Consumer watch: Minimum drink price plans met by storm of protest

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Doubts on legality of legislature’s attempt to introduce minimum price on alcohol as a condition of licensing, reports Claire Smith

THIS week the Scottish Government announced ground-breaking plans to introduce a minimum price of 50p per unit on alcohol – saying the move would potentially save hundreds of lives a year.

The measures were introduced by health minister Nicola Sturgeon, who said starkly: “Too many Scots are drinking themselves to death.”

But the proposed bill, which could be in force as soon as 2013, has come under fire from critics who say it will not help those who need it most, could damage exports and may even be illegal.

One of the key issues is that this is not a tax but a levy, introduced on health grounds – because the Scottish Government does not currently have any tax-making powers. The legislature is trying to introduce a minimum price as a condition of licensing.

Caroline Loudon, the head of licensing and gambling for Lindsays, said she believed the new system was “unworkable”.

“I think we need to do something about the alcohol problem in Scotland, but this isn’t the right way to go about it. You see what they are trying to do, but it is not very well worked out.

“It sounds unworkable. It is supposed to be a social responsibility levy – but how is that going to be put into practice?

“Also, England are proposing a 40p minimum price per unit – which means we are going to have a dual market in the UK.

“I think this is a restriction of trade under EU law and that it is illegal and I think this is likely to be challenged in the European courts.”

The bill will affect a wide range of alcohol – increasing the price of the cheapest 70cl bottle of vodka or gin to £13.13, a bottle of wine to £4.50 and a bottle of whisky to £14.

Among those who have discussed mounting a legal challenge to the bill have been the Scotch Whisky Association – who say it will damage trade.

Chief executive Gavin Hewitt said: “The minimum unit price of 50p will increase the price of a one-litre bottle of blended Scotch whisky by 22 per cent from an average of £16.40 to a minimum of £20.

“All alcoholic drinks, not just supermarket ‘own label’ products (which will be sold at or just above the minimum price), are likely to see price rises to maintain the differentiation between ‘brands and ‘own label’.

“All consumers will lose out by being forced to pay more – including those on low incomes who drink responsibly. The Scotch whisky industry remains opposed to the principle of minimum unit pricing. It will be ineffective in tackling alcohol misuse.”

Indeed, Buckfast – the caffeine-loaded tonic wine which has been linked to violent crimes in the west of Scotland – will be unaffected. Last year Strathclyde Police said that Buckfast was mentioned in 5,638 crime reports over the previous three years and that on 114 occasions the bottle had been used as a weapon.

Critics also believe the pricing system could actually encourage drinkers to turn to stronger drinks. By making it illegal for supermarkets to sell super cheap 2 per cent “cooking lager” it may encourage consumers to choose stronger brands like Stella.

Furthermore, because the minimum price is a levy and not a tax, the extra money paid out by consumers will not go into the public purse but will increase profits for retailers.

The big supermarkets – which have been blamed for encouraging binge drinking by promoting super cheap multi-pack offers on barbecue boxes of lager, will be the ones to benefit most.

According to the research carried out by Sheffield University on behalf of the Scottish Government, retailers would benefit by £125 million a year because of the increase in cost. The CBI puts the figure at £150m.

Shadow public health minister Dr Richard Simpson said the fact that the money raised would go to big business was the reason the Labour party oppose it: “At 50p, this SNP policy already boosts supermarket profits by a whopping £125m.

“The higher the minimum price, the higher the windfall for big supermarkets, and the more important it is we claw back the cash and put it to good use.

“The SNP needs to explain why they are so desperate to hand multi-million bonuses to supermarket bosses instead of ploughing that money back into our police and NHS that are left to mop up the effects of alcohol misuse.”

While opinion among the licensed trade is divided, some licensees hope that the end of super-cheap alcoholic loss leaders in supermarkets will help bring people back into pubs.

Nick Bish, chief executive of the Association of Licensed Multiple Retailers, which represents major pub chains said: “We are pleased that governments both sides of the Border have now finally woken up to the fact that it is the plethora of pocket money- priced alcohol promotions, which are the real problem.”

However, Sturgeon said she thought the new bill would prove its critics wrong.

She said: “The health benefits of minimum pricing are very clear. In the first year, it is estimated that there would be 60 fewer deaths and 1,600 fewer hospital admissions.

“For too long too many Scots have had an unhealthy relationship with alcohol and this policy will help us change this.

“We consider that minimum pricing of alcohol does comply with European law, provided it is justified on the basis of public health and social grounds. We are confident that it is justified in Scotland.

“We know that we need to be able to balance the scale of market intervention with the health benefits which will flow, but we have always known we needed to be able to demonstrate this kind of proportionality, and are confident we will be able to do so

“A minimum price would only apply at the point of sale and would have no direct bearing on exported Scotch whisky.”