Minimum pricing

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Rob Allanson
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Joined: Thu Aug 24, 2006 2:30 pm

Minimum pricing

Postby Rob Allanson » Thu Sep 02, 2010 3:54 pm

The backlash has started to the Scottish National Party's proposal for a minimum price per unit of alcohol of 45p. Here are some of the view from the industry:

The Scottish Government's proposed minimum price of 45p a unit will do little to address alcohol harm in Scotland but will cause significant damage to Scotch Whisky at home and abroad, The Scotch Whisky Association (SWA) said today.

Scotch Whisky producers believe minimum pricing would breach EU and international trade rules. Copycat action in export markets - with trade barriers justified on spurious health grounds - would have a major negative impact on Scotch Whisky overseas, undermining the industry and its supply chain across Scotland at a time of economic uncertainty.

At 45p a unit, the cost of an averagely priced bottle of Scotch Whisky in Scotland will increase by 16% to £12.60, reducing the domestic market by nearly 13%. Value and own-label brands would be particularly impacted.

A Scottish Government commissioned model suggests the proposed price fails to meet the basic tests of EU law, with only a 4.3% fall in alcohol consumption predicted. A range of other measures could achieve a similar impact, without distorting competition or restricting trade.

The SWA again called for political parties to unite around long overdue excise duty reform and a ban on alcohol sales below tax. This would set a legal and transparent 'floor price', addressing issues around the pricing of certain alcoholic drinks.

Gavin Hewitt, SWA Chief Executive, said:

"The Scottish Government's scheme fails to meet the basic tests of EU law and will do little to address alcohol misuse. This policy would, however, significantly damage Scotch Whisky at home and abroad.

"We need consensus on a legal alternative. Excise duty reform so that all drinks are taxed on the same basis, according to alcohol content, and a ban on sales below tax, is a fair and socially responsible way forward. It would also raise over £1bn extra revenue for the public finances."

Diageo GB:

"Minimum pricing is wrong in principle. It is not the answer to tackling problems with alcohol misuse. By its very nature, it will impact all consumers, the majority of whom enjoy alcohol responsibly without harm to themselves or others.

The debate in Scotland has moved on. It is time for the Scottish Government to recognise that and engage in broader discussions. Our view remains that targeted interventions would be much more effective and appropriate."

Richard Taylor, Director of Corporate Affairs at Morrisons said:

"Following the Scottish Government's announcement today proposing 45p as the minimum price per unit of alcohol in Scotland, Morrisons does not support a minimum unit price which would only serve to punish our customers in Scotland - the vast majority of whom drink responsibly.

We would like to reiterate our view presented in a letter to the Home Secretary in June this year. As stated in our letter, instead of a minimum unit price we believe that the UK Government should legislate to stop the sale of alcohol below the rate of duty plus VAT. This mechanism, if enshrined in law, would provide an immediate and fair approach to stem the misuse of alcohol and provide a solution across the whole of the UK, including Scotland. If the Government thinks price is a way to affect demand it can do so by raising duty knowing that it will apply across the UK. As a demonstration of our commitment to this proposal, Morrisons does not sell alcohol below the cost of duty plus VAT."

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