The Scottish government's plans for a minimum alcohol price would breach EU law if less restrictive tax measures could be introduced, the European Court of Justice has ruled.
Judges in Luxembourg decided that the policy would restrict the market, but this could be avoided by the introduction of an alternative tax measure designed to increase the price of alcohol.
ITV News' Scotland Correspondent Debi Edward has the latest:
The ECJ said it was ultimately for the national court of an EU state to determine whether other measures would be as effective in achieving the desired public health benefit.
Judges concluded that a minimum price would constitute an obstacle to the free movement of goods, but that such a measure may be justified on health protection grounds "only if it is proportionate to the objective pursued".
But Holyrood does not have the power to raise taxes on alcohol, an ability reserved for Westminster alone.
Officials from the Scotch Whisky Association mounted a legal challenge alongside other European wine and spirits producers after legislation to introduce minimum pricing was passed by the Scottish Parliament in 2012.
Welcoming the ruling, SWA chief executive David Frost said: "The court has confirmed that minimum unit pricing (MUP) is a restriction on trade, and that it is illegal to choose MUP where there are less restrictive ways of achieving the same end.
"The Scottish courts will now reflect on the implications of the ruling and all the evidence, before issuing a final judgment.
First Minister of Scotland, Nicola Sturgeon, said the government the ECJ's "opinion" was welcome, and that minimum alcohol pricing was still the best way to tackle alcohol misuse.
The case will now be referred back to the Court of Session in Edinburgh for a final decision.