text stringlengths 5 5.67k |
|---|
The first response that can be made to this rhetorical question is that the proposed comparison is, in the present case, between two essentially incomparable values. Ratio |
One is the value of health, in terms of mortality and hospitalisation, coupled moreover with the evident desirability of reducing socioeconomic inequalities in their incidence. Ratio |
The other is the market and economic impact on producers, wholesalers and retailers of alcoholic drinks across the European Union. Ratio |
A second observation is that this comparison is yet further complicated by the fact that it is not for any court to second-guess the value which a domestic legislator may decide to put on health. Ratio |
It is for the member states, within the limits imposed by the Treaty, to decide what degree of protection they wish to assure: as the Court of Justice reiterated in the present case, para 35, with reference to prior case law. Ratio |
The circularity deriving from the qualification within the limits imposed by the Treaty does not help resolve the question what limits there may be on the value that may be placed on life. Ratio |
Would or should a court intervene because it formed the view that the number of deaths or hospitalisations which the member state sought to avoid did not merit or was not proportionate to the degree of EU market interference which would be involved? I very much doubt it. Ratio |
Any individual life or well-being is invaluable, and I strongly suspect that this is why the Court of Justice did not endorse the Advocate Generals third stage enquiry, and treated the issue very lightly indeed. Ratio |
But it follows that I see very limited scope for the sort of criticism that the petitioners make about the absence of EU market evidence. Ratio |
As a matter of fact, it appears that the petitioners case on this aspect was not prominent before the Lord Ordinary. Ratio |
It was however clearly raised before the First Division (paras 165 and 201-205). Ratio |
The First Division approached this case on two bases. Ratio |
First, it concluded on the material before it (para 203) that In EU market terms the effect [of minimum pricing at 50 pence per unit] might be described as relatively minor. Ratio |
The on- trade is unlikely to be adversely affected at all. Ratio |
No doubt some wine from Bulgaria, Romania and Portugal may lose a competitive edge. Ratio |
Their share of the market too is very small, but there will be an effect on the competitive nature of some wines and beers from other EU states. Ratio |
Cheap French brandy may be affected, even if, so far as spirits are concerned, the greater impact will be on domestically produced vodka, whisky and cider. Ratio |
As a broad conclusion on the information available, this does not appear to be challenged. Ratio |
Second, the First Division went on to reject the petitioners case that the information on which it was based was inadequate, taking the view that the detailed exercise of market prediction based on the production of models, for which the petitioners were contending, was neither necessary nor practicable. Ratio |
This leads to a third observation. Ratio |
Whatever the position as to the first two observations, there are also strong reasons for thinking that any attempt to assess the EU market impact in the present area would itself have involved incalculables, which cannot presently be further or more precisely assessed in any way which would be relevant. Ratio |
That conclusion is foreshadowed both in material available at the outset and further material produced to date. Ratio |
At the outset, prior to the 2012 Act, the Scottish Government did not attempt itself or commission any analysis focusing specifically on the EU market. Ratio |
But the BRIA noted under the heading Effect on Market (para 5.114) that: There is no consensus from industry on what will happen to pricing of products and hence the effect on the market in relation to the introduction of a minimum price per unit of alcohol. Ratio |
Some consider all prices will be affected ie those above a minimum price will also be adjusted, others believe it will only be those below the minimum price that will be affected, and others consider it will be somewhere in between. Ratio |
The BRIA continued by recording various possibilities, including switching between categories of alcoholic drink, switching to premium brands once the price differential became small, decimation of own label brands and concentration by retailers on particular products, though which these might be was unknown (paras 5.1... |
Similarly after noting that minimum alcohol pricing would apply to all products, irrespective of which country produces them (para 5.119), the BRIA said that: It has proved extremely difficult to access the level of data required to analyse which individual products are likely to be most affected, and the country of or... |
Again, at para 6.7 the BRIA recorded that the Scottish Government is not able to predict how individual companies and retailers will react to the introduction of a minimum price per unit. Ratio |
