New legal threat to SNP's alcohol crackdown

A SECOND plank of the Scottish Government's flagship approach to tackling the country's booze culture appeared under threat last night.

Serious legal doubts were raised over the plans to set minimum prices for drinks, with experts warning that the controversial proposals could face court challenges in three different areas – European competition law, UK competition law and judicial review under the Scotland Act.

The SNP administration suffered a major setback last week when MSPs voted against its plans to raise the minimum age for buying alcohol in shops from 18 to 21.

That age-limit plan was to be part of a comprehensive assault on alcohol abuse and binge drinking. Other proposals included minimum pricing for alcohol, drink-only aisles at supermarkets, a curb on window advertising in off-sales and a ban on giveaway booze promotions in supermarkets.

All parts of the strategy, masterminded by Kenny MacAskill, the justice secretary, have been criticised by the drinks and retail industries, but now legal experts have added to the Scottish Government's problems, warning that the minimum-pricing policy might run into a series of different court challenges.

Ministers want to set minimum prices to drive up the cost of cheap lagers and ciders popular among teenagers.

In their initial consultation document, ministers suggested a price of 35p per unit of alcohol, a level that would raise the price of Strongbow cider rise by 27 per cent and McEwan's Export Premium by 35 per cent, but would leave Buckfast tonic wine much the same as it is now.

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.

Critics warned of the variable impact of the minimum-pricing proposal when it was announced in the summer, and Catriona Munro, a competition law partner at Scottish legal firm Maclay Murray & Spens, said then there could be "issues" with competition law.

Now Ms Munro and her colleagues have done detailed work on the Scottish Government's proposals and have compiled a more comprehensive critique.

They have concluded that, on the limited information made available by the SNP government, there are serious doubts over the minimum-pricing proposals on three different fronts:

&149 There could be a challenge to the policy under EU competition law, either from a foreign drinks manufacturer or a British retailer or manufacturer;

&149 There could be a challenge to the policy under the UK's competition laws, through the Office of Fair Trading;

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

Angus Evans, a specialist in competition law at Maclay Murray & Spens, said one potential problem would come when the Scottish Government decided what price to set as the minimum for alcohol.

He said this would have to be done with the drinks industry, because ministers would need expert advice, but this would lead to problems.

He said: "Somebody could complain under the EC competition laws. In essence, what you would be saying is, Scotland is part of the UK and it has put into place legislation which rubber stamps an illegal agreement to fix prices.

"There would also be an argument that, if the Scottish Government is setting the price of alcohol, that could be seen as a competitive disadvantage for companies in other countries.

"If they set the price too high, if you are a Bulgarian making wine, all of a sudden, this change makes it difficult for you to compete. But it's going to be more serious with spirits because Scotland has its own industry. The EC might see that as a real protectionist measure."

Mr Evans did not believe that the Office of Fair Trading would be in favour of a move that set different price regimes on different sides of the Scotland-England Border as this would simply encourage greater use of internet sales and cross-Border booze tourists.

He went on: "There is also a question mark as to whether the Scottish Government has a right to do this under the Scotland Act. Health policy is devolved but competition policy is reserved."

A spokesman for the Scottish Government said: "(We have] made a range of bold proposals to tackle Scotland's cultural problem with alcohol. From raising the age of purchase in off-sales to 21 to introducing minimum pricing based on alcohol content, we believe these can tackle the alcohol misuse that's costing Scotland dearly.

"As ever, we will proceed on the basis of our own legal advice and not that of others. We are satisfied that the Scottish Parliament has the legal competence to implement our policies."

But Murdo Fraser, the deputy Conservative leader, said it appeared as if the Scottish Government's whole approach to alcohol was starting to fall apart.

He said the existing laws had not failed – it was just that the authorities had failed to use them.

"The blanket approach to minimum pricing is wrong. We should be targeting problem drinks and problem drinkers, not penalising everybody," he said.

Steps to tackle drinking abuse

THE Scottish Government's plans for a crackdown on alcohol include:

1 Raising the age limit for off-sales to 21: This has been condemned by students (including SNP students) and opposition parties, who claim the authorities should enforce existing laws better, not make criminals out of students and young drinkers. Last week, the Scottish Parliament voted by 72 to 47 to oppose this plan.

2 Minimum pricing for alcohol: The Scottish Government wants to introduce a minimum price for alcohol based on the alcoholic content of drinks: probably 35p per unit. This has been opposed by drinks manufacturers and retailers and now the legality of the proposal has been questioned. Competition lawyers have warned it could be challenged under European competition law, under UK competition law and by judicial review under the Scotland Act.

3 Separate aisles in supermarkets and shops: The Scottish Government wants to make the buying of alcohol a "special case purchase", like buying cigarettes, and wants to follow Northern Ireland, which has separate aisles for alcohol. However, this has been criticised by Diageo, the world's biggest drinks company, as "unnecessary and ineffective", and by retailers as expensive.

4 Ending loss-leader-type promotions: So-called "Bogof" offers – buy one get one free – have already been banned from on-sales and the Scottish Government wants to extend this to off-sales, too. Concerns have been raised about how this would dove-tail with the minimum pricing policy, but this is the one area that has had the least criticism from the trade and may be the most likely to survive into law.

5 Introducing a "social responsibility fee" to pay for consequences of misuse: This would be a fee that certain pubs, clubs and off-licences would be charged to help pay for late-night policing and other services linked to alcohol misuse. The Scottish Grocers Federation said the "social responsibility fee" was a tax that could threaten the livelihoods of small shopkeepers. Councillor Marjorie Thomas, convener of Edinburgh's licensing board, has also expressed caution, warning that city centre pubs were already being hit with increased charges.

6 A ban or a strict curb on window advertising for off-licences: This would greatly restrict what off-licences could use in their windows to promote products inside their shops. John Drummond, of the Scottish Grocers' Federation, said he believed window displays represented "almost their only opportunity" to advertise.

Price list

Asda's own South African red wine 2.50

Asda's own South African white wine 2.50

Asda's Beer Delux, 20 half-bottles 5

Asda's smart price vodka, 70cl 6.79

Tesco's French Red 2.49

Tesco's French White 2.49

Tesco's own beer, one 440ml can 24p

Tesco's Value Vodka, 70cl 6.54

Morrisons Australian Red 2.94

Morrisons Pearly Bay white 2.96

Morrisons Lager, four-pack 97p

Morrisons Vodka, 70cl 7.97

Sainsbury's Basics Spanish Red 2.23

Sainsbury's Basics Spanish White 2.22

Sainsbury's Premium Continental lager eight-pack 2.79

Sainsbury's Basics Vodka 6.54