Whisky makers and Brussels stand in SNP’s way on minimum drink pricing

By EDDIE BARNES
Published on Sunday 12 February 2012 00:00

UNDER the modernistic metal and glass roof of the Scottish Parliament’s garden lobby last week, hired out every week by lobbyists and public bodies for receptions and get-togethers, a very traditional Scottish scene was taking place. The occasion was a reception by some of Scotland’s most important industrialists: whisky producers.

On a table were laid out a selection of the country’s finest: Tallisker, Highland Park and Laphroig, to name but three. Politicians, industry figures and journalists all were enjoying the drink and the evening’s atmosphere. Amid the pleasant conversation, whisky sellers spoke of how the trade was rocketing – how, despite the recession, there simply wasn’t the capacity in Scotland to meet the astonishing demand for this most Scottish of products in the booming East. Whisky industry players were flying off to India the following day. Not for a moment would a passing observer have sensed that, as the guests toasted this most Scottish of success stories, a major political row was bubbling up.

This weekend, the leaders of Scotland’s whisky trade are turning up the pressure on members of the SNP administration, some of whom were enjoying their produce last week within the Parliament’s precincts. At the centre of the row is the proposal by the SNP Government to impose a minimum price on every unit of alcohol sold in the country. Health Secretary Nicola Sturgeon is pointing to the enormous damage caused by alcohol to the country’s health and wealth. She points to the backing she has from the police, many of whose officers will be recovering this morning after sweeping up the mess from another drink-addled Saturday night. She is pointing to the support she has from the ambulance crews and the doctors who – likewise – will have spent last night dealing with the darker consequences of a good night out.

Her crusade has won her plaudits. Within her grasp is an Act, enshrining such a minimum price, which will undoubtedly earn the SNP Government the kind of global headlines that the former Lib-Lab administration attained when it led the way by banning smoking in public places. But with the matter coming to a head, Sturgeon is now facing growing questions over the plans – with the representatives of the country’s most precious export leading the charge. The fear is that if Scotland is seen to be setting price for drink in its own country, so other nations will feel emboldened to put up barriers to imported Scotch in theirs. Consequently, and bizarrely, just as the Scottish National Party prepares to bang the drum for all things Scottish ahead of its independence referendum, it appears to be at loggerheads with the most iconic Scottish industry of all, the whisky trade. So has the Health Secretary picked her battle wisely? Or has she bought herself one too many?

At least one thing is not disputed: that the country has a problem with drink is common ground across the board. The Scottish Government has the facts at its fingertips: with the relative price of alcohol having dropped like a stone, the figures show that intake has shot up by 11 per cent since 1994. The English are topers too, the statistics show, but ministers argue that Scotland has a particular issue: for every pint drunk by someone in England, they say, the Scots slurp an extra quarter pint on top. The social costs are immense. The Association of Chief Police Officers in Scotland note that fully a half of people currently in jail say they were drunk at the time of the offence which sent them there. That figure rises to 77 per cent for young offenders. For A&E wards, sober patients appear to be the exception – deaths directly related to alcohol misuse have doubled since the 1980s. And politicians have moved their focus of attention away from pubs and into the supermarket and the off-licence. Alcohol groups note that the average unit of drink in a bar currently costs £1.31. Buy drink and take it home, however, and the average price drops to just 43p. For cider, it is just 20p per unit.

The SNP’s war on excessive drinking has been going on since it came into power in 2007, when Justice Secretary Kenny MacAskill floated the idea of raising the off-sales age limit to 21. That was ditched, but with Sturgeon taking up the mantle, the attempt to push through a minimum price on alcohol took precedence. She failed to win opposition support prior to last year’s Scottish election. This time round however, with the SNP in a majority, the path of the bill seems to be clear. And last week, the Health Secretary appeared to have removed the biggest obstacle to pushing the plans through.

Since first being raised, opponents have argued the measure will breach EU rules on free trade. But, after a visit to meet European Commission health chiefs last week, a spokesman for her declared: “The very clear message from the commission was confirmation that minimum pricing for alcohol is entirely compatible in principle with EU law.” Game over? As the week has gone on, however, the question of whether the Scottish Government – or indeed any EU government – has the power to push through a minimum price has begun to unravel.

The issue revolves around EU laws on free trade and, in particular articles 34 and 36 of the EU Treaty. The first bars member states from restricting the free flow of goods from one to another – by for example, supporting goods in their own state over those of another. The latter allows a “public health defence” to breaches of the former so long as the member state shows that such measures are “proportionate” and not “arbitrary discrimination”. The upshot is that, in the case of minimum pricing, it all hangs on whether the policy is “proportionate”.

Sturgeon has compiled plenty of evidence for her case. As well as the near unanimous backing from Scotland’s health industry, ministers are pointing to commissioned work from Sheffield University which has attempted to model the impact of the plans. Their findings, in late January, showed the effect would be less than previously thought, but would still cut weekly consumption by 6 per cent, and save 60 lives in the first year alone.

