Ministers face legal headache over cut-price alcohol blitz

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THE Scottish Government is likely to face a major legal challenge after it launched plans to make the country the first in Europe to impose minimum pricing for alcohol.

Ministers yesterday unveiled the move as part of their blueprint to tackle Scotland's "booze culture" – a problem the Scottish Government described as an "epidemic" costing 2.25 billion a year.

The plan includes a ban on cut-price offers that encourage bulk-buying such as "3 for 2" deals, and a "social responsibility" fee for some retailers.

A plan to raise the minimum off-sales purchase age to 21 has been dropped after protests, but individual licensing boards will be put under a legal obligation to consider imposing this age limit for their areas. A proposal to require drink to be sold at alcohol-only checkouts in supermarkets has also been shelved.

But the pricing proposal which may make the minimum price for a standard bottle of 40 per cent whisky 11.20, drew the heaviest criticism from the industry – although the move was backed by some in the licensed trade.

The Scotsman has learnt of at least two trade and retail organisations that are planning a legal case against the proposals, claiming they contravene EU and competition rules.

Gavin Hewitt, chief executive of the Scotch Whisky Association, said: "It is hard to believe any Scottish Government would bring forward proposals that are likely to be both illegal in international trade law and risk damaging the whisky industry.

"Regrettably, minimum pricing achieves both and undermines our success in breaking down illegal discrimination against Scotch Whisky around the world."

The strategy, laid out by Health Secretary Nicola Sturgeon and Justice Secretary Kenny MacAskill yesterday, was dealt another blow after warnings that proposals to ban under 21-year-olds from buying alcohol from shops could also be illegal.

Audrey Ferrie, head of licensing at McGrigors law firm, said there was a possibility the measure, which has already been watered down as a blanket ban by the Scottish Government, may breach people's human rights.

"It is possible there may be a legal challenge to this," she said.

However, ministers have said they are "supremely confident" that their proposals will be legal and that they will be able to see off any potential challenges.

Ministers believe that they will be able to introduce minimum pricing through existing licensing laws by ordering councils to issue a mandatory condition that minimum prices are introduced.

Colin Miller, a competition law solicitor from Biggart Baillie, said that there is legal precedent with books and pharmaceutical products of allowing minimum pricing.

He believes that as the price limits would be set by the government and not through an agreement by traders it would also be safe from competition law challenges.

He added: "The Scottish Government could also make a public interest defence, as was done with books."

The Scottish Government has not publicly set a minimum price, but it currently looks as though it would be 40p a unit, although it could be as high as 45p. Health campaigners have demanded in the past that it is set at 50p.

Using devolved licensing powers means the Scottish Government will not need MSPs to approve minimum prices through further legislation. It seems likely that it will only need to be rubber-stamped by one of the committees.

This has infuriated some retail and trade groups who have said that the biggest change in years to licensing needs proper debate.

Scottish Retail Consortium director Fiona Moriarty said: "We were expecting the government to spell out the legal means they intend to use to achieve one of the most fundamental changes for Scottish customers in recent history. Instead all we have is a hint that existing licensing laws will be used. How can it be right that this major change by-passes full public and parliamentary scrutiny?"

Others described the measure as a "new tax" on Scots.

Jeremy Beadles, chief executive of the Wine and Spirit Trade Association, said: "Millions of Scottish families will wonder why, during the worst recession for a generation, their government wishes to impose a new tax on them by banning promotions and arbitrarily raising prices for everyone."

The SNP has bowed to pressure in its consultation to drop plans for separate tills for alcohol, partly because of the cost to small retailers at a difficult time. It has also watered down the plans for a blanket ban on under 21s buying alcohol from shops because it would have been defeated in parliament.

But, opposition groups have described the proposals as a mess. Richard Baker, Labour's justice spokesman, raised the prospect of "booze cruises" south of the Border.

He said: "They have got to show how these proposals can have a real effect and that Carlisle won't become the new Calais."

The Conservatives, meanwhile, raised concerns about a proposed "social responsibility fee" for retailers, although there were scant details on the proposal yesterday.

