Minimum unit pricing on trade sales would breach EU law

By Stuart Stone

- Last updated on GMT

Legislative breach: applying MUP to trade sales would breach EU law, according to a global law firm
Legislative breach: applying MUP to trade sales would breach EU law, according to a global law firm
Applying minimum unit pricing (MUP) legislation on sales to trade buyers would breach EU laws on competition and the free movement of goods, according to a global law firm.

As reported by The Morning Advertiser​, MUP came into force​ in Scotland on 1 May after a lengthy legal battle over its introduction.

There has been speculation that similar policies could soon be up for discussion in England, Wales and Northern Ireland.

However, a specialist in liquor licensing, Janet Hood, claimed the Scottish government backed guidance on 'dual pricing' contradicted MUP legislation and could put retailers at risk of prosecution, and told that the Scottish government is presiding over a legislative “fiasco”.

The government guidance in question suggested that retailers could use the pricing mechanism to sell alcohol below the ceiling unit price to trade buyers, despite no exemption from MUP for trade buyers existing in legislation.

Scottish government health secretary Shona Robison acknowledged that legislation around MUP would need to be redrawn after these anomalies were highlighted. Such a change could mean that MUP would apply to pubs.

Breach of EU law

However, competition lawyer Martin Rees, a partner at law firm Squire Patton Boggs, said that the application of MUP to trade sales would be in breach of EU law.

He told The Morning Advertiser​ that applying MUP to trade sales would be outside of the scope of the European Court of Justice and the Supreme Court’s decisions on MUP, and would breach European Union competition law and rules around the free movement of goods between member states.

The justification given, and upheld by the UK Supreme Court, for the introduction of MUP was that it tackled a public health objective – problem drinking among Scotland’s most vulnerable – by specifically restricting retail sales of alcohol to them in a way that wasn’t achievable by increasing excise duty, for example.

According to Rees, the application of MUP to trade sales would be a breach because it wouldn’t tackle problem drinking among the vulnerable in society, as price ceilings would be imposed on businesses rather than someone buying alcohol who was perceived to be vulnerable.

MUP and its adverse impact on free movement of goods and competition, would therefore not be deemed proportionate to achieving a public health objective and wouldn’t be covered by the Supreme Court and European Court of Justice’s justification.

According to Rees: "It's the objective which is justified and, according to the national courts, proportionate. There's no less restrictive way of doing it.

"Trade sales are nothing to do with the objective which justifies the restriction.

“Therefore, inevitably they're not covered by the justification and if it's not covered by the justification it's contrary to EU law. There's no doubt about that."

MUP legislation would need to be amended to exempt trade sales from price ceilings and explicitly specify that the measure only applies to retail sales of alcohol in order for it to be covered by the justification of public health, and remain lawful, according to Rees.

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