Together with last year’s ban on “buy four, get one free” deals, ministers believe minimum pricing will eradicate the cheap offers which are favoured by problem drinkers in particular. A survey of the responses to Sturgeon’s consultation shows that most alcohol action groups and health campaigners want the minimum price to be set at least 50p, if not more. Such a limit would remove high-strength discount drinks such as cider and vodka from the cheap shelves.

The question is, however, whether problem drinking really would fall. The Sheffield study notes that, with drink more expensive, supermarkets stand to profit to the tune of an extra £100m a year. Consequently, the Office of Fair Trading says, stores may end up piling up profit-earning cheap drink onto their shelves, encouraging more sales. Perversely, the Wine and Spirits Trade Association argues, while a minimum price might reduce consumption for normal drinkers, problem drinkers will always rack up the booze in their shopping trolleys, no matter the price. Or, they add, such drinkers may simply drive down to England (or log onto the web) in search of cheaper deals.

What is favoured among some retailers is a UK wide solution. It comes with the UK Government having proposed a new “floor price” for England and Wales, banning stores from selling drink at a loss. The Co-Operative group argues: “If the Scottish Government wishes to influence the price at which alcohol is sold in Scotland, it would be preferable to achieve it using a ban on sales below cost.” This would also, the stores add, avoid the problem of cross-border raids as Scots headed to England in search of cheaper drink.

Sturgeon is now facing a legal minefield over her own plans. Despite getting apparent EU support, by Thursday that had unravelled when the EU health commissioner whom she had met, John Dalli, declared: “We will have to see first if Scotland’s minimum pricing law on alcohol is compatible with EU law.” This weekend, the Scottish Whisky Association is upping the ante further. Sturgeon, it argues, should settle the doubts over the legality of the plan by officially “notifying” the European Commission. This is the formal procedure when one member state decides to change its rules on a product which could affect the free movement of goods.

Sturgeon has so far declined to take this course of action, telling MSPs last month that “our firm view is that we are not obliged to give notification of the measure”. As a minimum price does not set a new “standard” on alcohol content, it is therefore not changing the nature of alcoholic products, she says. However, in a letter to the SWA last week, seen by Scotland on Sunday, the EU’s Enterprise Directorate states that “the proposal seems, in principle, notifiable”.

Sturgeon has not ruled out notifying the EC of the plan. But if she does the future of the proposal is out of her hands. The clear implication of this sub-plot is that the drinks trade believes that if the plans are put before the European Commission, they will be shot down in flames. Politically, it would be a major lost opportunity for the SNP Government in its efforts to show it has a grip on Scotland’s social problems. It would also hand over the baton to the UK Government, whose ministers are expected to further increase duty, and to push ahead with their plans to bar any below-cost selling.

Sturgeon has already admitted that the proposal will almost certainly end up in the courts, and it is likely to be tested by at least one producer who feels their product is getting a raw deal from the plans. But it may be that the commissioners in Brussels will have their say before that.

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31

MichaelJ.McFadden

Tuesday, February 14, 2012 at 01:56 PM

Kobi, thank you for the explanation. I knew there were politics going on but don't know a lot of the details. . . . . . . . . The minimum pricing argument has been going on all over the UK though ever since the smoking bans kicked in as I understood it. Basically the lobby groups (ASH et al) needed to find a scapegoat to blame for the thousands of pubs that were driven out of business or the pressure to lift the ban might have been too great for them to ignore: the "minimum price" argument was perfect for this since the pub owners had always resented the situation to begin with and it seemed like (or it was made to seem like?) they had a better chance of changing it than they had of rolling back the bans. . . . . . . . . . While I *don't* actually support the argument I made below, I'm surprised that Westminster hasn't actually moved along those lines -- I had been expecting they'd jump in with that "solution" and take the opportunity to grab extra money from yet another "minority group" : the regular drinkers. If more people could be made aware of the root cause of the destruction of their pub community the pressure might be too great to ignore. Google the following two words and one quoted phrase together to read Christopher Snowdon's analysis of the UK "Ban Damage" and you'll see what I'm talking about: snowdon phenomenon "ban damage" : just those four words with the quotes after the last two. . . . . . . . . . The greatest surprise for me is that they (Westminster) haven't already taken advantage of this situation they set up and already instituted the tax grab. Maybe they feel the suffering hasn't been great enough yet for them to get away with it? - - - MJM

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30

Kobi

Tuesday, February 14, 2012 at 08:53 AM

#29 Except the Scottish Executive does not have the powers to do this, as duty (tax) on alcohol is reserved to Westminster. Which is why the SNP have deliberately proposed minimum pricing as they know it is unlawful, they know it will be thrown out, so they can say that if only Scotland were independent we would be able to tax (as you suggest). It is nothing to do with alcohol problems and everything to do with the SNP's desire for separation from the rest of the UK.