Nats' best chance to make a lasting difference

THE SNP's declaration of war on alcohol in Scotland is a risky strategy, but represents the party's best chance of stamping its mark on Scottish society.

As headline policies have fallen by the wayside, the SNP's policy portfolio has looked very thin.

Of course, the Nationalists' biggest goal remains a referendum on independence, but it seems unlikely that they will be able to get it through parliament, especially with the Liberal Democrats confirming that they will vote against.

So ministers have identified alcohol and the love affair Scots have with it as the biggest scourge they can target.

If their policies can really reduce the number of alcohol-related deaths and hospital admissions which mark Scotland out as having one of the worst alcohol problems in Europe, then they will have earned their place in history.

In the back of their minds, the members of Alex Salmond's administration will have the success of the smoking ban in enclosed places.

At the time, that also seemed to be a gamble which would anger voters, but it became a groundbreaking piece of legislation which the rest of the UK followed, and has already had positive effects on reducing smoking and improving people's health.

The SNP also know that, as with the smoking ban, Westminster is looking very closely at Scotland's lead and may well follow suit if the alcohol measures are a success.

But there is still a great risk involved. If the oft-used phrase of a "love affair" with alcohol is actually true, then people are not going to be happy at losing their access to cheap drink.

It throws up images of Father Ted trying to wrestle a bottle off Father Jack in the sitcom, only to end up with a black eye or a bloody nose.

There also serious question marks over whether using price and promotions as a blunt instrument to tackle a social problem will actually have an effect.

The end of wine promotions and increased prices will hit the middle-class dinner party crowd, the limited bans on under-21s buying alcohol could be used against students, and some pensioners will lose their cheap supermaket-brand value whisky.

However, while none of these groups are the ones causing the problems, they are likely to be upset at the government interfering in their lives.

The "ned" drinks of alcopops and fortified wines will not be touched by the minimum pricing.

Then there is the thorny issue of legal problems, particularly with competition laws and EU treaties.

If the Scottish Government was to end up in long, expensive, protracted legal disputes then voters may not be supportive.

It would be even worse if, like Aberdeen City Council, a few years ago, the Scottish Government was to lose and have to bear the costs of these legal battles.

However, this time the SNP is not trying to be populist – the accusation which has been levelled at this administration for almost all its successful measures so far such as abolishing bridge tolls. Instead, they are trying to tackle a social ill that is an embarrassment to Scotland, whether people like it or not.

New Scottish alcohol measures questioned

Why is the Scottish Government proposing these measures?

Because Scotland has some of the worst alcohol-related problems in Europe. This included 42,500 alcohol-related hospital discharges last year; 1,500 deaths per year; soaring rates of liver cirrhosis; the eighth highest consumption in the world and a 2.25 billion annual cost in extra services and lost productivity.

What is the timetable for these changes?

The Scottish Government hopes to have promotions banned by the summer and minimum pricing introduced by Christmas. Much of the rest will be dependent on passing the new Criminal Justice Bill, which could be through by the middle of 2010.

How do the proposals affect wholesalers?

If they supply retailers then wholesalers are exempt from these proposals. However, if they supply members of the public, even through a membership scheme, then measures will apply.

Is there anything to stop booze cruises south of the Border?

No. Studies in Finland show that once their government reintroduced higher taxes, consumption of domestically produced alcohol dropped but booze cruises to Estonia mushroomed. Some believe Carlisle will become Scotland's Calais, which has booze cruisers from England. However, the Scottish Government believes that people will not go in large numbers because of the cost of petrol.

How will this affect internet sales?

As long as the seller is not based in Scotland it will have no effect at all. Kenny MacAskill, the justice secretary, is meeting Jacqui Smith, the Home Secretary, next week, and he will be raising cross-Border sales and ways of restricting them.

Is Scotland leading the way on this issue?

The UK government is looking at introducing legislation to have similar measures, in particular minimum pricing and restrictions on promotions, across the UK. Sources within the Scottish Government have said they believe Scotland is being considered as a test for the rest of the UK.

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