The Scottish Government did not take EU law into account in its plans for a minimum price for alcohol, a court has been told.
A legal challenge against the legislation, which would see a minimum unit price of 50p brought in north of the border, returned to court today.
Loading article content
The Scotch Whisky Association (SWA) took action against the policy, which it argues would breach European Union (EU) trading rules, after it was passed by MSPs in 2012.
Judge Lord Doherty rejected the challenge in May last year, ruling that the legislation was compatible with UK and EU law.
An appeal got under way at the Court of Session - Scotland's highest civil court - in Edinburgh today.
The association is joined in the action by Spirits Europe and the CEEV, the federation of European wine producers.
Setting out the case, Aidan O'Neill QC said a "fundamental failure" of the Scottish Government's case was its focus on health evidence, as opposed to the effect on imports from other member states.
The policy had been "dreamed up" by health advisers with no consideration given to its lawfulness, he said.
Mr O'Neill said: "It is accepted that justification has to be made out in this case and that is because the Scottish ministers accept that on the face of it, this measure contravenes EU law.
"They accept that this is a measure which does have the effect of restricting imports from other member states.
"There is no evidence about the degree to which there's a quantitative restriction on imports from member states.
"Because they have not addressed themselves to that and produced evidence to the court on that point, it is impossible for them to say that the measure is justified as a matter of EU law."
Mr O'Neill told Lord Eassie, sitting with Lord Menzies and Lord Brodie, that minimum pricing would have a negative impact on the open market and free competition in the EU.
He said the effect on producers in other member states which would be forced to raise their prices had not been considered.
He said: "One might have expected that the effect that this will have in terms of the internal market and for competition within the market would have been at the forefront of the Scottish Government's mind when preparing and presenting this policy.
"It clearly doesn't simply affect the consumer in Scotland. It affects producers in other member states.
"But there is nothing, nothing in these documents that we have been able to identify in which the Scottish Government actually addresses the issue of the compatibility of this policy with EU law, given its impact on imports from other member states.
"It doesn't even consider it. It seems not even to be aware of it.
"They haven't taken it into account."
The Scottish Government has said it is committed to introducing the policy to address Scotland's unhealthy relationship with drink, and save lives.
It will make its case later in the hearing, which is expected to last six days.
Mr O'Neill told the court that a minimum unit price for wine, an agricultural product, would be "wholly incompatible" with the principles of the EU's Common Agricultural Policy (CAP).
"If implemented, it would throw a spanner into the delicate, interlocking works which is now the CAP, and its differing measures of national support," he said.
The Scottish Government had made no prior reference to the impact of the policy on CAP, he said, adding: "I don't think they have thought about it."
Minimum pricing would unfairly impact on "sensible and moderate" drinkers and is unnecessary because evidence shows alcohol consumption is falling anyway, the court was told.
"If the court is persuaded that we do need pricing measures, the only licit policy apparent would be one that involves taxation," Mr O'Neill said.
He is expected to conclude his opening speech tomorrow before lawyers for the Scottish Government make their case.