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29

MichaelJ.McFadden

Tuesday, February 14, 2012 at 06:14 AM

I must confess, I don't understand the fuss about this minimum pricing. If the government is concerned about people drinking too much why doesn't it do the same thing for alcohol that it does for cigarettes? For cigarettes they take the base cost of a cheap pack (a bit over 1 pound) and then add a tax of about 500% to bring the price up to 7 pounds. . . . . . . . . A liter of cheap Scotch probably goes for at least 5 pounds without taxes, so just add the same 500% tax to bring it up to 30 pounds. People would drink less, domestic abuse would decrease, there'd be a reduction in street violence and noise, AND the government would make a lot more money, medical costs would decrease, and taxes on more responsible people could be reduced! A win-win-win for everyone involved! Who could argue with it? . . . . .. . . . (Hey, it's the same argument the Antismokers use to justify robbing the smokers!) . . .. . . . . Michael J. McFadden, Author of "Dissecting Antismokers' Brains"

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28

Kobi

Monday, February 13, 2012 at 12:43 AM

#27 Try doing some research and understanding what the law says yourself. There has not been a specific ruling on the SNP's proposals as yet, but all the case law in point, and all the legislative provisions point strongly to this being the case. In addition no lawyer who is expert in this field thinks that it is lawful.

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27

Anagach

Sunday, February 12, 2012 at 08:06 PM

22 Kobi What the SNP propose is unlawful under EU law. ----------------------------------------------------------------------------------------------------- Can you link to that ruling please.

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26

Anagach

Sunday, February 12, 2012 at 08:06 PM

Comment removed by moderator

25

Buford Van Stomm

Sunday, February 12, 2012 at 07:55 PM

SNP min isters should refuse to attend conferences or public events at which alcohol is served. ==================================================== or we could encourage them to drink until they are constantly legless.

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24

Publius

Sunday, February 12, 2012 at 10:36 AM

....Politicians, industry figures and journalists all were enjoying the drink.......... That says it all. Alcohol consumption has little to do with price, but everything to do with fashion and culture. If the SNP really wants to cut acohol abuse, it should make alcohol unfashionable. It could start by banning the sale and consumption in all public buildings (including Holyrood). SNP min isters should refuse to attend conferences or public events at which alcohol is served. Once the government has led others will follow.

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23

Kobi

Sunday, February 12, 2012 at 10:26 AM

#19 "You don't know what the proposed legislation is" Try the Alcohol (Minimum Pricing) (Scotland) Bill as published on the Scottish Parliament web-site. As for making the proposals robust, you can't make anything based on this primary legislation, lawful, and Sturgeon is just deliberately misleading you. Again. But it was never her aim to do anything about alcohol problems, merely to get some legislation through that the courts would throw out, so the SNP could claim that this would never happen under an independent Scotland.

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22

Kobi

Sunday, February 12, 2012 at 10:21 AM

##17 You really don't understand what the grown-ups are talking about, do you? What the SNP propose is unlawful under EU law.

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21

Kobi

Sunday, February 12, 2012 at 10:19 AM

#16 "The EU commissioner supports the Alcohol Bill Scotland and hopes that it succeeds." More lies.

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20

edinburgh.reporter

Sunday, February 12, 2012 at 09:36 AM

Surely the most frightening thing in the article is: =============================================================== Scottish Parliament’s garden lobby last week, hired out every week by lobbyists......for receptions and get-togethers,

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19

Finnzz

Sunday, February 12, 2012 at 09:25 AM

Kobi Sunday, February 12, 2012 at 01:14 AM Except the proposed legislation does not comply with EU rules and cannot be made to comply with EU rules, so I think you will find that your claim is utter nonsense. ............................................................................................................You don't know what the proposed legislation is Kobi, therefore you don't know whether it complies or not...................As Sturgeon said, "We’ve asserted minimum pricing in principle is entirely compatible with EU law, provided that certain key tests are met, which is why we’re working very hard to ensure that proposals, when they are brought forward, are absolutely robust.”...

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18

Cagey

Sunday, February 12, 2012 at 07:22 AM

If a producer is going to take the Scottish Government to court, why has no-one taken the UK Government to court for having a much lower duty on Cider. Cider is a largely English product and this clearly was skewing competition to protect a local product. The Scottish Government is proposing a level playing field for alcohol content so they can compete on quality.

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17

Jimmy Fae the West

Sunday, February 12, 2012 at 04:15 AM

14 Kobi Sunday, February 12, 2012 at 01:39 AM #12 "despite the fact that tis does not have any bearing on exports, which is its main market" Rubbish. The SWA has been battling for years to get many of its export markets to reduce artificial barriers to competition, including tariffs, duties and other similar measures, especially in places like India, where preference for local hooch over whisky and the differing rate of duty is presented as a health issue. if Scotland then introduces similar such measures distorting the price of alcohol in whisky's home market, it becomes extremely difficult for the SWA to defeat similar "health-inspired" protectionist nonsense in its export markets. You really could not make the ignorance of nats on this topic up. ______________________________________________________ What a prize twit!!!! It would be illegal to selectively increase the prices of cheap TESCO English scrumpy @80p per Ltr and Spanish plonk @£2.00 per ltr without increasing Scottish produce such as our beers, ciders, wines and whisky too. It is not illegal to apply an equal and fair price across the board despite British twits attempting to find fault in the open and fair policies of the SNP.

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