Ministers in the Scottish parliament voted in February 2018 for minimum unit pricing (MUP) to be 50p when it is introduced later this year.
Scotland first proposed MUP back in 2011 but the move was challenged by the Scotch Whisky Association, which argued it breached European competition laws.
The MUP has been the subject of a lengthy legal battle, first in the EU and subsequently in the UK where the Supreme Court finally ruled last year that it could go ahead.
The MUP will be the subject of much scrutiny as there have already been calls for it to be raised to 70p with the price being reviewed every 2 years.As of today this will raise the cheapest price for a four-pack of beer from £1 to £1.78, a three litre bottle of cider from £3.59 to £11.22, a 70cl bottle of vodka from £9.97 to £13.11, Scotch from £11 to £14 and a bottle of wine from £3.09 to £4.98.
The biggest single rise will be for high proof cider where the price increase will be just over 212%.
For those companies that are trading in or to and from Scotland, part of your due diligence must consider the cost of the alcohol and the market price.
The implementation of a minimum unit price can provide a significant incentive to trade alcohol illicitly. Minimum unit pricing will create a price differential between the production cost of a product and its retail price well in excess of the retailer margin. The security of the supply chain should be considered in light of these announcements.
The Wine and Spirit Trade Association warn “This therefore creates an incentive to sell products that will be available at wholesale in Scotland, or from other parts of the UK where the regulations do not apply, outside of legitimate retailing channels to profit while still undercutting legitimate retailers.”
Altion Law specialise in HMRC disputes and can assist if your company is being investigated by HMRC in relation to Duty or VAT assessments.