2. Inner House of the Court of Session, First Division: Following the Court of Justice’s ruling, dismissed the reclaiming motion: [2016] CSIH 77; [2017] 1 CMLR 41.
3. Court of Justice of the European Union: Answered six questions referred by the Extra Division concerning EU free movement, proportionality and the Single CMO Regulation: Case C-333/14; [2016] 1 WLR 2283.
4. Outer House of the Court of Session: Lord Doherty rejected the EU-law and legislative-competence challenge: [2013] CSOH 70; 2013 SLT 776.