Alcohol minimum pricing €“ will it work?

Alcohol presents a huge dilemma to Government. On the one hand, alcohol misuse in the UK carries an enormous price tag of about £6 billion a year in costs to the NHS, losses to business (from absenteeism and suboptimal performance) and alcohol-related crime and accidents (1).

On the other hand, the Government receives about £11.5 billion in duty and VAT from the drinks industry each year.

So when the Government considers the issue of alcohol from a purely fiscal point of view (ignoring the tide of human misery that alcohol all too often leaves in its wake), it is clearly not worthwhile doing anything that will seriously affect alcohol sales.

This is reflected in the weak minimum pricing legislation being considered by Ministers at the present time. It is proposed that alcoholic drinks cannot be sold for less than the cost of the duty and VAT, but doesn’t include the cost of making the drinks in the first place.

According to a BBC report (18th January), this means that a can of weak lager can still be sold for 38p – well within the reach of most children, never mind adults who can direct their greater spending power to stronger stuff.

Interestingly, the Scottish Government had to abandon its plans to include a minimum pricing policy in their Alcohol Bill because not enough MSPs would support it. One of the objections was that it would “put £140m per year into the pockets of supermarkets” (2).

There is an alternative, however. Andrew Leicester, a Senior Research Economist at the Institute of Fiscal Studies (IFS) acknowledges that “Minimum alcohol prices would transfer large sums from consumers to those firms that retail and produce alcohol …. However, higher taxes would generate much needed revenue.”

Current EU regulations prevent the British Government from taxing the number of units directly for some alcoholic drinks but Andrew Leicester suggests that “The Government should seek to change European regulations on how alcohol taxes can be structured, so that taxes can mimic the impact of minimum prices whilst ensuring the resulting revenues go to the Government and not firms”. (3)

But would increasing the price of alcohol in the way that is currently being proposed really make a difference to current harmful levels of consumption? Probably not. Retailers will still be able to sell alcoholic drinks for less than the cost of an average soft drink. Professor Ian Gilmore of the Royal College of Physicians commented that “It’s a step in the right direction but I have to say, it’s an extremely small step. It will have no impact whatsoever on the vast majority of cheap drinks sold in supermarkets.” (4)

Hope UK would back a meaningful increase in the cost of alcohol, but does not believe that this is the whole answer. Attitudes toward alcohol need to change and the Church has a part to play - ‘Desperate times call for desperate measures.’

If we acknowledge that the problem with alcohol in the UK has reached ‘desperate’ levels (leaving aside the economic cost), then why shouldn’t Christians show by example that alcohol is not an indispensable part of a fulfilled life? Can we not do without our ‘drug of choice’ for the sake of the many weaker brothers out there who can’t live with alcohol and think they can’t live without it?



Marolin Watson is Business Manager at drug education charity Hope UK www.hopeuk.org


1) http://www.dailymail.co.uk/news/article-19699/Alcohol-abuse-costing-Britain-6bn-year.html#ixzz1BOj5K9Nj

2) Jackie Baillie, Scottish Labour health spokesperson quoted in ‘Tax increases ‘superior to minimum prices’, The Globe, Issue 3 2010.

3) Press Release, ‘Minimum alcohol price of 45p per unit would transfer £700m from drinkers to firms’, 28th Sept 2010, Institute for Fiscal Studies

4) ‘Minimum alcohol price levels planned by coalition’, BBC News, 18th January 2011