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Trade disappointment at ECJ opinion on MUP

In his long-anticipated published opinion yesterday, the European Court of Justice’s Advocate General appears to have ruled out EU Member States introducing Minimum Unit Pricing except as a last resort when all other avenues - including increasing excise tax – have been unsuccessful in combating alcohol abuse.

In a preliminary judgement EU Advocate General Yves Bot opined that MUP may be introduced by a Member State “only on condition that it shows that the measure chosen presents additional advantages or fewer disadvantages by comparison with the alternative measure”, describing any introduction of MUP as choosing rules “that impose a minimum retail price of alcoholic beverages that restrict trade within the European Union and distorts competition, rather than increased taxation of those products”.

His opinion continued, “I shall add that the fact that the alternative measure of increased taxation is capable of procuring additional advantages by contributing to the general objective of combating alcohol abuse does not justify rejecting that measure in favour of the MUP measure”.

This judgement which suggests that MUP is an infringement of “the principle of the free movement of goods” may well prove a setback for the Scottish and Irish governments’ plans to introduce the measure in an attempt to counter alcohol abuse.

The case was originally appealed to the EU Court of Justice in April 2014 by the Scotch Whiskey Association together with SpiritsEurope and the Comite Europeen Des Enterprises Vins following a ruling by the Scottish Government that it would introduce MUP.

According to the ECJ, Yves Bot had stated that MUP “would only be legal if it could be shown that no other mechanism was capable of achieving the desired result of protecting public health.

“In particular, the advocate general suggests that increasing taxation of alcohol could be an alternative and it would be for the Scottish Government to prove that this was not a suitable means of curbing excessive consumption of alcohol,” stated the ECJ.

 

Reaction

The SWA welcomed the news.

“The opinion encourages us in our long-held view that MUP is illegal when there are less trade-restrictive measures available,” stated SWA Chief Executive David Frost, “There’s a long-term trend of falling alcohol-related deaths and harms in Scotland which suggests that measures in place are working.”

The ECJ is expected to hand down its ruling on the matter late this year or early next year and that ruling usually follows the opinion of the Advocate General.

However Irish reaction from the drinks industry to the published opinion has expressed disappointment all round.

“The Alcohol Beverage Federation of Ireland has noted today’s opinion by the Advocate General of the European Court of Justice on the issue of Minimum Unit Pricing,” stated ABFI, “We are wholly against the sale of cheap alcohol and our members want to work with government to find a solution that will effectively address its sale in this country.

“We believe that a ban on the below-cost selling of alcohol is that solution to addressing the sale of cheap alcohol.

“The issues pertaining to alcohol misuse are complex and cannot be addressed by price alone. The reality is that Ireland already has the most expensive alcohol in the EU.

“We would invite the Department of Health and the various lobby groups that it funds to prioritise finding an effective solution to tackle the sale of cheap alcohol and engaging with us to that end.”

The Vintners’ Federation of Ireland expressed “strong disappointment” at the opinion set out by the European Court of Justice (ECJ) today.

Describing the opinion as “nonsensical”, the Federation is now calling on Minster Varadkar to bring forward the measures recommended by the Public Health (Alcohol) Bill 2015 which deal with the core issues of affordability and availability.

Whilst today’s announcement by the ECJ is an initial indication, this is a big blow to the industry and is absolutely nonsensical,” said VFI Chief Executive Padraig Cribben, The abuse and misuse of cheap alcohol being sold by supermarkets that sell alcohol as a loss-leader needs to be urgently tackled, regardless of the measure.

“As a key industry stakeholder, the VFI has called for action to ensure the safe and responsible sale of alcohol for several years and today’s announcement is a step back in the progress we have made over the last couple of years.

“We’re extremely disappointed by the opinion taken by the ECJ today and now call on Minister Varadkar to continue the work done at home to address alcohol misuse. This includes the core issues of availability, promotion and price.”

Dublin Vintners too were extremely disappointed with the ECJ opinion on MUP, describing the decision as a “lost opportunity to tackle alcohol misuse.

“If high taxes were the solution to alcohol abuse, the problem would have been solved a long time ago in this country,” it stated, believing that such a judgement will have a knock on effect on Government plans to introduce MUP here.

The Association has campaigned for the introduction of minimum pricing for several years as the most effective way of banning below-cost selling of alcohol.

LVA Chief Executive Donall O’Keeffe said today’s decision represented a lost opportunity in terms of public health policy and would also be a blow to publicans.

“The WHO has said that the two main drivers of alcohol abuse are price and availability. Below-cost selling, particularly by supermarkets, has been a huge problem in Ireland, particularly for young people for over a decade,” he stated, “The excise rates on alcohol in Ireland are amongst the highest in Europe and have been in place for generations. If high taxes were the solution to alcohol abuse, the problem would have been solved a long time ago in this country. What high taxes have done is push people towards the off-trade and out of pubs where it’s known people drink more responsibly.

“We wanted targeted action which would focus on the source of the problem. What the Court’s judgment has done, is robbed policy makers of the measure most likely to help tackle alcohol misuse,” he concluded.

For its part, the Irish Government has welcomed the opinion and is encouraged by some aspects.

“I’m encouraged by the opinion of the Advocate General which indicates that Minimum Unit Pricing may be compatible with EU law if it can be shown to be more effective than other alternative measures,” commented the Minister for Health Leo Varadkar TD, “Therefore I will be asking my officials to study his opinion and its implications as we wait for the final judgment of the Court which is expected towards the end of the year.

“In the meantime, the publication of the Public Health (Alcohol) Bill remains a priority. This Bill is now at an advanced stage and I look forward to publishing the Public Health (Alcohol) Bill in the coming weeks.”

The Bill includes provisions for MUP, structural separation and health labelling on products that contain alcohol, restrictions on the advertising and marketing of alcohol, the regulation of sports sponsorship and restrictions on certain promotional activities.

The proposed Public Health (Alcohol) Bill 2015 is part of a suite of measures designed by the Government to reduce alcohol consumption and limit the damage to the nation’s health, society and economy.

 

 

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