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Saturday, 18 September 2010

Government rejects minimum pricing in favour of maximum tax

The Publican, the magazine of the pub trade, petitioned the government to introduce a minimum price of 50p for every unit of alcohol sold. They argued this would end cheap booze promotions in supermarkets and bring off-trade prices closer to the cost of alcohol in the pub. 
Supermarket booze
The government's response was:
"There are no plans to implement a minimum unit price at this time. The government is concerned about the impact of low-cost alcohol on consumption levels and alcohol related crime and disorder. To tackle this we are committed to banning the sale of alcohol below cost-price.

"In addition, as part of the government’s commitment to tackle alcohol-related crime and disorder, we will undertake a wider review of alcohol taxation and pricing to ensure that it tackles binge drinking without unfairly penalising responsible drinkers, pubs and important local industries. We cannot prejudge the outcomes of this review, and therefore will not make any further commitments regarding alcohol pricing until the results are published."

While I agree with The Publican's assertion that the pub is the home of responsible drinking, I don't agree with the call for minimum pricing of alcohol, for reasons that I wrote about on 7 August last year - click here if you wish to see what I wrote then.

As the ConDem government has said it will maintain the beer tax escalator, whereby beer tax goes up by more than inflation, it would seem that maximum taxation is what's really on their agenda. Minimum pricing would simply put more money in the pockets of retailers, whereas the escalator puts it into Treasury coffers. So, I don't think there's any altruistic motive for rejecting minimum pricing, and talk about tackling "binge drinking without unfairly penalising responsible drinkers" is just so much eye wash.

5 comments:

  1. Sadly it seems that although the government won't be introducing it nationally, they will allow local authorities to do so.

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  2. Not saying it's a good idea, but increasing duty rates is a much more intellectually coherent policy than minimum pricing.

    However, I suspect we are now about on the tipping point where increasing duty actually ends up bringing in less revenue. We already have the highest alcohol duties in Europe, excepting Ireland and the Nordic countries.

    Nobody in the beer blogosphere, of whatever political standpoint, seems to support minimum pricing, so why do CAMRA nationally still champion it?

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  3. I agree with both of you, and that's a good question, Curmudgeon. I wrote an article for our local CAMRA magazine against minimum pricing, inviting anyone who disagreed to put the opposing viewpoint. I also asked if anyone in the local CAMRA branch wanted to respond. There were no takers.

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  4. A couple of years ago I wrote the following letter to What's Brewing, which was never published:

    Dear Sir,

    It is one thing to use minimum alcohol pricing as a way of curbing irresponsible promotions, but something else entirely to use it to raise the price of mainstream products bought in the off-trade. In advocating a 50p per unit minimum price, one could be forgiven for thinking that CAMRA had become part of the anti-drink lobby.

    A large proportion of alcohol drunk at home is consumed entirely responsibly in circumstances where going to the pub isn't necessarily a realistic alternative. If a family have to pay £4.88 rather than £3.49 for the bottle of wine they have with their Sunday lunch, or a pensioner has to pay £14
    rather than £9.99 for the bottle of Scotch that provides his daily nightcap, they may be forced to cut back on the amount they buy, but they won't suddenly start going to the pub.

    This measure would make a large hole in family budgets that are already being put under severe pressure by the economic downturn, and would not free up a single penny to be spent in pubs. Indeed, in penalising poorer households but leaving the better-off unscathed, it comes across as élitist and regressive. Surely the best way of championing pubs is to highlight the positive reasons for visiting them - not least the availability of real ale - rather than trying to hobble the competition.

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  5. Once again, I agree with you Curmudgeon. If we do this too often, people will start talking ...

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