Minimum Pricing – drawing the battle lines…

Posted by on Nov 9, 2011 in Editorial | 2 Comments

After October’s self-imposed month of strong beer – in protest at the UK Government’s raising of High Strength Beer Duty (HSBD) – I’ve been looking forward to a few legislation-free weeks here on the BeerCast. However, last week the incumbent SNP administration re-introduced a bill to the Scottish Parliament involving minimum pricing of alcohol – so once again I find myself wading through various reports on the dangers of drink.

The SNP attempted to get this bill written into law during the last parliament. Had it been passed, it would have become illegal to sell alcohol in Scotland at under 45p per unit. As the SNP were running a minority Government, they were defeated when all the other sides of Holyrood joined forces to oppose the idea. However, since the May elections, the SNP have a comfortable majority – and minimum pricing looks set to become law.

Except…it’s not all that clear cut. Firstly, the key number in all of this (and I’ve seen many, many numbers) doesn’t actually yet exist. The 45p figure is being re-assessed by experts at the University of Sheffield, and it will probably be higher. A ‘drinks industry insider’ quoted the other day in the Daily Record stated “Most people in the industry are preparing themselves for 50p.”

There’s so much conjecture at the moment about minimum pricing – claim and counter-claim being fired off by interested groups (of which there are plenty). I’ve tried to write this post several times, so am going to let it run off by itself, featuring the main protagonists, and how they differ. The one thing I’ve learned is that it’s pretty obvious minimum pricing completely divides opinion…



1. Scottish National Party v Opposition Parties

The SNP – for so long the outside party – have finally got their hands fully enclosed around the globe of power* – and they want to create a legacy. As such, they really want their own ‘smoking ban’ moment. Keen to push ahead with a public health totem of their own, minimum pricing could be it. The opposition are united in their condemnation – Labour even mooting that the policy could be illegal under EU trade law (the SNP cautiously state that it is ‘capable’ of complying with European law). With their majority, the other parties aren’t a worry for the Government. The lawyers, however, might be.

2. The Government v Trade Organisations

The entire remit of trade associations is to get the heckles up when their members feel threatened. Moving away from beer for a moment, spirits are one of the keys for this issue – Scots drink more of the hard stuff than the rest of the UK (29% of sales here; >20% in England/Wales). The Wine and Spirit Trade Organisation have estimated – I’m not sure how – that a 50p minimum price would affect 73% of Scottish alcohol sales. Alcohol Concern support the measure – and have even called for a blanket ban of alcohol off-sales after 8pm.

3. Scottish Government v UK Government

Scotland’s devolved parliament is able to set some rates of tax, but not all. Freezing Council Tax rates recently, for example – but unable to set levels of duty (which are controlled by the Westminster Treasury). So John Swinney won’t be overturning the HSBD up here any time soon. The London-based Tory/Lib Dem coalition is watching carefully how Scotland fares with the minimum pricing – not for the first time, playing a watching brief (other than questioning the legality of the bill). Just today the UK Government announced their own level – the lower tarriff of Duty plus VAT.

4. The Supermarkets v The Government

I’ve yet to find a comment on the minimum pricing issue from one of the major supermarkets. On face value, this will hurt them – under a 50p ceiling, a bottle of vodka could not be sold for less than £13.13, and a bottle of wine for £4.69. When installed alongside the October 1st ban on cut-price booze, two-for-one deals and general loss-leading – things looks bleak for Supermarkets. But – they sell the majority of alcohol in the UK. People will still buy their booze on a weekly shop. Minimum pricing is not a tax – the extra money ‘raised’ will go somewhere. Labour have warned of a ‘£140million annual windfall for big supermarkets without providing a single extra penny for the NHS.’

5. Scottish Government v Statistics

We all know the maxim about statistics – but the Scottish Government have been firing out the numbers in support of their bill. Excessive alcohol consumption – which everyone agrees is a problem in Scotland – accounts for £3.6bn annually according to the SNP, or £900 for every person in the country (I probably spend more than that on beer, but that’s another matter). Alcohol death rates in Scotland have doubled since the early 1990’s. But alcohol discharges in Scotland are falling, and have done for the last two years. Have things peaked?

6. SABMiller v MolsonCoors

Here’s a lovely nutshell point illustrating the differences of opinion over minimum pricing. In one corner – MolsonCoors. “As a global family brewer…[we]…remain confident that minimum price under the right circumstances can be a part of the solution to address the problems caused by exceptionally low prices which do not build our brands or respect for alcohol.” In the other – SABMiller. “The evidence shows that minimum pricing will hardly affect the consumption of hazardous and harmful drinkers but will hit the vast majority who drink responsibly and in moderation.”



To be honest, I’m not really sure where to stand on the issue at the moment. I totally disagree with HSBD – as a method to tackle ‘problem drinkers’ it totally missed the point. Minimum Pricing will price people out of cheap, strong booze. The fact that it’ll (again) be to the Supermarket’s benefit really sticks out. In terms of beer – the majority of pub and bottle-shop bought products are already sold above 50p a unit, so will hopefully be unaffected.

But something else that will be unaffected seems to be the most infamous Scottish problem drink of all – Buckfast. The ‘tonic wine’ rocks up at 15%, so a 75cl bottle gives you just over 11 units. At 50p minumum price, it will become illegal to sell Buckfast for less than £5.50. A quick online check, the cheapest I can find is £6.90 (clearly, most Buckie drinkers don’t use price comparison sites to shop). Minimum Pricing needs a notable scalp – it looks like Buckie won’t be it.

We’ll be keeping our eye on minimum pricing, and will be blogging more on the issue when the Sheffield dons have decided the final figure. Let us know your thoughts – will minimum pricing affect you?



**note to readers outside the UK – there’s no actual globe of power…

2 Comments

  1. Steve
    November 9, 2011

    I think it’ll be a good thing…it could potentially mean supermarkets stop inflating the price on other goods to cover the costs for loss-leader alcohol, or at the very least mean they need to try to find something else to drive footfall. I want the days of 3p baked beans again!

    In most cases it won’t affect cornershops, specialist retailers or on-trade…it will only effect the supermarkets as long as they dont plan to keep raising it in the future…that’s where the issue comes in.

  2. BeerCastPaul
    November 9, 2011

    I’m leaning towards it being a good thing too – if the research is correct – interesting report from the Chief Medical Officer in 2009 http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/documents/digitalasset/dh_096231.pdf

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