The EU's top court ruled Wednesday that Scotland's minimum price system for alcohol, designed to stop people "drinking themselves to death," was contrary to EU law.
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.
"The court... considers that the effect of the Scottish legislation is significantly to restrict the market," the Luxembourg-based court said in a statement.
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."
The Scottish Whisky Association and other producers had challenged the law in Scotland and welcomed the ECJ ruling.
"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.
© 2015 AFP