Scotch Whisky Association and Others v The Lord Advocate and another (Scotland)
| Jurisdiction | Scotland |
| Judge | Lord Mance,Lord Neuberger,Lady Hale,Lord Kerr,Lord Sumption,Lord Reed,Lord Hodge |
| Judgment Date | 15 November 2017 |
| Neutral Citation | [2017] UKSC 76 |
| Court | Supreme Court (Scotland) |
| Date | 15 November 2017 |
[2017] UKSC 76
Lord Neuberger
Lady Hale
Lord Mance
Lord Kerr
Lord Sumption
Lord Reed
Lord Hodge
Appellants
Aidan O'Neill QC
Morag Ross QC
(Instructed by Brodies LLP)
Respondent (Lord Advocate)
James Wolffe QC, The Lord Advocate
Gerry Moynihan QC
Lesley Irvine
(Instructed by Scottish Government Legal Directorate Litigation Division)
Respondent (Advocate General)
Philip Simpson QC
John MacGregor
(Instructed by Office of the Advocate General)
Heard on 24 and 25 July 2017
( with whom Lord Neuberger, Lady Hale, Lord Kerr, Lord Sumption, Lord Reed and Lord Hodge agree)
The Scottish Parliament has determined to address health and social consequences which can arise from the consumption of cheap alcohol. The mechanism chosen is minimum pricing. The Alcohol (Minimum Pricing) (Scotland) Act 2012 ("the 2012 Act") will, when in effect, amend Schedule 3 of the Licensing (Scotland) Act 2005 by inserting in the licence which any retail seller of alcohol in Scotland must hold, an additional condition, to the effect that an alcohol product must not be sold at a price below a statutorily determined minimum price per unit of alcohol. The minimum price is to be set by the Scottish Ministers by secondary legislation. The current proposal is that it should be 50 pence per unit of alcohol. The Scottish Ministers have undertaken not to bring the 2012 Act into force or to make any order setting a minimum price until final determination of the present proceedings. The 2012 Act contains a requirement for the Scottish Ministers to evaluate and report to the Scottish Parliament on the operation and effect of the minimum pricing provisions after five years, and a provision terminating the operation of those provisions automatically after six years, unless the Scottish Ministers by order affirmed by the Scottish Parliament determine that the minimum pricing régime should continue.
The proceedings are brought by three petitioners: The Scotch Whisky Association and two Belgian organisations which I can for economy call "the European Spirits Organisation" and "the Comité Européen des Entreprises Vins". Their case has been presented by Mr Aidan O'Neill QC. The respondents are the Lord Advocate representing the Scottish Ministers and the Advocate General for Scotland representing the United Kingdom government. In the petitioners' submission, the 2012 Act and the proposed system of minimum pricing are contrary to European Union law, and so outside the competence of the Scottish Parliament and the Scottish Ministers by virtue of sections 29(2)(d) and 57(2) of the Scotland Act 1998. This (with other objections not now pursued) was rejected by Lord Doherty in the Outer House: [2013] CSOH 70; 2013 SLT 776. On appeal to the Inner House, the Extra Division on 3 July 2014 referred six questions to the Court of Justice. In response, Advocate General Bot delivered his opinion on 3 September 2015, and the Court of Justice gave its judgment on 23 December 2015: ( Case C-333/14) [2016] 1 WLR 2283. On the matter returning to the First Division for determination, the appeal was on 21 October 2016 dismissed for reasons given in a single judgment of the court given by the Lord President, Lord Carloway: [2016] CSIH 77; [2017] 1 CMLR 41. The matter now comes to the Supreme Court with permission granted by the First Division.
There are two limbs to the petitioners' challenge under EU law to the 2012 Act and to the principle of minimum pricing. First, it is submitted that they conflict with article 34 of the Treaty on the Functioning of the European Union ("TFEU"), providing that:
"Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between member states."
It is accepted that the proposed minimum pricing is a measure which would have equivalent effect to a quantitative restriction on imports, in that it will have an effect on, for example, actual or potential wine or beer imports from a number of other EU States. The respondents' response is reliance on article 36 TFEU, providing:
"The provisions of articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of … the protection of health and life of humans … Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between member states."
The second limb concerns wine only, and arises from Regulation (EU) No 1308/2013 ("the Single CMO Regulation") establishing a common organisation of markets in agricultural products including wine. The objectives of the common agricultural policy ("CAP") as set out in article 39 TFEU, include increasing agricultural productivity, stabilising markets, assuring the availability of supplies and ensuring that supplies reach consumers at reasonable prices. Common market organisations ("CMOs") "are based on the concept of an open market to which every producer has free access under conditions of effective competition": so the Court of Justice said in its judgment in this case at para 22. The Advocate General and Court of Justice both also accepted that a member state may adopt measures pursuing the objective of protection of human life and health, although they undermine "the system, on which the Single CMO Regulation is founded, of free formation of prices in conditions of effective competition": paras 25–27 of the Court of Justice's judgment. But the petitioners submit that this involves a different exercise to that arising under articles 34 and 36, in particular a different and potentially more onerous weighing of the proportionality of the measure.
