Retailers prepare case against SNP's minimum pricing policy

Published on Saturday 20 December 2008 18:37

DRINKS retailers are preparing to take the Scottish Government to court over its controversial plans to introduce a minimum pricing policy to drive up the cost of cheap booze.

Scotland on Sunday understands that organisations representing retailers are consulting lawyers in a bid to challenge the policy developed as a key part of Justice Minister Kenny MacAskill's mission to tackle Scotland's drinking culture.

Lawyers believe that MacAskill's plans could be successfully overturned in three different areas – European competition law, UK competition law or a judicial review under the Scotland Act.

Yesterday a retailing insider said: "The advice we have given is that these proposals are, at best, a grey legal area and I would be anticipating a legal challenge as soon as the SNP announce their final proposals early next year."

In an initial consultation document launched in the summer, ministers suggested a price of 35p per unit of alcohol, a level that would see the price of Strongbow cider rise by 27% and McEwan's Export Premium by 35%, but would leave the cost of Buckfast largely unchanged.

The new structure would not have much effect on the price of malt whisky but would drive up that of supermarket own-brand whisky and greatly increase the cost of mid-market supermarket wines.

The scheme has been designed to increase the cost of cheap lagers and ciders, which are popular among teenagers, and would be introduced in conjunction with MacAskill's controversial plans to ban under-21s from buying alcohol from off-sales outlets.

Diane Turner, an associate in regulatory law with the legal firm Burness, said: "Legal challenges that have been mooted, including the suggestion that it might be in breach of the Scotland Act."

She explained that retailers or manufacturers could take the Scottish Government to judicial review, arguing the policy does not come within the remit of the Scotland Act because it deals with competition law, which is reserved to Westminster.

"Other arguments that have been canvassed include looking at competition law to see whether there are any restrictive trade practices. If this is done in a way in which the industry itself is setting a minimum price, there may well be a breach of law.

"If there is the suggestion that the industry is responsible for some type of price fixing, which perhaps doesn't amount to a full-blown cartel, that could enable a challenge."

The Office of Fair Trading has warned that industry price fixing is illegal.

A third avenue for a legal challenge could be provided under EC competition laws.

A breach of EC laws could occur if it was judged that the higher price resulted in imported drinks losing their competitive edge through the loss of an advantage resulting from lower production costs.

The Scottish Government could be accused of operating an illegal protectionist policy.