Catering Scotland

Will It One Day Be Last Orders For Cheap Alcohol?

 Breaking News
  • Graham and Sibbald Announce Directorship Roles OIOpublisher Chartered surveyors and business valuation experts, Graham and Sibbald have announced the promotion of Kevin Hunter and Scott Graham to director. With more than 12 years’ experience, Kevin (pictured...

Will It One Day Be Last Orders For Cheap Alcohol?

October 21
20:07 2013
Alcohol landscape.jpg

As the Scottish Government continues to fight the case for the Alcohol (Minimum Pricing) (Scotland) Bill, we asked licensing experts Tods Murray to demystify the complex legislation, and to explain in simple terms the anticipated benefits the Government hopes the Bill will bring to the health of Scots and society as a whole.

What exactly is Minimum Pricing? It is a legally imposed price floor for a unit of alcohol, below which the normal market price cannot fall. The Scottish Government has set the price of alcohol at 50p per unit, to help tackle Scotland’s historic alcohol abuse problems.

Why has it been proposed? Holyrood believes that it requires a ‘ground-breaking measure’ in order to tackle the blight on society caused by alcohol abuse. Citing evidence that affordability is a key driver in increased consumption, the SNP-led administration believes that a minimum price per unit of alcohol remains the most effective and efficient way of tackling alcohol misuse in Scotland.

What practical difference will a minimum price make to the cost of alcohol? At present, it is in theory possible to buy a four-pack of supermarket own-brand lager for less than £1.00. Under the new plans, this would cost at least £3.52, while cheapest bottle of wine would be £4.69.

So, the new legislation is aimed at tackling a specific section of alcohol abuse within society? Yes. According to the Scottish Government, those who drink within sensible guidelines will only be ‘marginally affected’. This is because they generally consume a lower amount of alcohol compared to ‘harmful drinkers’, and the alcohol they tend to drink is less likely to be the cheaper type most affected by Minimum Pricing. Indeed, a study by the University of Sheffield claimed the policy would see a cut in drinking of 5.5%, while harmful drinkers’ consumption would fall by more than 10%, compared with a 2.5% fall for moderate drinkers. In monetary terms, excessive drinkers would have to spend more than £120 extra a year to keep up their habit, and moderate drinkers would witness a mere £8 increase.

Is imposing a minimum price legal? The SNP Government has stated that the introduction of a minimum price for alcohol, based on a minimum price per unit, ‘is capable of complying with European law’. However, there are some who think otherwise.

And who are they? The Scotch Whisky Association (SWA), for one. It has challenged the move, claiming it breaches European and global rules on free trade and competition: ‘Ministers will have to prove that the move [toward Minimum Pricing] was a proportional response to the problem they were attempting to tackle, and that they could not achieve the same effect by increasing taxes,’ the SWA has said.

How would making alcohol more expensive help save lives? The Chief Medical Officer believes that a minimum price will reduce consumption of cheaper forms of alcohol, which will in turn have a positive effect on saving lives that would have otherwise been lost as a result of alcohol abuse. Will the legislation produce any economic benefits? It is estimated that the overall impact of our excessive consumption costs Scotland up to £3.6bn each year. The Scottish Government has released figures stating that, at 50p per unit, the total value of harm-reduction for health, crime and employment in year one is more than £64m. Over 10 years it is estimated at £942m.

But where would the additional revenue raised from Minimum Pricing actually go? Will it not just end up bolstering supermarket coffers? The Scottish Labour Party believes that minimum pricing could generate profits of more than £125m for alcohol retailers. They claim they would support Minimum Pricing if the legislation was changed to allow the government to claw back the supermarkets’ windfall. Labour’s public health spokesman, Dr Richard Simpson, has said: ‘Not a single extra penny will go towards our police or health services.’ However, the Scottish Government responded by saying that it will be up to producers and retailers to negotiate on the price of contracts between them. It feels the only direct effect of the legislation will be on the price charged to the consumer.

So, why wasn’t Minimum Pricing introduced as a tax? The Scottish Parliament does not have the power to implement such a measure, as taxation is a reserved matter that can only be dealt with by Westminster. The Scottish Government has been eager to point out that Minimum Pricing is not a tax; instead, it is a targeted way of ensuring high-strength drink is sold at a sensible price. Westminster would have to introduce a separate tax if they saw fit.

When is Minimum Pricing set to become law in Scotland? The Bill received Royal Assent in June 2012 and was originally expected to come in to force in April 2013. However, a last-minute legal challenge ensured the Bill’s detractors managed to halt its progress, and it is now being bounced around the courts as both sides try to ensure they secure victory.

How will a minimum price impact on smaller retailers? It is widely believed that smaller retailers cannot currently compete with the low prices offered by some of the larger supermarkets. Hence, it has been suggested that the introduction of a minimum price will put these independent players on more of a level playing field with the big supermarkets.

What do people working in the drinks industry think of the new legislation? In theory, Minimum Pricing means that people will consume less alcohol but will pay more, in monetary terms, for the alcohol they do consume. As a result, the Scottish Government has said that both off-trade and on-trade retail sectors will see increased revenues. It has been suggested that the on-trade sector may even benefit from Minimum Pricing, as if there is little difference in the price of a bottle of wine at home, or a bottle of wine in the pub, people could opt for the latter. Others in the supply chain, including producers, may also see increased revenues. The off-sales trade has kept pretty quiet about it all, and some observers believe this could be because they know they will benefit financially. However, many industry experts, included the Scottish Licensed Trade Association, have welcome the Scottish Government’s announcement.

So, if eventually introduced, would Minimum Pricing transform the way we view and consume alcohol in Scotland? It is too early to tell whether or not the new measure would have the kind of positive effect expected by the politicians and health authorities who supported the Bill through the Scottish Parliament.


Alcohol square.jpg

July13.Naomi Pryde.jpg
Naomi Pryde outlines the main aspects and objectives of the controversial Alcohol (Minimum Pricing) (Scotland) Bill, the legality of which is still being fiercely debated in the Scottish Parliament…

About Author

Catering Scotland

Catering Scotland

Related Articles