David Frost: Law on alcohol pricing not necessary

There are other ways to reduce problem drinking without penalising everyone else with unit price fixing, writes David Frost

Whisky events will be held up and down the country. Picture: Colin Hattersley

I ADMIT I enjoyed reading Hugh Reilly’s article on minimum pricing of alcohol (“Minimum pricing for maximum effect”, The Scotsman, 4 February). Heavy irony may be a crude rhetorical weapon but it’s certainly effective in making a point. Indeed it is perhaps most effective, as in this case, when the hard evidence for the case is rather harder to marshal convincingly.

The Scotch Whisky Association is indeed challenging the Scottish Government’s minimum pricing law in the courts. It is never comfortable to take legal action in this way against a law passed by parliament. That we are doing it is a clear indication of the flaws in the policy, which we believe would be ineffective, unnecessary, illegal, and counterproductive.

Sign up to our Opinion newsletter

Sign up to our Opinion newsletter

Ineffective because it doesn’t actually deal with the problem – which is the relatively small number of problem drinkers, not the four in five Britons who drink responsibly. The UK government set this out most clearly last year. It originally planned to introduce minimum pricing in England and Wales, but having seen all the evidence, decided not to proceed. It noted that the consultation “has not provided evidence that conclusively demonstrates that Minimum Unit Pricing (MUP) will actually do what it is meant to: reduce problem drinking without penalising all those who drink responsibly”.

Unnecessary because there are other solutions to the problem. For example, distortions in excise duty could be reduced. One possible reason why cheap cider is so often cited by supporters of minimum pricing is because the excise duty on cider is a tiny fraction of that on Scotch whisky. Moving to a fairer system of alcohol taxation in time would help eliminate many of these anomalies in pricing. Additionally, problem drinkers can be targeted by specific programmes. Indeed many such schemes are already being implemented, for example under the auspices of the Scottish Government – Alcohol Industry Partnership (SGAIP), and this industry’s own contribution through the Scotch Whisky Action Fund. Schemes like these may be why Scottish alcohol-related hospital discharge rates have fallen 14 per cent since 2008 and Scottish alcohol-related deaths have fallen by a third since 2003.

Illegal because it distorts the EU’s single market and because its aims can be achieved in other ways. The EU Commission itself said last year that the law “may create obstacles to the free movement of goods within the internal market contrary to article 34 [of the Treaty] and appears to be disproportionate under article 36. For these reasons… the draft regulation in question would be in breach of Article 34.” That view appears to be shared by the governments of France, Spain, Italy, Bulgaria, and Portugal, who submitted detailed opinions opposing the law. Whatever its supposed merits, there seems little point in debating a law that is so clearly illegal.

And counterproductive because there is a world beyond Scotland and the UK. Over 90 per cent of Scotch whisky is exported. It could be a lot more. In my past life as a diplomat I saw that Scotch whisky faces a range of unjustified barriers to sale in other countries – high import duties, taxation that discriminates against imported spirits, product regulations that local spirits pass but high-standard Scotch whisky somewhat implausibly fails. Many of these are justified by reference to how Scotch whisky is treated in its own, home market – Scotland and the UK. Because of the UK’s high reputation for effective regulatory policy and the beacon effect that goes with it, minimum pricing will certainly be used to justify maintaining these barriers, limiting the industry’s potential. It does not seem to me to be good policy to hamstring in this way a sector which is so crucial to the Scottish economy, which supports 35,000 jobs, and which generates over £4 billion annually for our exports.

I recognise there are strong views on alcohol policy. But it is a pity that the debate about it has become so polarised. As I begin my work as chief executive of the Scotch Whisky Association, I would like to work with all partners to try to build a broader and better consensus in Scotland around the best ways of tackling alcohol misuse. It is not too late for everyone to rethink and focus further on those measures which will actually work and which will make a real difference to people’s lives. The Scotch whisky industry is determined to be an effective partner in doing just that.

• David Frost is chief executive of the Scotch Whisky Association