Scotland politics

Minimum alcohol pricing: Position of France

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

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

The authorities of the United Kingdom have notified the Commission of a Scottish Draft Decree on alcohol, setting the minimum price per unit of alcohol at 50 pence.

The Decree is pursuant to the non-notified Act passed by the Scottish Parliament on 24 May 2012 which received Royal Assent on 29 June, which imposes a minimum price per unit of alcohol.

The Decree would come into force in April of 2013.

The legislature's objective is to address a public health concern: it aims to modify consumer behaviour by discouraging consumption of low-priced, high-content bottles of alcohol in order to reduce binge drinking.

For the French authorities, the measure introduced by the Scottish parliament, which could also be adopted by the English government, has an effect equivalent to a quantitative restriction on imports.

It is admittedly justified on the grounds of public morality, public order, public safety and protection of the health and lives of individuals, but, in accordance with Article 36 of the TFEU, it shall not constitute a means of arbitrary discrimination or restriction in disguise.

Yet a change in the minimum price of alcoholic beverages poses the risk of a major impact on sales, causing an imbalance in the market for low-priced wine and spirits.

This draft seems to us to be incompatible with the Treaty on the Functioning of the European Union for two main reasons:

The measure affects producers more so than consumers; effectively, a minimum price closes the competitiveness gap, discourages efforts at market entry and thus also creates a distortion of competition.

Specifically, the average price of a bottle of wine produced in the United Kingdom is higher than the average price of imported wine. Therefore, the competitive advantage of the latter will be particularly affected by this measure.

The measure can be considered disproportionate with respect to the intended objectives, in that these objectives could also be attained by way of other measures which are less restrictive on trade (such as a prevention campaign or taxation).

Taking into account the minimum price set by the Decree, the minimum retail price of a bottle of 12.5% wine would be 4.69 pounds sterling. The United Kingdom is the number one export market for French wines (17%, valued at 1.2 billion Euros).

Given the risk of distortion from the changes entailed by the Scottish bill, the French wine and spirits sector could suffer serious losses.

Finally, if this regulation is adopted by Scotland, third countries who import wine and spirits originating in the European Union may feel authorised to take similar measures.

The effect would be disastrous on the balance of European trade.