Minimum Price per Unit U-turn will Cost Responsible Drinkers

There was no denial from David Cameron in the House of Commons today during Prime Minister’s Questions, when asked if the government was abandoning their Minimum Price per Unit of Alcohol Plan.

This article is not a political commentary, but frankly anyone watching the exchanges in the Commons will have been able to see that political points scoring was top of the agenda. Neither the people who need intervention because of alcohol addiction, nor the many tens of thousands of people working in the licensed hospitality sector, were considered during the exchanges.

Minimum Price per Units of Alcohol

I have made the point before in news articles on our website, that I think a minimum price per unit of alcohol would be a big help to both small off-licensed shops and the licensed hospitality sector, as it would go some way to levelling the playing field with the supermarket giants. I have also made the argument that supermarkets themselves would have benefitted, although not everyone agrees with me on that point.

I do fear that those who declared themselves against the idea on the grounds of unfairly burdening responsible drinkers will, in the not too distant future, find themselves wondering why alcohol is going up in price, despite no minimum price per unit?

Responsible Drinkers

Most responsible drinkers would, in my opinion, not have been affected by the introduction of a minimum price per unit, the type of alcohol they drink could largely have remained at the same price point. The same goes for almost every alcoholic drink in the on-trade; therefore the cost of a night out, would hardly have been affected.

At a minimum price per unit of 45p a bottle of wine would have cost in the region of £4.50, a pint of premium lager £1.20, a bottle of premium beer 75p and a bottle of whiskey £13. How many responsible drinkers pay much less than those prices currently?

Super-Strength Alcohol

It is the super-strength beers & ciders and cheap spirits, which would have been most affected. My argument would be that if you are drinking a beer / cider with an abv above 7%, you are probably drinking it more for the alcohol than the sociability of alcohol consumption. There is a reason that licensed pubs, bars and restaurants don’t generally sell super-strength beers…

It also comes back to the misconceptions I mentioned in my pervious news article (Is the Alcohol Units System Broken >>) and we have seen again in a BBC graphic, that the public perception of alcohol is often misrepresented.

The BBC article (David Cameron vows to end cheap alcohol sales >>) refers to strong beer as one with an 8% abv. The public’s perception of a ‘strong’ beer really refers to ‘premium’ beers in the rage of 5% abv, anything above 6% abv really should be in the bracket of the ‘super-strength’ beers & ciders.

‘Super-strength’ is a term clever marketing managers have slowly been allowing to disappear.

Minimum Price per Unit Replaced by Taxation?

If the minimum price per unit is being scrapped by the government, but yet David Cameron has promised to ‘clamp down on cheap alcohol’ in the weeks before a budget, then it doesn’t take a great leap of imagination to see that taxation will be the vehicle used.

Minimum price per unit would have put the additional income into the hands of alcohol retailers, allowing for greater investment and employment, possibly even slowing the decline in the pub trade. Taxation takes it away from retailers and into government coffers.

The net result from additional taxation is that the big retailers who are be able to continue to subsidise alcohol sales in order to keep prices low will fuel pre-loading and alcohol addiction, while the on-trade which generally doesn’t sell super-strength beers and ciders, will see taxation forcing up the prices in bars and restaurants.

Customers who argued against minimum unit pricing, saying it would be felt in the pockets of ordinary responsible drinkers should watch the budget closely. More taxation will mean higher prices for responsible drinkers and the same low prices for those who seek high % abv at a low price; unfortunately street drinkers, children and alcohol dependents, fit that demographic.

If my hunch about higher taxation is right, then only the taxman wins.


Author - Peter Mayhew is the Managing Director of Beyond the Blue Training & Consultancy. He delivers training courses and provides expert opinion on alcohol & entertainment licensing for individuals, organisations and public bodies. Peter is a frequent contributor to industry publications.

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