Scotland politics

Minimum alcohol pricing: Position of Spain

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

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

The Government of the United Kingdom has recently submitted the draft order laid before the Scottish Parliament pursuant to section 146 of the Licensing (Scotland) Act 2005, Alcohol (Minimum Price per Unit) (Scotland) Order 2013 (2012/0394/UK), establishing a minimum sales price for alcoholic beverages of 50 pence (£0.50) per unit of alcohol.

According to the impact study regarding the effects of the establishment of a minimum price per unit of alcohol on companies, the Scottish authorities have stated that the measure is part of the "Changing Scotland's Relationship with Alcohol" strategy, and that this strategy will help to reduce alcohol consumption among the Scottish population, thereby improving public health and achieving social benefits in terms of crime, public services and the economy as a whole.

Furthermore, it specifies that the political objective of improving public health in Scotland would not be achieved by increasing excise duties and taxes on alcohol, whereas the option chosen is expected to achieve a reduction in consumption, as well as a series of objectives that are unrelated to public health.

In light of the foregoing, it is clear that the measure applies both to national and imported products, but it is also clear that a system for setting minimum prices may be detrimental to the marketing of imported products, to the extent that said price prevents the lower cost price of imported products having an effect on the price of sale to the consumer.

Moreover, as expressed in the related reasoning, the measure is intended to eliminate cheaper products from the market, as they are deemed to be the most harmful to society.

By its very nature, the establishment of a minimum price impacts the competitiveness of these products with a view to excluding them from the market, and this effect will mainly concerned products imported from other Member States.

Consequently, we believe that the draft order may constitute a measure having an equivalent effect to a quantitative restriction on imports, inasmuch as that it leads to the price of products being fixed as a function of a series of national objectives, some of which are purely economic, thereby neutralising any competitive advantage held by imported products.

In this regard, it should be noted that the prohibition of measures having an effect equivalent to a quantitative restriction established in Article 34 of the Treaty on the Functioning of the European Union (TFEU) relates, as repeatedly found by the Court of Justice, to any measure that may directly or indirectly, actually or potentially hinder imports from other Member States.

Furthermore, when applying these principles to national price regulation systems, the Court of Justice has repeatedly stated that this type of system applied equally to both national and imported products does not in itself constitute a measure having an effect equivalent to a quantitative restriction, but that it may cause a similar effect when the prices are set at a level high enough that imported products are adversely affected in relation to identical national products, either because they cannot be marketed profitably under the conditions established, or because the competitive advantage generated by their lower cost price is neutralised (Cullet 231/83).

For this reason, the measure would be contrary to the principle of free movement of goods and would contravene Article 34 of the Treaty on the Functioning of the EU, since this application cannot be justified on the grounds of public interest pursuant to Article 36 of the TFEU, which can take precedence over the principle of free movement of goods.