The Scotch Whisky Association And Others Against The Lord Advocate And The Advocate General
| Jurisdiction | Scotland |
| Judge | Lord Menzies,Lord President,Lord Brodie |
| Judgment Date | 21 October 2016 |
| Neutral Citation | [2016] CSIH 77 |
| Court | Court of Session |
| Date | 21 October 2016 |
| Published date | 21 October 2016 |
| Docket Number | P762/12 |
FIRST DIVISION, INNER HOUSE, COURT OF SESSION
[2016] CSIH 77
P762/12
Lord President
Lord Menzies
Lord Brodie
OPINION OF THE COURT
delivered by LORD CARLOWAY, the LORD PRESIDENT
in the reclaiming motion
THE SCOTCH WHISKY ASSOCIATION AND OTHERS
Petitioners and Reclaimers;
against
THE LORD ADVOCATE
First respondent;
and
THE ADVOCATE GENERAL
Second respondent:
Petitioners: O’Neill QC, M Ross; Brodies LLP
First Respondent: Moynihan QC, Irvine; Scottish Government Legal Directorate
Second Respondent: Simpson QC, MacGregor; Office of the Advocate General
21 October 2016
Introduction and Procedure
[1] Almost five years ago, on 31 October 2011, the Scottish Government introduced a very short Bill to the Scottish Parliament. The Bill was passed, following a Stage 3 debate, on 24 May 2012 with 86 MSPs voting in favour, only 1 against, with 32 abstentions. The Bill became the Alcohol (Minimum Pricing) (Scotland) Act and received Royal Assent on 29 June 2012. The Act amends the Licensing (Scotland) Act 2005 by adding a new paragraph to Schedule 3. This paragraph reads:
“6A(1) Alcohol must not be sold … at a price below its minimum price”.
The minimum price is to be calculated according to a formula, viz.: MPU x S x V x 100 (minimum price per unit x strength of the alcohol x volume of the alcohol in litres).
[2] The Act empowers the Government to specify the MPU “by order”. On 14 May 2012 the Cabinet Secretary for Health, Wellbeing and Cities Strategy (now the First Minister) announced that 50p per unit was the preferred minimum price. A draft order (The Alcohol (Minimum Price per Unit) (Scotland) Order 2013) was published, setting the MPU at that level. In practical terms, were the Act and Order to come into force, a 70cl bottle of spirits with an ABV (alcohol by volume) of 40% (70°) would retail at a minimum of £14.00 (50 x 40 x 0.7). A 75cl bottle of wine with an ABV of 12% would cost at least £4.50. A pint of lager with an ABV of 4% would cost £1.14 or more.
[3] In terms of the Act, the minimum pricing provisions are to expire at the end of a 6 year period, unless the Government provide “by order” otherwise after 5 years. There is a requirement that they lay before Parliament a report on the operation and effect of the minimum pricing provisions during the 5 year period. The report must contain information on the effect of minimum pricing on the “licensing objectives” of the 2005 Act. These include the prevention of crime and disorder, protecting and improving public health and protecting children from harm (2005 Act, s 4). It must also advise on its effect on license holders and alcohol producers, both of whom require to be consulted during its preparation. In this sense, the provisions can be regarded as experimental in nature. However, the legislation is not yet in force and, without that, no experiment can take place.
[4] As will be seen, the Government’s contention is that the Act will bring health benefits of one sort or another to at least part of the population. On 19 July 2012, the petitioners, who represent a variety of alcohol related interests, not least whisky distillers and wine and spirit importers, presented a petition for judicial review challenging the legislation’s lawfulness.
[5] Originally, one of the grounds of challenge was that the legislation was outwith the competence of the Scottish Parliament, since it related to a reserved matter in terms of the devolution settlement contained in the Scotland Act 1998. This was not insisted upon, following Imperial Tobacco v Lord Advocate 2013 SC (UKSC) 153. A second ground was that the legislation restricted the freedom of trade guaranteed by Articles 4 and 6 of the Union with England Act 1707 and its English counterpart. That was rejected by the Lord Ordinary in the Opinion accompanying his interlocutor of 3 May 2013. This left three grounds, all based upon the legislation’s incompatibility with European Union law, thus rendering it “not law” (1998 Act ss 29(1) and (2)(d); 54(2) and (3) and 57(2)). One was that the legislation was in breach of Article 6(2) of Regulation (EC) 110/2008, which provides that “member states shall not prohibit or restrict the import, sale or consumption of spirit drinks which comply with this Regulation”. It had been argued that this stopped any measure restricting the consumption of spirits. This too was rejected by the Lord Ordinary. None of these grounds were revived in this reclaiming motion (appeal).
