The Scottish Government plans to bring in a minimum price per unit for alcohol as part of its plans to tackle the country’s drinking culture.

Gavin Hewitt, chief executive of the Scotch Whisky Association, has warned minimum pricing could be used as an excuse in overseas markets employing health arguments to impose tariffs that give domestic brands a competitive edge.

However, this is the first time Hewitt has spelled out the potentially punitive toll on the industry.

“Minimum pricing is effectively a trade barrier, and such measures will be costly to our industry,” he said.

“Scotch whisky is exported to 200 markets around the world, and 143 of them already impose various levels of trade barriers on Scotch whisky imports to the benefit of their own domestic brands.

“If we impose a tariff ourselves on health grounds, then Scotland sets the precedent, and the EU will not be able to argue our case in overseas markets that attempt to do the same thing. Scotch whisky exports in 2008 amounted to £3.1bn. I’d say 20% of that would be lost if the Scottish Government goes ahead with its minimum pricing plans, which basically gives the green light to countries to introduce health-based restrictions against Scotch whisky.”

A 20% reduction in export value - based on 2008 figures - amounts to £620m.

“The domestic market would also be hit”, Hewitt added. “Higher prices will encourage counterfeit, fraud, smuggling, organised crime and job losses.”

Under the government’s proposal, at 40p a unit, the minimum bottle price would rise to £11.20, compared with the £10.55 average bottle price in Scotland. At 50p per unit, the average rises to £14. Hewitt also contends that minimum pricing would constitute a violation of European Union competition rules and the WTO’s GATT (general agreement on tariffs and trade) guidelines by acting as a barrier to trade.

Without naming names, Hewitt said that it was his understanding that a number of large overseas spirits firms were already preparing for legal action against the Scottish Government if its plans were legitimised.

Meanwhile, the Irish Spirits Association, which represents 11 of the largest Irish whiskey and other spirit makers, has already waded into the debate, and says that the minimum pricing plan constitutes a barrier to trade and sets undesirable precedents for other countries to follow.

At the same time, the Washington-based US Distilled Spirits Council, representing the American spirits sector, has urged the Scottish Government to abandon its push to bring in minimum pricing.

Peter Cressy, the US group’s president, said: “The Scottish Government’s proposal to introduce minimum prices for beverage alcohol products at the very least will adversely affect the conditions of competition in the Scottish market and also may run afoul of international trade rules.

“We would urge the Scottish Government to re-consider its approach and to focus on measures to tackle alcohol misuse that do not disrupt trade.”

Nonetheless, the EC, in a statement answering a Parliamentary Question from a Labour MEP, said that the proposed minimum pricing fits within European rules on competition - a move that apparently rebuffs the drinks industry’s claims about the legality of the proposal.

Justice secretary Kenny MacAskill has also dismissed the SWA’s claims as flawed, insisting that the minimum pricing was being pursued as a public health policy and not market protection.

He added: “The SWA should not underestimate their ability to successfully challenge any unfair practices in any country. They’ve been doing that for years.”

The minimum pricing plan was announced by First Minister Alex Salmond in his legislative programme on September 3 as part of a wider Alcohol and Health Bill.

The proposals are expected to start making their way through the legislative process by the end of the year, a Scottish Government spokeswoman said.

Minimum alcohol pricing may have a punitive toll on the industry