Drinks industry divided on minimum pricing

Tesco, Decanter, Prime Minister David Cameron, Home Secretary Theresa May, Sainsbury’s, Drinkaware, Wine and Spirit Trade Association, British Retail Consortium, Royal College of Physicians News Wine News http://decanter.media.ipcdigital.co.uk/11150/000002c31/a1f8_orh100000w160/may.jpg http://decanter.media.ipcdigital.co.uk/11150/000002c31/a198/may.jpg
  • Friday 23 March 2012

The drinks industry, including retailers and lobbying groups, have condemned the government's announcement on setting a minimum price on alcohol as 'simplistic' and 'doing nothing to tackle the root causes of alcohol misuse'.

Theresa May

May: 'price has effect on consumption'

The industry is by no means united, however, with Tesco, and Decanter’s editor among others welcoming the proposals

In an effort to curb binge drinking, and ‘pre-loading’ – drinking heavily at home before going out – Prime Minister David Cameron will announce today a policy to set a minimum price per unit of alcohol, which will probably start at £0.40.

This will see a bottle of wine with 14% alcohol costing not less than £4.20, a £2.99 bottle of red wine, containing 9.4 units of alcohol, would go up to £3.76,
cheap beer and cider would go up in price, while whisky and vodka is likely to drop by up to £0.80.

Home Secretary Theresa May insisted on BBC radio today that ‘international and historic evidence’ shows that addressing the price of alcohol does have an effect on consumption.

The government also promises to look at the issue of deep discounting such as three-for-two deals on bottles of wine.

May said the government will be ‘talking to industry’ because [deep discounting] is ‘allied to the cheap price that is leading to this pre-loading’.

Decanter editor Guy Woodward said the government’s motivation, that alcohol should not be sold too cheaply, is valid. ‘In principle, I'm in favour of the policy.’

He said supermarkets ‘have long had the opportunity to act more responsibly in the kind of deals they promote, but they have not taken it. Hence we still see alcohol being sold below cost. If the trade can't get their house in order, then the government has a duty to tackle the problem.

‘We've said for a long time that at the lower end of the market wines are sold too cheaply. A 40p per unit price would raise a £3 bottle to nearer £4 – still cheap, but a start on the road to dispelling the motion that you can get decent wine for under a fiver.

'The main problem, though, remains with supermarkets discounting wines to below cost simply to increase footfall, which is a cynical, irresponsible tactic. I hope the government will address this too.'

However, many in the drinks industry feel the policy does not address the real problem of alcohol abuse.

A spokesman for Sainsbury’s said, ‘We do not support minimum pricing as it will unfairly penalise the vast majority of customers who buy alcohol as part of their grocery shop and drink responsibly. It is disappointing that the Government has chosen this route and we continue to believe there is no simple link between price, consumption and alcohol misuse.’

Chris Sorek, chief executive of alcohol education charity Drinkaware, said it fully supports all measures to tackle alcohol abuse but the new ‘headline-grabbing’ strategy did not address the problem of Britain’s ‘hidden binge drinkers’ - working professionals who regularly drink more than recommended guidelines at home.

‘We would like to see more emphasis on tackling the habitual drinking behaviour of UK adults which, if not addressed, will have serious implication for the health of the nation.’

Gavin Partington, interim chief executive of the Wine and Spirit Trade Association, said, ‘We oppose minimum unit pricing and the proposed restrictions to promotions which will adversely affect millions of consumers and businesses in the UK, while doing nothing to tackle the root causes of alcohol misuse.

‘A wide range of policies are required to address problem drinking in the UK, including improving education and information campaigns, and better enforcement of existing legislation.’

Andrew Opie of the British Retail Consortium said, ‘It's simplistic to imagine a minimum price is some sort of silver bullet solution to irresponsible drinking.’

Others welcomed the proposals. Professor Sir Ian Gilmore, of the Royal College of Physicians and the Alcohol Health Alliance, said healthcare workers ‘will welcome tough new policies in areas such as price and licensing that are based on evidence and should bring about real benefits.’

Dan Jago, head of beers, wines and spirits at Tesco, said, ‘We are committed to engaging constructively in discussions with government on ways we can help to do so, including minimum pricing, and look forward to doing so in the coming months.’

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