A survey had shown no consensus. Ratio |
As regards the effect on producers, again, there was no consistent view among (it appears, Scottish) industry representatives. Ratio |
The BRIA did summarise material indicating that spirits were predominantly, though not exclusively, of domestic origin (paras 5.120-123) and that beer, cider and other alcoholic drinks were both domestically produced and imported. Ratio |
The vast majority of wine was, in contrast, imported from a large number of countries retailing across the range of prices (para 5.124), with the top ten countries of origin of wines selling on the UK market being (in descending order of market share) Australia (21.5% of the market), the USA (14.3%), Italy (14.2%), Fra... |
The BRIA observed that a 50 pence per unit minimum price regime would require an uplift in the average bottle price of wines from each of these countries, except France and New Zealand (the average uplift being 49p for Australia, 60p for the USA, 58p for Italy, 85p for South Africa, 69p for Chile, 60p for Spain, 45p fo... |
Annex A to the BRIA was a Competition Assessment, which identified markets and sectors potentially affected by minimum pricing, including indirectly affected sectors upstream, in the form of drinks manufacturers and distributors/wholesalers (para 4). Ratio |
Under the heading International Competition, it noted (para 30) that: The legislation would apply equally to international producers, wholesalers and retailers trying to enter the Scottish market. Ratio |
Any firms wanting to import high strength, low price products would have to raise their retail prices to comply with the minimum price per unit legislation. Ratio |
This could impact on a foreign companys ability to compete in the domestic market if the company was currently selling at very low margins in order to be competitive with domestic products. Ratio |
The Competition Assessment noted that the initial change effected by minimum pricing would be a reduction in the quantities sold of products whose original price lay below the minimum, though the extent would depend on the elasticity of demand (para 36). Ratio |
Retailers would however benefit by the higher prices of the quantities actually sold and might, as in British Columbian experience, benefit by a general raising of the price of higher value products to maintain a differential with those now affected by minimum pricing (paras 36 and 38). Ratio |
The likely distribution of the increased revenues across the supply chain was not known (para 42). Ratio |
In August 2013 and in an updated version in December 2014, NHS Scotland produced for the Scottish Government, and the Court of Justice had before it, a table analysing the price distribution of wine from various countries of origin sold in Scotlands off-trade (where the great bulk of cheap wine is sold). Ratio |
This demonstrates that the majority of the impact of minimum pricing will fall on wine imported from outside the EU, though Italy (with 14.6% of off-trade wine sales), Spain (with 11.5%) and France (with 10.6%) would be affected, selling respectively 31%, 56% and 25% of their wine in Scotland at below 50 pence per unit... |
Germany, Portugal, Bulgaria and Romania had respectively 1.3%, 0.7%, 0.3% and 0.1% of the market, with respectively 2%, 39%, 97% and 84% of their wines being sold at below 50 pence per unit. Ratio |
Another table, which was before the First Division on the reference back from the Court of Justice, showed that none of the 15 wines with the largest off-trade sales values was produced in an EU country. Ratio |
In response to the Court of Justices request, the Scottish Government also produced a table stating in general terms which other alcoholic drinks imported into Scotland would be, or be likely to be, affected. Ratio |
Those thought likely to be affected were all brandy and cognac, about 15% of the branded lager sales market in Scotland, part of the stout market, 87% of which was produced in Ireland, but most of which sold at below 50 pence per unit, part of the cider market, 36% of which comes from EU countries and part of the forti... |
Some effect on other products was thought possible, but unlikely. Ratio |
The petitioners have referred to general statements by the Commission about the wine market and the balance of supply and demand and increased competitiveness reached after many years of structural surpluses. Ratio |
They have also referred to statistical information on wine production within the EU and intra- and extra-EU trade. Ratio |
It is not, however, suggested that this material gives answers to the questions which the petitioners submit that the respondents must answer if they are to satisfy the evidential onus on them. Ratio |
The petitioners suggest that it was incumbent on the respondents to analyse the structure of the wine industries in, say, Romania, Spain, Portugal and Italy, and/or assess how much of the total wine exports of each member state are sold in Scotland, and therefore get some idea of how much MUP [minimum unit pricing] in ... |
