Minimum Alcohol Pricing has been a sensitive subject in the alcohol industry for the last couple of years. About a week ago, the Welsh Government unveiled plans to introduce a minimum price per unit as part of a wider health bill. The debate was reignited, but I haven’t seen a huge amount written about it.
I’ve been considering writing about the topic, because it’s something I feel strongly about. Alcohol is a dangerous substance. It causes millions of pounds in health and police spending. It is a luxury, not to be taken for granted.
So what’s the argument?
Currently, it is against the law to sell alcohol for anything less than cost price (alcohol duty + VAT). Obviously, it’s unlikely that anybody would sell anything to make a loss, but there are situations where it could happen. A limited time offer could see the store make a loss on the product for a short time, to increase profitable sales later. Discount stores, buying goods nearing sell by date or from bankrupt businesses looking to sell on their remaining stock. The current laws prevent these situations by ensuring the price to put the product on the shelf (not even including ingredient or labour costs!) is the minimum it can be sold for.
The UK Government’s alcohol strategy originally called for minimum alcohol pricing, before the plan was scrapped. the 2012 plan would see a 45p minimum on each unit of alcohol.
It’s important to note here that this would not mean an extra 45p would be added to the cost of your pint and end up in the tax man’s coffers. It just means that each unit in that pint would have to cost at least 45p, so a pint of 3.5% ABV ale, or two units of alcohol, would have to cost at least 90p. I haven’t seen a pint at that price, well, ever.
Minimum alcohol pricing isn’t designed to raise the price of all booze because all booze is bad. It’s designed to raise the cost of the bad booze, the stuff that exists only to get people smashed as cheaply as possible. It’s a tax on the stuff that causes the problems – hospital admissions, police call-outs and deaths from alcohol abuse.
Take this bargain for example:
Let’s take the deal because, y’know, can’t afford not to. Frosty Jack’s is 7.5% ABV, so that’s 22.5 units in each 3 litre bottle. 2 bottles, 6 litres, 45 units. For £7.
That’s 15.555p per unit.
Even without the deal, this is a steal. 20p per unit if you buy a bottle on its own. But why would you do that? You’re throwing money away.
With a 45p mimimum alcohol pricing, a bottle of Frosty jacks would cost just over a tenner. 225% of the original price.
The cost of a half of Gamma Ray, a can of Dead Pony Club, a pint of Brains Dark, a Guinness, a Stella, a Peroni, a Hobgoblin or even a Carling, wouldn’t change at all.
Detractors say that minimum alcohol pricing unfairly punishes moderate drinkers, but what moderate drinkers are drinking Frosty Jack’s? (Other ludicrously cheap, high ABV booze juices are available.)
Minimum alcohol pricing would force drinkers consuming high levels of alcohol to think twice, and may even force them to reduce their alcohol consumption.
I’m going to write a follow up once the debate has gone on a little longer and more pros and cons have been raised. For that reason, I’d love for you to leave your opinion on the matter in the comments below. I’m going to be asking people in and around the industry – producers, sellers and drinkers – and hopefully we can get a good spectrum of opinions and be able to address all concerns.
So the question is: Minimum Alcohol Pricing: Where do you stand and why?