Prime Minister David Cameron is pushing ahead with plans to implement a minimum price on alcohol of between 40p to 50p a unit, with news expected in the Budget on 21 March and the impending Alcohol Strategy. However, it is feared that to avoid possible collision with the European Union over competition laws the Government could be attempting to push the pricing through a loophole via duty or another separate tax mechanism.
A prospective “minimum-pricing escalator” could see prices hiked in a very similar way to duty.
Analysts predict that a 40p minimum price en-forced through tax increases could see on-trade sales drop by as much as 29%, while the total number of sector jobs could plunge by 85,000.
The British Beer & Pub Association (BBPA) said it believes minimum pricing is a “blunt tool” and the industry could be facing some “serious problems” if the Government takes this route.
A spokesman said: “While there are differing views of the role that minimum pricing could play, it is a blunt tool to tackle misuse that would also penalise the vast majority who enjoy alcohol responsibly, and hit those who can least afford it at a particularly difficult time.
“There’s also a concern that a minimum price would ultimately be achieved through, or result in, higher taxation, which would be hugely damaging to community pubs and Britain’s brewers, costing thousands of jobs.”
Kate Nicholls, strategic affairs director at the Association of Licensed Multiple Retailers (ALMR), raised concern about the industry already being overtaxed and said any new tax on the industry would be “crippling” on pubs. She highlighted the impact of the minimum wage, which started at a reasonable level, but has since crept up to higher levels.