UK government sets out new rules on alcohol pricing

The UK coalition government is poised to introduce a ban on selling alcohol below the rate of duty and VAT as part of a renewed assault on the country’s binge drinking problems.

The move – which would effectively introduce a minimum price of at least £2 on a bottle of wine, £10.50 on a bottle of spirits and £8.50 for a 20-pack of beer – falls well short of the measures called for by health campaigners.

They have argued that a minimum price per unit of alcohol would be the most effective way of cutting consumption and tackling the health and social issues associated with excessive drinking.

Health Secretary Andrew Lansley told the Andrew Marr Show on BBC1: ‘We have said as a government that we are going to ban the below-cost sales of alcohol, because we have to have a combination here, we have to have action by the government.’

The move was welcomed by the Wine and Spirit Trade Association (WSTA), whose head of communications Gavin Partington told Decanter.com: ‘It’s very different to minimum pricing.

‘We’ve said for some time that we believe a ban on sales below duty and VAT is desirable, because these are consumer taxes. We honestly think it’s the right way to go.’

A more precise ‘below cost’ ban was impracticable because the trade cost of buying alcohol varied so widely between retailers, and trying to regulate it might infringe competition law, Partington added.

‘We think this is the easiest and most straightforward way of doing it,’ he said.

Retailers flouting the new pricing regulations could face the loss of their licence to sell alcohol, as well as heavy fines.

Other measures to be introduced could include a new tax bracket for ‘super-strength’ beers, and stiffer penalties for retailers caught selling alcohol to underage customers.

Written by Richard Woodard