Minimum Alcohol Pricing: The Ag Balances Populace Health, Merchandise Together With Competition

Angus MacCulloch, Lancaster University Law School

Background to the Opinion

Advocate-General (AG) Bot delivered his Opinion inwards Case C-333/14, ECLI:EU:C:2015:527, on three September regarding plans yesteryear the Scottish Government to innovate a Minimum Unit Pricing (MUP) for retail sales inwards Scotland laid at £0.50 per unit. Before it could live introduced the mensurate was challenged yesteryear the Scotch Whisky Association. At offset illustration the Scottish Government successfully defended their proposal, inwards The Scotch Whisky Association & Ors, Re Judicial Review [2013] CSOH 70, but on appeal the Inner House referred several questions to the CJEU: Scotch Whisky Association & Ors v The Lord Advocate [2014] CSIH_38. The questions referred address the compatibility of MUP with both the unmarried Common Market Organisation (CMO) together with the gratis displace provisions inwards the TFEU. The AG’s Opinion has been hailed every bit a victory yesteryear both sides inwards the dispute, together with on less partisan exam it does give insight into the importance of toll contest to European Union law.

The Compatibility of MUP with the unmarried CMO

Article 167(1)(b) of the ‘single CMO’ Regulation, Reg 1308/2013, sets out that Member States must non allow toll fixing for wine. But the AG notes that the provision is laid out inwards the specific context of Art 167 which governs the laying downward of ‘marketing rules’ to regulate provide [33], especially where the rules are promulgated yesteryear stakeholder ‘interbranch organisations’. He thence found at that topographic point was no direct prohibition of retail toll fixing inwards the CMO, together with Member States retained their shared competence on this issue.

He so turned to the potential for indirect prohibition through the Member States’ obligation non to jeopardise the objectives of the CMO through Art 4(3) TFEU. The Commission argued that regulating retail prices would live opposite to the regulation of the gratis setting of prices, yesteryear denying depression cost producers the pricing advantages encouraged yesteryear the CMO. At [36] the AG laid out that: ‘the gratis formation of prices is the facial expression … of the regulation of gratis displace of goods inwards weather condition of effective competition.’ Minimum retail pricing inwards a Member State would undermine depression cost competitive payoff together with distort competition, together with is thence incompatible with the unmarried CMO [38 & 39]. Notwithstanding this, the existence of the CMO did non preclude Member States from adopting measures which pursue ‘legitimate objectives’ such every bit the protection of world wellness [40]. However, when pursuing such an objective, ‘the regulation of proportionality requires that the national mensurate must really run into the objective … together with must non become beyond what is necessary inwards monastic say to attain that objective’ [44]. The proportionality analysis should live the same every bit used nether Art 36 TFEU, concerning possible Treaty-based limitations on the gratis displace of goods.

The Compatibility of MUP with Art 34 TFEU

The offset notable aspect of the AG’s Opinion inwards relation to Art 34 (the ban on quantitative restrictions or measures of equivalent final result – or MEEQRs – on the gratis displace of goods) is that he undertakes an analysis of whether MUP is a MEEQR, fifty-fifty though both parties to the dispute had accepted it was. Reconciliation of the CJEU’s approaches inwards its previous judgments inwards van Tieggle, Keck, together with Trailers is non easy. Can, later Keck, MUP live characterised every bit a ‘selling arrangement’ together with autumn exterior Art 34 TFEU inwards principle, effectively rendering the finding inwards van Tieggle otiose? The AG avoids the work by, at [58], adopting a hybrid approach which takes elements from all the judgments, including the ‘market access’ bear witness inwards Trailers, thus: ‘a national mensurate may constitute an obstruction non exclusively when, every bit a selling arrangement, it is discriminatory, inwards law or inwards fact, but too when, irrespective of its nature, it impedes access to the marketplace position of the Member State concerned’. If the mensurate hinders access at that topographic point is thence no remove to consider if it is discriminatory, because it volition autumn inside the orbit of Article 34 inwards whatever event. He goes on to brand clear that the loss of the powerfulness to exploit depression cost competitive payoff is inwards itself a hindrance to marketplace position access together with brings MUP inside the orbit of Art 34 TFEU; effectively contemporising van Tieggle reasoning through the Trailers ‘market access’ bear witness [60]. This is peradventure 1 of the most interesting suggestions inwards the Opinion. It gives toll contest special protection every bit a driver of gratis displace inside the internal market. The AG, for completeness, goes on to too hash out whether MUP mightiness live a dynamic selling scheme (like an advertising restriction), but his arguments [66-67], especially those close domestic vino production, are non real convincing.