Both limbs have to be examined on the basis of the guidance given by the Court of Justice. The Advocate General was clear in his advice. He took first the position under the Single CMO Regulation. He said:
"44. … I consider that the existence of a CMO covering the wine sector does not prevent the national authorities from taking action in the exercise of their competence in order to adopt measures to protect health and, in particular, to combat alcohol abuse. However, where the national measure constitutes a breach of the principle of the free formation of selling prices that constitutes a component of the single CMO Regulation, the principle of proportionality requires that the national measure must actually meet the objective of the protection of human health and must not go beyond what is necessary in order to attain that objective.
45. As the commission suggests, I consider that the examination of the proportionality of the measure must be undertaken in the context of the analysis that must be carried out by reference to article 36 TFEU.
46. Consequently, I propose that the answer to the first question should be that the single CMO Regulation must be interpreted as meaning that it does not preclude national rules, such as those at issue, which prescribe a minimum retail price for wines according to the quantity of alcohol in the product sold, provided that those rules are justified by the objectives of the protection of human health, and in particular the objective of combating alcohol abuse, and do not go beyond what is necessary in order to achieve that objective."
Turning to articles 34 and 36, he noted that the proposed minimum pricing appeared to be contrary to article 34, on which basis the next step was to consider whether this was justified under article 36. As to this, he said:
"71. A barrier to the free movement of goods may be justified on one of the public interest grounds set out in article 36 TFEU or in order to meet overriding requirements. In either case, the restrictions imposed by the member states must none the less satisfy the conditions laid down in the court's case law as regards their proportionality.
72. In that regard, in order for national rules to comply with the principle of proportionality, it is necessary to ascertain not only whether the means which they implement are appropriate to ensure attainment of the objective pursued, but also that those means do not go beyond what is necessary to attain that objective: Berlington Hungary Tanácsadó és Szolgáltató kft v Magyar Állam (Case C-98/14) [2015] 3 CMLR 45, para 64.
73. Although the words generally used by the court seem most frequently to result in only two different stages of the control of proportionality being distinguished, the intellectual exercise followed in order to determine whether a national measure is proportionate is generally broken down into three successive stages.
74. The first stage, corresponding to the test of suitability or appropriateness, consists in ascertaining that the act adopted is suitable for attaining the aim sought.
75. The second stage, relating to the test of necessity, sometimes also known as the 'minimum interference test', entails a comparison between the national measure at issue and the alternative solutions that would allow the same objective as that pursued by the national measure to be attained but would impose fewer restrictions on trade.
76. The third stage, corresponding to the test of proportionality in the strict sense, assumes the balancing of the interests involved. More precisely, it consists in comparing the extent of the interference which the national measure causes to the freedom under consideration and the contribution which that measure could secure for the protection of the objective pursued."
He went on to make the important point that "judicial review of the proportionality of the measure should be marked by a certain degree of restraint"...
To continue reading
Request your trial
-
Mark Rostron v Guildford Borough Council
...referred to as proportionality stricto sensu: see Lumsdon supra at [33], Scotch Whisky Association and others v the Lord Advocate [2017] UKSC 76 per Lord Mance at [6], [9], [15]–[16] and 17 see also the finding by Lord Mance at [63] that the courts in Scotland had correctly applied this te......
-
Transport for London v R Uber London Ltd
...and is not confined to considering the material available when the decision to implement the national measure was taken: Scotch Whisky Association v Lord Advocate 2017 SLT 1261 at 41 However, a public authority should not be afforded the same margin of appreciation in relation to justificat......
-
Goralczyk v Secretary of State for the Home Department
...[2015] 3 WLR 121; [2016] 1 All ER 391; [2015] 3 CMLR 42; [2015] HRLR 12; [2015] Crim LR 894 Scotch Whisky Association v Lord Advocate [2017] UKSC 76; 2018 SC (UKSC) 94; 2017 SLT 1261; 2018 SCLR 102; [2018] 2 CMLR 6; [2018] LLR 198 Secretary of State for the Home Department v Straszewski [20......
-
Drinking Up Time: Minimum Unit Pricing Of Alcohol Set To Be Introduced In Scotland Following Landmark Decision
...the recent, unanimous decision in the Supreme Court case of Scotch Whisky Association v The Lord Advocate [2017] UKSC 76, Minimum Unit Pricing (MUP) of alcohol is set to come into force in Scotland from 1 May 2018, setting it apart once again from the rest of the UK when it comes to the sal......
-
Public Interest and EU Competition Law
...in the context of the internal market rules, by the UK Supreme Court in Scotch Whisky Assn’ &Others v. The Lord Advocate & Another [2017] UKSC 76 [{48].266 The Antitrust Bulletin Although the Court has repeatedly recognized the possibility of invoking objective justificationunder Article 10......
-
Mark Lazarowicz and Jean McFadden, The Scottish Parliament: Law and Practice
...the preface is dated September 2017 some later events, such as the Supreme Court's decision in the Scotch Whisky Association case [2017] UKSC 76 about minimum pricing for alcohol, managed to make it in. Nevertheless, in places the emphasis does seem rather more heavily on the origins than t......
-
Minimum Alcohol Pricing: Balancing the ‘Essentially Incomparable’ in Scotch Whisky
...Association and others vThe Lord Advocate and anotherEU:C:2015:845.2Scotch Whisky Association and others vThe Lord Advocate and another [2017] UKSC 76.890 C2018 The Author. The Modern Law Review C2018 The Modern Law Review Limited.(2018) 81(5) MLR Niamh Dunnethus raises important question......