The debate on minimum pricing for alcohol has become increasingly polarised. Some believe that the rising burden of harm due to alcohol demands effective government intervention and others believe that concern for Scotland's health is not sufficient grounds for curbing market freedoms that have enabled unprecedented growth in the production, trade and promotion of alcohol.
A recent opinion by the Advocate General of the European Court of Justice which considered the legality of minimum pricing for tobacco has reignited claims that the introduction of minimum alcohol pricing in Scotland could be illegal. However, the European Commission stated in July 2009 that the Council Directive covering excise duties on alcohol "does not prohibit Member states from setting minimum retail prices for alcoholic beverages". This suggests that minimum pricing is permissible under EU trade law if it applies to domestic and imported products alike and it does not constitute a barrier to trade. If the prices set were shown to be a barrier to the free movement of goods then there would need to be a public policy justification that the harm is so great to allow rules governing international trade to be overridden. With the number of alcohol-related deaths in Scotland increasing by 150% in a generation and alcohol related harm costing Scotland over £2 billion pounds every year, we believe that such a case could be made.
It is sometimes argued that taxation offers a more effective and less trade-restrictive means of increasing alcohol prices, however, alcohol retailers do not necessarily pass tax increases on to consumers. Alcohol is frequently used as a 'loss leader'. If tax increases are not passed on, the price of alcohol doesn't go up and people can keep on drinking the same amount. Minimum pricing, on the other hand, cannot be undercut by loss-leading and below-cost selling.
Controls on price and availability have been identified as one of the most effective measures that governments can implement to reduce harm caused by alcohol. Minimum pricing is not a panacea and needs to be part of a broader strategy but without effective controls on price and availability, any other policy measures will have limited effect.
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