The European Court of Justice said the measure violated the bloc's single market rules while its objective of reducing alcohol intake would be better achieved by tax measures.
The Scottish government introduced the system in 2012 to tackle what it said was "Scotland's unhealthy relationship with alcohol" and the toll it was taking, especially among the young.
The ECJ ruling, made in response to a request by a Scottish court, was closely focused on the impact the system has on single market rules.
Cheaper drinks imported from other member states lose their competitive edge in the Scottish market as a result, it said.
"That is sufficient reason to conclude that the measure constitutes an obstacle to the free movement of goods."
In contrast, increasing taxes "is liable to be less restrictive... Since unlike where there is a minimum price, traders retain the freedom to determine their selling prices."
On that basis, taxation rather than a minimum price system would better serve the government's efforts to cut alcohol consumption.
"This ruling opens the way to moving the debate on and allowing us to address alcohol misuse with practical measures that actually work," SWA head David Frost said.
SpiritsEUROPE, which was one of the parties to the case in Scotland, said it was "an early Christmas present for moderate drinkers".
Scottish Health Secretary Shona Robison was adamant that minimum pricing was the most effective way to reduce alcohol consumption.
"We believe it is the most effective mechanism for tackling alcohol misuse and reducing the harm that cheap, high-strength alcohol causes our communities," Robison said.
You’ve reached your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Smart Quarterly
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
