Floor prices for alcohol applied across the globe

Published on Thursday 2 September 2010 15:24

MINIMUM pricing policies already in place in other parts of the world include those in Ontario in Canada and Russia.

The Liquor Control Board of Ontario (LCBO) uses a system of floor pricing, or minimum selling prices.

Board members say that they use price control as part of a social responsibility mandate to discourage excessive alcohol consumption.

The approach has been criticised as being a legally sanctioned price fixing mechanism to guarantee profits and discourage price competition, thus protecting established major producers.

Weaker strength beverages such as light wines and beer are in effect sold by the LCBO at reduced prices, again with the stated object of influencing consumption as part of the board's social responsibility work.

The board's regulations say that a standard-sized drink may not be sold or supplied for less than $2 (1.20).

Standard-sized servings are defined as follows: 341ml (12oz) of beer, cider or cooler.

Russia has also brought in price restrictions aimed at reducing the availability of cheap vodka.

The minimum price for all vodka sold in the country is part of Russian president Dmitry Medvedev's plan to tackle alcoholism.

The cheapest bottle of vodka on sale will now be 89 roubles (1.80) for half a litre.

An average Russian earns just under 18,000 roubles (367) per month and illegal vodka can be found for as little as 40 roubles. Experts estimate that sales of bootleg vodka in Russia make up almost 50 per cent of all vodka drunk by Russians.

As an average Russian drinks 34 bottles a year, that adds up to a huge vodka consumption.

A range of alternatives to minimum pricing aimed at tackling alcohol abuse have been put forward, including a UK-wide "floor price".

A British ban on drink sales below the total cost of production, duty and VAT, as part of a raft of measures to deal with alcohol abuse has been suggested by Scottish Labour. The Tories and Lib Dems north of the Border have also backed UK-wide solutions to the problem.

The British Beer & Pub Association said alcohol should be taxed according to its strength, a move it claimed would create thousands of jobs and bring in about 250 million in extra revenues from employment taxes and corporation tax.