Bearing in mind the impossibility of obtaining information about or analysing even the effect on the Scottish retail market and on the relationship between retailers and their suppliers, this appears an unrealistic counsel of perfection. Ratio |
This is to my mind confirmed by reports received in October 2012 and May 2016 by the petitioners from Professor George Yarrow and Dr Christopher Decker entitled Economic Analysis of the impact of minimum pricing on alcoholic beverages in Scotland. Ratio |
These set out in broad economic terms various possible outcomes of a minimum pricing regime, and they advance some firm views about the desirability of a taxation, rather than a minimum pricing, approach. Ratio |
But the reports also suggest that the petitioners criticisms about lack of specificity are misguided. Ratio |
To my mind, they confirm that lack of specificity is essentially inherent in the present situation. Ratio |
Paragraph 2 of the first report states: The detailed analysis is necessarily non-exhaustive, not only because of the time constraints for delivery of this opinion but also because, for reasons to be explained, regulatory policies with the types of characteristics possessed by the MUP scheme are liable to lead to chains... |
Whilst it is possible to identify and analyse the tendencies involved in these chains of consequences, they are impossible to pin down with anything approximating total precision, because in part they are governed by future adaptations and innovations to changed incentive structures, knowledge of which is today necessa... |
I note that, even when examining differences between studies by HMRC in 2010 and 2014 of price elasticities in the alcohol market, the authors in their second report identified a problem of uncertainty, arising from lack of sufficient evidence to make it possible to know on what assumptions the available data should be... |
The authors also stated in their first report (para 6) that, because taxation is, in their view, an obvious and more effective alternative to minimum pricing: [T]here is no need in this case to consider balancing trade-offs between health policy goals and other aspects of economic policy, such as the promotion of unimp... |
Paragraph 6 of this report means that the authors did not attempt an exercise in comparison of opposing considerations. Ratio |
Those considerations are not only incommensurate on their face; their comparison would, in the light of para 2 of the report, involve weighing inherently unknowable uncertainties regarding the nature and impact of minimum pricing on EU trade against the value which it is for national legislatures and governments to pla... |
The Yarrow and Decker reports explain as a matter of general economic theory why and how minimum pricing will be likely to distort the market, by, in effect, suppressing competition or cartelising a part of the market, formerly occupied by lower priced alcoholic drinks, and precluding new entrants into it. Ratio |
This can also be expected to reduce imports. Ratio |
The economic results to this effect are almost self- evident, as the first report states (para 51). Ratio |
But the first report also contains material checking the general theory by reference to a First Brand Ltd survey using retail prices in Scotland, Italy and Spain, with a lesser contribution from Portugal and some limited imports from Bulgaria and Cyprus. Ratio |
That distortion of this nature is likely to occur is not however in issue. Ratio |
What is notable throughout the reports is the repeated caveat that the precise nature and effects of minimum pricing on the market cannot at this stage be assessed. Ratio |
It remains uncertain whether it will lead to destocking or, because of the greater retail profit margin, to retailer concentration on the brands whose price has to be increased to the minimum price. Ratio |
As to this paras 63 and 65 of the first report contain the following passages: 63. Ratio |
[T]he purpose of this analysis [by reference to the First Brands Ltd survey] was principally to capture a more general point that, whilst the MUP will, by definition, lead to a change in prices for those products which are currently priced below the relevant threshold, it is also possible that products currently priced... |
Indeed, although predicting retailer strategies is a somewhat speculative exercise, we think economic logic points to the de-stocking of higher-priced products as a likely outcome. Ratio |
Section 4 of the report entitled The Economic Impacts of MUP in more detail starts with two introductory paragraphs, which include the following: 96. Ratio |
The general conclusion to which economic analysis leads in this case is that it is possible to be very confident that distortionary/discriminatory effects will eventuate, but that it is not possible to evaluate those effects in a comprehensive and precise way. Ratio |
