So, The Grocer's editor has now come out in favour of a minimum price for alcohol. Ah well, as Shakespeare put it ,"a little fire is quickly trodden out, which, being suffer'd, rivers cannot quench".
While superficially more attractive than trying to ban below-cost selling, which has failed wherever it has been tried, minimum pricing has two big problems.
First, supporters frequently argue that, at 50p a unit, it wouldn't punish responsible drinkers. Obviously not, but neither would it have much effect on the habitual binge drinkers. It wouldn't deter happy hours and other volume-moving offers in the on-trade and the only effect on the off-trade would be a slight increase in retailers' margins.
The minimum would have to be at least £1 per unit before it had any significant impact on the big drinkers but at that level it would also penalise the moderate ones. Even a government anticipating unpopularity over the next few years would balk at this increase.
Second, the legality of minimum pricing is heavily qualified. While recognising that it is legitimate for member states to pursue public health objectives, any curbs on retail pricing must not infringe the free movement of goods within the EU. So, in the case of alcohol, the same minimum pricing regime must apply to other imported products.
The government would also be obliged to prohibit suppliers from offering retailers promotional incentives since these would effectively undercut the minimum price. Recently, however, the European Court of Justice ruled against minimum prices for tobacco in three states on the grounds that they impaired the ability of lower-cost manufacturers and importers to pass on their savings.
Another obstacle in EU law is the requirement for governments to consider alternative means of reducing harms to public health that would not restrict intra-community trade. The obvious alternative to minimum pricing is a progressive increase in excise duty, which would clobber the virtuous as well as the sinners.
The sensible alternative is to encourage moderation by levying a higher rate of duty on those products that topers love. This, however, is forbidden by the EU.
Meantime alcohol consumption is falling steadily and will continue to decline as incomes and benefits are squeezed during the impending age of austerity. The problem may ultimately resolve itself.
Kevin Hawkins is an independent retail consultant.
While superficially more attractive than trying to ban below-cost selling, which has failed wherever it has been tried, minimum pricing has two big problems.
First, supporters frequently argue that, at 50p a unit, it wouldn't punish responsible drinkers. Obviously not, but neither would it have much effect on the habitual binge drinkers. It wouldn't deter happy hours and other volume-moving offers in the on-trade and the only effect on the off-trade would be a slight increase in retailers' margins.
The minimum would have to be at least £1 per unit before it had any significant impact on the big drinkers but at that level it would also penalise the moderate ones. Even a government anticipating unpopularity over the next few years would balk at this increase.
Second, the legality of minimum pricing is heavily qualified. While recognising that it is legitimate for member states to pursue public health objectives, any curbs on retail pricing must not infringe the free movement of goods within the EU. So, in the case of alcohol, the same minimum pricing regime must apply to other imported products.
The government would also be obliged to prohibit suppliers from offering retailers promotional incentives since these would effectively undercut the minimum price. Recently, however, the European Court of Justice ruled against minimum prices for tobacco in three states on the grounds that they impaired the ability of lower-cost manufacturers and importers to pass on their savings.
Another obstacle in EU law is the requirement for governments to consider alternative means of reducing harms to public health that would not restrict intra-community trade. The obvious alternative to minimum pricing is a progressive increase in excise duty, which would clobber the virtuous as well as the sinners.
The sensible alternative is to encourage moderation by levying a higher rate of duty on those products that topers love. This, however, is forbidden by the EU.
Meantime alcohol consumption is falling steadily and will continue to decline as incomes and benefits are squeezed during the impending age of austerity. The problem may ultimately resolve itself.
Kevin Hawkins is an independent retail consultant.
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