Scotland politics

Minimum alcohol pricing: Position of Bulgaria

Opinions of European Union member states on Scottish government plans for minimum alcohol pricing have been released to BBC Scotland.

Position of Bulgaria on Notification 2012/0394/UK on the draft Alcohol (minimum price per unit) (Scotland) Order

A proposal has been submitted to the Scottish parliament for the introduction of a minimum price per unit of quantity of alcohol products sold retail for human consumption.

The minimum price is expected to be 50 pence per unit of measure of alcohol for all alcohol products sold within the country from April 2013. The aim of the legislation is that a given alcohol product should not be sold to consumers for a price below the minimum price.

With the above in mind, the lowest retail price for a bottle of wine will on average be around GBP 5. At present Bulgarian wines are sold in Britain for around GBP 3.

The minimum price of 50 pence will be valid for the next 2 years, and may be changed after that period has elapsed. A version of this measure is being considered for application throughout the whole of the United Kingdom.

These legislative changes will create many obstacles to trade for Bulgarian wine and spirit producers, export of these goods to Great Britain will be significantly affected, and this is an important sector for the Republic of Bulgaria.

In view of what has been emphasised above, the introduction of a minimum price per unit of quantity for alcohol products in Scotland would lead to the creation of a non-equivalent position with regard to the supply of alcohol products.

Such a step by the Scottish government would inevitably have an impact on the alcoholic drinks market in the United Kingdom as a whole.

The change to the minimum price levels for wine and alcohol products would lead to a change in consumption trends and probably to a contraction of the market. The products that will be particularly affected are those in the lower price bracket, into which Bulgarian wines fall.

This would mean a contraction of sales of Bulgarian wines.

With regard to the market structure, introduction of the above restriction will have the least effect on more expensive alcohol products like whisky, etc. We consequently do not think that this measure will lead to the sought-after effect on health.

We consider that the introduction of a minimum price for alcohol products in Scotland is a breach of the principle of free trade, and could be interpreted as a hindrance to the 'free movement of goods'.

This restriction could also give rise to reciprocal measures in countries outside the European Union which are importers of alcohol products and wines from the European Union.

This would in turn have a negative impact on the export of wines and alcohol products from European Union Member States.

Last but not least we wish to point out that the Republic of Bulgaria is not only an importer but also a serious producer of alcohol products, and the introduction of such a restriction, which could give rise to administrative counter-measures, will lead to negative consequences for Bulgarian exports to third countries.

Bearing in mind that the majority of businesses in the sector are small and medium-sized enterprises, the measure adopted by Scotland also runs counter to the principle that is generally accepted in the European Union: 'Think small first'.

In the light of the above, we consider that the introduction of this measure by Scotland is in breach of the principle of free competition, and would force producers of alcoholic drinks from the European Union to sell at artificially high prices (this would especially affect products such as wines that fall into the lower price bracket).

In this regard, such a restriction is counter to Article 34 of the Treaty on the Functioning of the EU, namely:

Article 34 (ex Article 28 TEC) - Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.

In the sense of the Article cited, the introduction of a minimum price may be regarded as a measure that has an equivalent effect to a quantitative restriction, since it would lead to a discriminatory effect on producers of alcohol products from other EU Member States which bring such products into Scotland.