Comments on Sections Section 1 – Minimum price of alcohol
4.Section 1(2) inserts new paragraph 6A into schedule 3 to the 2005 Act and introduces a further mandatory condition of premises licences granted under that Act. The condition is that alcohol must not be sold on the premises at a price below its minimum price.
5.Inserted paragraph 6A(2) concerns the application of the condition where alcohol is supplied along with other products or services, for example, where a bottle of beer is packaged with and sold with a branded glass or a bottle of wine is sold with food as part of a “meal deal.” In these circumstances the minimum price would be the minimum price that would apply to the alcohol if sold on its own. That is, the package must be sold at (or above) the minimum price and no account is taken of the elements of the package which are not alcohol.
6.Inserted paragraph 6A(3) sets out the formula by which the minimum price is to be calculated as minimum price per unit (MPU) x strength of the alcohol (S) x volume of the alcohol in litres (V) x 100.
7.By way of example, if the minimum price per unit was set at 50p per unit of alcohol:
8.Inserted paragraph 6A(4) means that the Scottish Ministers are to specify the minimum price per unit by order. Section 1(4) amends section 146 of the 2005 Act to provide that any such order is subject to the affirmative procedure(1).
9.Section 1(3) makes identical provision in respect of conditions in occasional licences granted under the 2005 Act.
10.Inserted paragraph 6A(5) and (6) sets out how the strength of alcohol is to be determined when calculating the minimum price of alcohol. “Strength” is defined in section 147(1) of the 2005 Act and is defined by reference to the Alcoholic Liquor Duties Act 1979 (c 4) which states that the alcoholic strength of any liquor is to be determined as a ratio of the volume of alcohol in the liquor to the volume of the liquor and expressed as a percentage. This is referred to as the ABV.
11.Pre-packaged drinks generally have to state on the label the drink’s alcoholic strength by volume. Various labelling regimes make this a requirement. For example, regulation 30 of the Food Labelling Regulations 1996 (SI 1996/1499) requires pre-packaged alcoholic drinks, other than EU controlled wine(2), that have a strength of more than 1.2% to be marked or labelled with an indication of the drink’s alcoholic strength by volume to no more than one decimal place and expressed as a percentage. This is referred to as the “declared ABV”. Certain positive and negative tolerances are permitted (for example, beers of not more than 5.5% ABV have a tolerance of plus or minus 0.5%) and these are set out in Schedule 5 to the Regulations. These tolerances mean that it is possible for the strength of alcohol to be different to the declared ABV of that product. Where pre-packaged alcohol is required by certain labelling provisions to indicate a declared ABV it is the declared ABV that should be used in calculating the minimum price of the product rather than the actual strength of the product. Inserted paragraph 6A(6) provides that the Scottish Ministers will specify in an order which labelling provisions can be used for this purpose. The order will be subject to negative procedure(3).
12.Where different alcohol drinks are mixed, for example in a cocktail, the declared ABV must be used for any alcohol to which relevant labelling provisions apply and the ABV for any other alcohol. The minimum price for each alcoholic component of the drink will need to be calculated and then added together to provide a minimum price for the whole drink. Any non-alcoholic drink added to the alcoholic products does not require to be included in the calculation as a minimum price does not apply to non-alcoholic drinks.
13.Where pre-mixed alcoholic drinks are sold, for example a gin and tonic, the relevant labelling provisions will apply to these and so they will be marked or labelled with the declared ABV and the declared ABV is to be used in order to determine the minimum price of the drink.