Comment: Scottish Alcohol Bill

Minimum pricing proposals may have grabbed the headlines following the publication of Scotland’s Alcohol Bill towards the end of last year, but other aspects of the Bill are more likely to recieve the OK from the Scottish Parliament. Competition law expert Charles Livingstone, associate at Brodies LLP, assesses the obstacles facing the various aspects of the Bill and gives his verdict on which parts are likely to become law.

UK health secretary Andy Burnham recently proposed a minimum pricing scheme for alcohol products, involving the price of a product being set in line with the number of units it contains.

Though the Prime Minister reportedly ruled out such a policy shortly afterwards, it is noteworthy that a UK Labour minister should be considering such a scheme only weeks after Scottish Labour said it would not support an equivalent scheme in Scotland.

The Alcohol (Scotland) Bill attracted considerable media coverage when it was introduced to the Scottish Parliament last November. Most coverage focused, however, on Labour’s contemporaneous announcement that it would not support the Bill’s minimum pricing proposals.

Like all the minority SNP government’s legislation, minimum pricing could pass only with the support of at least some opposition MSPs. With the Conservatives and Liberal Democrats having previously declared their opposition, the proposals seem doomed (though the Bill continues to make its way through Parliament).

Minimum pricing is not, however, the Bill’s only proposal – it also includes a number of other measures that may be more likely to be enacted.

These other proposals, which take the form of amendments to the Licensing (Scotland) Act 2005, include:

•  Extending to off-sales premises the ban on drinks promotions that give discounts on the purchase of one or more drinks (e.g. “3 for 2”), to which on-sales premises are already subject. By contrast, the ban on promotions encouraging the purchase of larger measures of alcohol is restricted to on-sales only.

•  Restricting all promotional material to the “alcohol display area” of an off-sales premises, adding “branded non-alcoholic products” (e.g. glasses marked with a particular brand) to the list of items that can be displayed in that area, and prohibiting drinks promotions “in the vicinity” of off-sales premises.

•  Requiring all licensed premises to have a policy for verifying the age of customers appearing younger than 21.

•  Requiring licensing boards to consider whether off-sales to under-21s are having a detrimental impact on any area.

•  Empowering licensing boards to vary licensing conditions within their area in relation to matters to be set out in regulations (the Bill’s Policy Memorandum reveals that the government intends to give boards the power to vary the legal age for off-sales purchases – i.e. to raise the age to 21).

•  Allowing the Scottish government to make regulations imposing, or empowering local authorities to impose, a “social responsibility levy” on licensed premises and traders (including holders of public entertainment and late night catering licences). This can be imposed for the purpose of having those premises and/or traders contribute to the expenses the licensing authority incurs in pursuing the licensing objectives (preventing crime and disorder, securing public safety etc.) or remedying any adverse impact on the objectives attributable to those businesses.

These policies may not encounter as much political opposition as minimum pricing, but they may still face obstacles if passed. The Scotland Act 1998 limits the powers of the Scottish Parliament, which may not pass legislation contrary to EU law or relating to an area “reserved” specifically to the UK Parliament.

Minimum pricing could have been particularly vulnerable to challenge given its possible effect on the free movement of goods within the EU – e.g. by pricing cheaper foreign products out of the market (the European Courts recently decided that imposing minimum prices on cigarettes is unlawful, casting doubt over the SNP’s alcohol plans).

Furthermore, a Scottish minimum pricing scheme may also have been challengeable on the grounds that it related to the “regulation of the sale and supply of goods and services to consumers”, which the Scotland Act reserves to the UK Parliament.

The Bill’s other policies may be less likely to fall foul of EU law, but may nevertheless be outside the Parliament’s powers. Outlawing “3 for 2” offers and raising the age limit for buying alcohol may well qualify as “regulation of the sale of goods to consumers”, in which case a court could declare those measures invalid.

With the focus to date having been on minimum pricing, it remains to be seen whether the Alcohol Bill’s other proposals attract any significant opposition from the industry and, if so, how far those opponents are willing to go to challenge them.

Charles Livingstone, 27.01.2010