The second report examines new evidence available from a Cardinal Research survey of off-trade prices, and concludes that this does not materially affect the general conclusions reached in the first report, regarding the distorting or discriminating effects of minimum pricing on the market and EU trade. Ratio |
While accepting that the benefits of adherence to Single Market principles (alternatively the costs of setting them aside) are manifestly unquantifiable in any precise way (para 65) and that it would be for the courts, not economists or other experts, to determine what relative weight should be attached to such princip... |
Among the factors to which the authors refer is the fact that taxation would increase the Scottish Governments general revenues, enabling it to devote more funding to promote health, while minimum pricing will increase retailers and, it may be others, profit margins. Ratio |
It is however essentially for the Scottish Government to decide what burden by way of taxation it wishes to impose or, looking at the matter another way, what taxation it requires to raise. Ratio |
It was well aware of the difference in this respect between increased excise or VAT and minimum pricing. Ratio |
Both the BRIA (para 4.3) and the Policy Memorandum (para 29) mentioned it. Ratio |
The BRIA noted that the Scottish Government already had power in other legislation to impose a social responsibility levy on retailers of alcohol on social and health grounds, the proceeds of which would then be available to tackle health issues. Ratio |
In any assessment which is appropriate of the general proportionality of the proposed system of minimum pricing, due weight must be given to the requirement under the 2012 Act that the system be reviewed after five years, and the sunset provision that it will expire after six years unless renewed by a ministerial decis... |
The proposed system was therefore explicitly provisional, requiring the authorities to take stock of its effectiveness after a period of years and placing the onus of justifying its continuation in the light of experience firmly on the Scottish Parliament at the end of that period. Ratio |
Both the Advocate General (para 85) and the Court (para 57: para 13 above) regarded these provisions as relevant on the issue of proportionality. Ratio |
The Advocate General, at para 85, described the proposed system as somewhat experimental. Ratio |
The Court referred, at para 57, to the possible existence of scientific uncertainty as to the actual and specific effects on the consumption of alcohol of a measure such as the MUP for the purposes of attaining the objectives pursued. Ratio |
When using the word scientific, it cannot have been referring to chemistry or physics. Ratio |
It was clearly referring to the uncertainties experienced even by experts in predicting the precise reactions of markets and consumers to minimum pricing. Ratio |
As the examination above of the available material shows, this applies as much to the effect on EU trade as to any other aspect. Ratio |
The logic of paras 85 and 57 applies as much to the issue presently under discussion as to any other aspect of the proposed system. Ratio |
Conclusion RPC |
The Lord Ordinary and First Division decided that it could reasonably be concluded, on an objective examination of the differing material put before them and now before the Supreme Court, that the proposed system of minimum pricing was proportionate in the sense required by European Union law and now explained by the C... |
It is for the Supreme Court to determine whether this was a judgment that they were entitled to reach. Ratio |
Despite the forceful and very well presented submissions of Mr ONeill, I consider that they were. Ratio |
A critical issue is, as the Lord Ordinary indicated, whether taxation would achieve the same objectives as minimum pricing. Ratio |
Although not all of the points on which he relied for his conclusion on this issue can still stand, the main point stands, that taxation would impose an unintended and unacceptable burden on sectors of the drinking population, whose drinking habits and health do not represent a significant problem in societal terms in ... |
In contrast, minimum alcohol pricing will much better target the really problematic drinking to which the Governments objectives were always directed and the nature of which has become even more clearly identified by the material more recently available, particularly the University of Sheffields April 2016 study. Ratio |
As to the general advantages and values of minimum pricing for health in relation to the benefits of free EU trade and competition, the Scottish Parliament and Government have as a matter of general policy decided to put very great weight on combatting alcohol-related mortality and hospitalisation and other forms of al... |
That was a judgment which it was for them to make, and their right to make it militates strongly against intrusive review by a domestic court. Ratio |
That minimum pricing will involve a market distortion, including of EU trade and competition, is accepted. Ratio |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.