Act: O'Neill QC, M Ross; Brodies LLP

First Respondent: Moynihan QC, Duncan QC; The Scottish Government Legal Directorate

Second Respondent: Carmichael QC, J N M MacGregor; Office of the Advocate General

30 April 2014

[1] This reclaiming motion is brought against the Lord Ordinary's decision rejecting the petitioners' challenge to the provisions of the Alcohol (Minimum Pricing) (Scotland) Act 2012 relating to the minimum unit pricing in retail sales of alcoholic beverages in Scotland and to the related draft order of the Scottish Ministers. Before the Lord Ordinary the petitioners advanced an argument to the effect that the introduction of minimum unit pricing for alcoholic drinks in Scotland would be contrary to the provisions of the Act of Union 1707. That argument is no longer pursued by the petitioners - who comprise, in addition to the Scotch Whisky Federation, EU organisations in the spirit and wine sectors, namely, "CEPS"
[1] and "CEEV"
[2]. The challenge to minimum unit pricing now proceeds entirely on the basis of European Union Law.

[2] In view of the fact that the issues in the case are now confined to questions of EU law, on 11 October 2013 the court decided that a preliminary hearing should be held on 28 and 29 November 2013 to consider inter alia whether at that stage a reference should be made to the Court of Justice of the European Union for a preliminary ruling under article 267 of the Treaty on the Functioning of the European Union ("TFEU"). At that hearing, having heard submissions for parties on the matter, we decided on 29 November 2013 that the petitioners' motion for making such a reference to the Court of Justice should be refused at that stage of the proceedings. We indicated however that we were inclined to the view that it was likely that a reference to the Court of Justice of the European Union would be called for in due course, but that we considered it important that we first be more fully addressed at the hearing which had been arranged for February 2014 on the relevant EU law and the reclaiming motion more generally.

[3] While at the hearing of the reclaiming motion in February 2014 neither the petitioners nor either of the respondents actively urged the court to make a reference to the Court of Justice in Luxembourg, counsel on both sides recognised that there were matters upon which this court might conclude that it would be appropriate to seek the guidance of the Court of Justice. Having had the opportunity of considering more fully the decisions of the Court of Justice and the other EU materials to which we were referred and the submissions of counsel, we are now reinforced in the view which we provisionally expressed in November that we should indeed exercise our discretion to request a preliminary ruling.

[4] Putting matters very briefly, it appears to us, first, that in relation to the branch of the petitioners' argument concerned with the compatibility of minimum unit pricing with the common organisation of the market in wine, there is an evident area of uncertainty, since it is not clear whether the line of authority in the EC Court of Justice upon which the petitioners rely falls to be modified or qualified where the common organisation of the market in question deploys a regime of free formation of prices by market forces or is affected by the shared competence provisions introduced by the Treaty of Lisbon. Secondly, although it is now accepted by the Scottish Ministers that minimum unit pricing constitutes a quantitative restriction prohibited by article 34 TFEU unless they can discharge the burden on them of justifying it under article 36 TFEU, and although at first sight the tests to be applied under article 36 might appear to be relatively well established, we have come to the view that - as was heralded in the debate before us - the present proceedings raise aspects of those tests and of the role of the national court which are not clearly established. There are thus aspects relating to the Scottish Ministers claim of justification under article 36 TFEU upon which we consider that it would be of help to have the guidance of the Court of Justice of the European Union.

[5] Having thus reached the view that not all of the issues of EU law in this case are acte clair, which is of course the test if a court of final instance is not to apply the obligation to make a reference, we have also come to the view that it is expedient and appropriate for this court now to request a preliminary ruling under article 267 TFEU. In reaching that view we also bear in mind that the EU Commission has expressed an adverse opinion on the minimum unit provisions and that of the eleven member states who have expressed a view to the Commission following notification in terms of the Technical Standards Directive 98/34/EC nine have expressed opposition to the proposals. The Court of Justice is of course a forum in which those parties may make submissions.

[6] We turn now to the mechanics of making the reference. Rule 65.3 of the Rules of the Court of Session provides for the task of drafting the request to the Court of Justice of the European Union to be performed by the parties in accordance with the directions given to them by the court. The final text of the request is subject to any adjustments which the court wishes to make. In the particular circumstances of the present case it appears to us that it would be necessary for us to give considerably detailed directions. With a view to finalising the terms of the request to the court in Luxembourg with as little delay as possible, we came to the view that rather than set forth the relatively detailed directions which we think would be necessary as to the terms of the questions and the other information to be included we should adopt the practical expedient of preparing a draft reference ourselves. This we have done. In finalising the draft we would naturally wish to take into account any factual inaccuracies or obvious infelicities which occur to parties. It will be no doubt appreciated that the need for succinctness -cf paragraphs 2 and 22 of the Recommendation published by the Court of Justice (OJ 2012 No. C338/1) - brings with it a need for distillation and selection in the materials and information available to this court. It will of course also be appreciated that parties will have the opportunity of advocating their respective standpoints by way of written observations and oral submission to the Court of Justice.

[7] We will therefore allow parties a period of three weeks from the issuing of this opinion to lodge in process, if so advised, written notes of any factual inaccuracies or infelicities in the draft reference which they have noticed. Thereafter the court will proceed to final adjustment and submission of its reference to the Court of Justice.

[8] We would add that - as will be apparent from the draft reference - we have decided not to include any question on that chapter of the petitioners' arguments which related to the contention that minimum unit pricing is contrary to the rules of the World Trade Organisation, formerly GATT. We reach that decision on the grounds that (a) the chapter is not of evident forensic utility to the petitioners, since, as Mr O'Neill recognised, if they do not succeed on the other branches of their argument or one of them they do not succeed under this branch; and (b) the Court of Justice has consistently taken the view that the WTO rules are not directly applicable in EU law - see Edward and Lane European Union Law, paragraph 14.102 and the authorities there cited.