SNP curb on drink prices is condemned in America

Published on Friday 11 September 2009 22:07

THE Scottish Government's flagship proposal to tackle the nation's alcohol problem has been attacked by US drinks companies who have urged ministers to abandon their minimum pricing policy.

The Distilled Spirits Council of the United States has warned that the controversial policy may contravene international rules and will affect trade.

The intervention by the national trade association representing America's leading distillers is a further setback for the policy which is at the heart of the Scottish Government's measures to crack down on alcohol abuse.

Peter Cressy, the president and CEO of the Distilled Spirits Council, said: "The Scottish Government's proposal to introduce minimum prices for beverage alcohol products at the very least will adversely affect the conditions of competition in the Scottish market and also may run afoul of international trade rules.

"We would urge the Scottish Government to reconsider its approach and to focus on measures to tackle alcohol misuse that do not disrupt trade."

The SNP plans to introduce minimum pricing to try to stop high-strength drink being sold at "pocket money" prices. The plans would see a minimum price per unit of alcohol, of around 40p in off-licences, shops and supermarkets.

Ministers hope the change will drive up the price of the cheapest vodkas and ciders, but leave most beers, wines and spirits unaffected. But critics argue that a minimum price will hike prices on a range of imported products and leave them uncompetitive when compared with their UK equivalents. A breach of EC laws could occur if it was judged that the higher pricing resulted in imported drinks losing any competitive edge, which they can have as a result of lower production costs.

And some have argued that the Scottish Government could be accused of operating an illegal protectionist policy.

Bill Aitken, the Conservative justice spokesman, said: "I'm not at all surprised that the Americans are upset. We know that there is a drink problem in Scotland, but this is simply not the way forward. This short-sighted policy will end up costing jobs and that is in no-one's interest."

A Scotch Whisky Association spokesman said: "Price controls are likely to break EU and international trade law. The Scottish Government seems intent on giving a green light to countries to introduce health-based restrictions against Scotch whisky, undermining exports and Scottish jobs."

Richard Baker, Labour's justice spokesman, said: "Labour has maintained that any measure brought forward to tackle alcohol misuse must be workable and lawful.

"The SNP say that their plans would have no consequences for the Scottish whisky industry but interventions like this do raise questions about the possible consequences of such a move."

Health secretary Nicola Sturgeon defended the government's plans, arguing that the severity of Scotland's drink problem meant that radical action had to be taken.

She said that one in 20 Scots died of alcohol-related causes and pointed out that 42,000 hospital admissions a year were due to alcohol misuse.

"It would be totally irresponsible of government to ignore the evidence that minimum pricing can be an extremely powerful tool to help tackle this," Miss Sturgeon said.

"Our minimum pricing proposal is not a tax or a tariff – it is a completely fair floor pricethat will apply equally to all alcoholic products, domestic and imported."