Minimum pricing: will damage limitation work?

19-Dec-2012 - Last updated on 19-Dec-2012 at 10:50 GMT

Pre-loading: many young people are approaching a night out differently by drinking more before leaving home

There has been much recent publicity concerning difficulties the UK on-trade is experiencing in competing in a marketplace where most alcohol sold is now consumed at home.

It is very difficult to tempt customers into premises when prices are generally significantly higher than those offered by supermarkets, which have been criticised in the past for below-cost selling. Younger customers in particular are approaching a night out in a significantly different way.

With premises able to trade further into the early hours, customers are coming out later and consuming significant quantities of alcohol at home prior to doing so. Having pre-loaded to a significant extent they then spend less in on-licensed premises as a result.

The Government’s latest proposal comes in the form of the launch – on 28 November 2012 — of the consultation on its alcohol strategy, which aims to crack down on binge drinking. The proposal is that a single unit of alcohol may not be sold for less than 45p per unit in England and Wales. A minimum price of 50p per unit has already been passed by the Scottish Parliament in the form of the Alcohol (Minimum Pricing) (Scotland) Act 2012.
The consultation is set to run for 10 weeks until 6 February 2013 and is scheduled to involve a number of meetings and events with industry representatives to focus on the policy development process.

The consultation deals with other issues as well, with views being sought on five key areas:

A ban on multi-buy promotions in shops and off-licences to reduce excessive alcohol consumption.
A review of the mandatory licensing conditions to ensure that they are sufficiently targeting problems such as irresponsible promotions in pubs and clubs.
Health as a new licensing objective for cumulative impacts so that licensing authorities can consider alcohol- related health harms when managing the problems relating to the number of premises in their area.
Cutting red tape for responsible businesses to reduce the burden of regulation while maintaining the integrity of the licensing system.
Minimum unit pricing ensuring for the first time that alcohol can only be sold at a sensible and appropriate price.

It is claimed that this process is not about stopping sensible, responsible drinking but rather is about explicitly targeting the reduction of harmful drinking.
Many differing views have been expressed about the likely success or otherwise of these proposals in effectively reducing the harm done by alcohol. It seems plain that the vast majority of us who drink responsibly and benefit from the low prices which supermarkets offer will be penalised, becoming collateral damage to the stated aim of the policy. Questions have also been raised as to whether “problem drinkers” will reduce their alcohol consumption as a result of the proposed changes.

The Government has relied heavily on research conducted by the University of Sheffield regarding the effects of adopting a minimum pricing policy. This is disputed by other academics who claim that there are a variety of factors which have been overlooked in that research, including such issues as whether a black market would be created in respect of alcohol. They also state that the consumption of alcohol has declined over the past few years with no corresponding reduction in harm – which is of course what the policy is setting out to achieve.

There are also potential legal difficulties surrounding the imposition of a minimum price. In respect of the Scottish proposal, the European Commission has already issued a legal directive following a legal challenge by the Scotch Whisky Association and wine-producing European Union nations such as France, Italy and Spain. They believe that such a proposal breaches EU laws on free trade.

While the European Commission considered that Scotland did have one of the fastest-growing rates of chronic liver disease and cirrhosis in the world, it felt that the proposed minimum pricing was a “disproportionate” response. The organisation would prefer to see the issue dealt with by raising taxes or indeed by the use of unspecified targeted measures in the particular areas of Scotland where alcohol abuse is most problematic.
It will be interesting to see how the consultation is received and indeed responded to over the coming weeks, while keeping an eye on the legal challenge to the Scottish plan.

Should the proposal in England and Wales go through, then a can of strong lager could not be priced at less than £1.56, or a bottle of wine for less than £4.22.

Is this really likely to change the drinking habits of a nation?