[6] The remaining grounds are, first, that the legislation would breach Article 34 of the Treaty on the Functioning of the European Union, by imposing a quantitative restriction on the import (free movement) of goods. The first respondent accepts that it does have that effect, but maintains that the measure is justified in order to protect health and life under Article 36. Secondly, there is an argument based upon the operation of the Common Organisation of the Markets in agricultural products (then Regulation (EC) No 1234/2007 as amended by No 491/2009; the Common Agricultural Policy). The Lord Ordinary, who refused the prayer of petition in his interlocutor, held that the measure was objectively justified under Article 36. He did not consider that the argument on the CAP was well founded, given the limited effect of the Regulation on prices.
[7] The reclaiming motion seeks to review the Lord Ordinary’s interlocutor. In the course of the hearing before him, the petitioners had suggested that he might make a Reference for a preliminary ruling to the Court of Justice of the European Union, if he considered that the answer to any question about the interpretation of EU law was not clear. The Lord Ordinary did not consider that the justification provisions of Article 36 required elucidation. He was satisfied with sufficient certainty that the petitioners’ arguments based upon Regulation 1234/2007 fell to be rejected. He did not therefore regard it as appropriate or necessary to refer any questions to the CJEU. However, on 3 July 2014, after a hearing of the reclaiming motion before an Extra Division, the case was referred. The Judgment of the CJEU was obtained on 23 December 2015. Thereafter, the hearing of the reclaiming motion fell to be resumed and determined in light of, inter alia, the CJEU’s answers (infra) to the questions posed in the Reference.
[8] Looked at from a distance, the litigation throws into sharp focus a measure, which a government deems to be one which will serve to improve the nation’s health, with the commercial interests of the producers and sellers of alcohol, whose ability to trade across the EU is protected by Article 34 and the Common Market. This is not an uncommon dilemma (see World Health Organisation: Global Strategy to reduce the harmful use of alcohol (2010) c 1, para (6(d) “Balancing different interests”).
The History of the Legislation
The Policy Memorandum
[9] The Government had announced its intention to look at minimum pricing as early as 2007. A strategy discussion paper, namely Changing Scotland’s relationship with alcohol (Scottish Government, 2008), had been published. Extensive consultation had taken place during the unsuccessful promotion of minimum pricing in the earlier Alcohol etc. (Scotland) Bill 2009.
[10] The new Bill was accompanied by a substantial Policy Memorandum, prepared by the Government, which contained a large number of references to sundry papers and articles. The Bill was described as part of the strategic approach to tackling alcohol consumption more generally. This approach had been set out in Changing Scotland’s Relationship with Alcohol: A Framework for Action (Scottish Government, 2009). The two strategy papers were referred to, but not formally produced, in the reclaiming motion.
[11] The Memorandum stated, in an overview (para 3), that the Government considered that the objective of the Bill was that minimum pricing would:
“help reduce alcohol consumption … in particular reducing the consumption of alcohol by harmful drinkers, and reduce the impact that alcohol misuse and overconsumption has on public health, crime, public services, productivity, and the economy as a whole.”
[12] The Memorandum set out (para 6), as part of the background, the stark fact that, since 2000, enough alcohol had been sold in Scotland annually to enable all adults to exceed the sensible male weekly guideline of 21 units on each and every week. In 2010, average sales equated to 22.8 units per person per week; up 11% from 1994. This was being driven (para 20) by off-trade (largely supermarket) sales, which had increased by 52% over the period, compared with a fall of 29% in the on-trade (public houses), and now accounted for two thirds of all sales. Sales were almost a quarter higher than in England & Wales, where they were in decline.
[13] There was “clear evidence” (para 6) that increased consumption was producing increasing harm. Alcohol related admissions to hospital, at 40,000 per annum in 2010, had more than quadrupled since the early 1980s and related to both genders and all age groups. Alcohol mortality had more than doubled over the same period. It was almost twice that in England & Wales. Over the last 30 years, Scotland has had one of the fastest growing rates of chronic liver disease and cirrhosis in the world. Alcoholic liver disease ranked alongside heart disease, stroke and cancer as a “big killer” (para 9). Life expectancy in some parts of Scotland was well short of that elsewhere and, the Government believed, alcohol played a significant part in this inequality. Alcohol discharges from hospital in the fifth most deprived communities were about 7.5 times higher than in the most affluent fifth. Alcohol mortality was 6 times greater (para 10).
[14] The Memorandum set out (para 11) the significant social and economic costs of excessive alcohol consumption. The total was estimated at £3.56 billion per annum, including: £866M in lost...
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