Terrible Tories?

The big news in the alcohol industry on Thursday was that David Cameron came out in support of a minimum price per unit on alcohol of between 40p and 50p per unit. This is something that has been discussed widely over the past couple of years, with the Scottish government and local councils in Manchester and Liverpool already looking at introducing such schemes. The major complication seems to be legality under European competition laws, and that the government may face opposition from Brussels and possibly being challenged from those businesses it will affect.

To quote the article in The Telegraph, we could expect the following price increases in supermarkets.

A bottle of own-brand gin with around 37.5 per cent alcohol content would go up from £6.95 to £11.85. A two-litre bottle of own-brand cider would more than triple in price from £1.20 to £3.75.

The cost of a £12 bottle of whisky would rise to £12.60, while a bottle of cheap wine would go up from around £3.75 to £4.20. A four-pack of beer with more than five per cent alcohol content would cost a minimum of about £3.95.

I am, and have been for a long time, massively in favour of this. Although it wont really effect the price of an average 4-pack of beer, and certainly wont effect the cost of bottled ales and imported premium products in supermarkets, it will limit the discounts they will be able to offer. A 20 pack of 4% beer would have a minimum retail of just over £15, so the 3 cases for £20 style offers which are commonplace at key trading periods such as christmas and the easter will no longer exist. Although your average beer will still be around a third of the price in the supermarket than your average pub, my hope is that without these offers  more people will be encouraged back to the pub. Hopefully, without the option of such cheap alcohol, consumers will decide that it is worth that bit more for the more social experience.

The other group of retailers this will affect are the small market of pubs who run heavily discounted drinks promotions, such as £1 a pint nights. It is my belief that establishments with promotions such as these are what gives the pub industry a bad name. It encourages consumers to take advantage of the offer by drinking more, and anything that can be done to stop such irresponsible behaviour is a positive step in my opinion.

But the most telling quotes for me are the following, again from the Telegraph;

The most radical scheme would involve a sharp rise in alcohol taxation. However, this is likely to prove politically unpalatable and would penalise responsible drinkers who are already struggling with high taxes elsewhere.

A more sophisticated scheme would target cheap drink sold in supermarkets and shops, while not hitting those sold in pubs or more expensive alcoholic drinks. A well-placed source said: “The minimum price is really designed to push up the cheapest alcohol prices, which cause the most damage, rather than an across-the-board rise. The Prime Minister is very concerned about protecting traditional pubs.

A couple of days ago I discussed whether a change of attitude in the way we discuss these issues was needed. Perhaps not. If the government have finally realised that increasing taxes is detrimental to responsable drinkers and retailers, not to mention the growing microbrewing industry, then hopefully they have begun to listen about where the problems truly lie in Britain’s ‘binge drinking’ culture.

I only hope that the government can find a way around any issues with European law, and that they dismiss any lobbying from supermarket pressure groups. Oh, and that it doesn’t come with the rumoured increase in HSBD.

Posted on 31/12/2011, in Uncategorized and tagged , , , . Bookmark the permalink. Leave a comment.

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