Moving on to consider the potential justification of a MEEQR nether Art 36 TFEU, the AG offset discusses the discretion available to Member States when deciding on the bird of protection for a legitimate objective. He argues that the Member States must live allowed discretion every bit arrive at of policy choices could live taken inwards these complex areas, but that Member States must adduce evidence to exhibit that they receive got made a suitable together with proportionate selection [87]. The explanation of how the analysis of proportionality should live undertaken, at [91]-[93], is, however, non especially clear. Para [93] is the most troubling, suggesting that the national courtroom should remainder the ‘degree of impediment’ to merchandise against ‘the importance of the objectives pursued together with the expected gains’. Should a domestic courtroom live required to remainder the benefits of merchandise against a world wellness benefit?

When the AG moves onto to a greater extent than straight consideration of MUP he examines a vital inquiry inwards the offset illustration judgment, which I receive got previously addressed elsewhere: the identification of the detail aim of the measure. He suggests, at [116]-[117], that at that topographic point is an ‘ambiguity’ whether MUP’s aim is to tackle, ‘harmful’ and/or ‘hazardous’ drinking, or protect the wellness of all drinkers; it is, however, acknowledged that the national courtroom volition receive got to select the lastly determination on this matter. The AG does select that inwards relation to harmful together with hazardous drinking, notwithstanding the complexities involved, it ‘does non seem unreasonable’ that a Member State mightiness consider MUP an ‘appropriate means’ of attaining the objective [127]. He was too convinced yesteryear evidence presented yesteryear the Lord Advocate regarding the detail impact of MUP amongst other polices inwards relation to harmful together with hazardous drinkers, especially amongst the immature [135]. At this indicate you lot mightiness recall that the Lord Advocate has won over AG Bot, but at that topographic point is sting inwards the tail of the Opinion.

When it comes to the necessity of the mensurate the AG is less convinced, especially when MUP is compared with the alternate policy of a full general increment inwards alcohol duty. At offset illustration the Outer House of the Court of Session rejected a full general increment inwards duty because it did non effectively target the mensurate at harmful together with hazardous drinkers, every bit it would too receive got an impact on moderate drinkers, together with less problematic on-sales consumption. The AG is non convinced yesteryear the declaration that the mensurate is to a greater extent than targeted [147]. The telephone substitution passage comes inwards para [149]: ‘on the supposition that the objective of the rules … is really confined to combating the hazardous together with harmful consumption of alcoholic beverages … I consider that it is for the those responsible for the drafting of those rules to exhibit that increased taxation is non capable of coming together that targeted objective.’ In itself that is non a controversial statement; the burden of proof inwards such an illustration is good established. But he goes on to add together simply about other element: he argues the Lord Advocate would receive got to ‘adduce evidence’ that a full general increment would receive got a ‘disproportionate impact’ on moderate drinkers, together with that it could too receive got a make goodness inwards addressing harmful or hazardous consumption inwards higher income groups who are less probable to live effected yesteryear MUP. He too adds that a full general increment mightiness too receive got simply about other ‘additional advantage’: a contribution to full general wellness objectives. This mightiness ‘constitute a decisive factor that would justify the selection of that mensurate rather than the MUP measure’ [150].

To my hear this is a fake pace at the halt of the Opinion. Increases inwards full general excise duties receive got been the preferred mensurate inwards many of the Tobacco cases referred to inwards the Opinion, but the problems of tobacco together with alcohol consumption are real dissimilar together with suit dissimilar solutions. All tobacco consumption is bad, together with all consumption is essentially the same. That is non truthful of alcohol, fifty-fifty inwards Scotland. Consumption inwards bars together with restaurants poses real dissimilar problems when compared to alcohol purchased for consumption at the domicile or on the streets. Patterns of consumption of dissimilar types of production are too real different. I am far to a greater extent than convinced that the targeting of the mensurate serves a useful purpose. I am too soundless confused every bit to why a full general increment inwards duty, which yesteryear Definition volition impact on all consumers together with all merchandise inwards alcohol, every bit opposed to the limited impact of MUP, is seen every bit beingness less restrictive on trade. Influenza A virus subtype H5N1 full general increment inwards duty must touching on a higher volume of merchandise if goose egg else. I advise the force towards full general duty increases is non really close merchandise at all. Again nosotros catch a policy selection designed to protect toll contest inwards the market. The Tobacco Directives brand their contest destination explicit, but it appears that the AG is using Art 34 & 36 TFEU to accomplish the same final result inwards the gratis displace sphere.

Barnard & Peers: chapter 12

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