Some retailers and brewers may have decided to work with the government but the industry may still mount a legal challenge
While all the talk in Westminster surrounded sausage rolls this week, the implications of the government’s move to bring in minimum pricing for alcohol have sparked serious divisions in the industry.
Tesco and The Co-operative Group have swung behind the prime minister’s plans, joined by some of the UK’s top brewers - including Molson Coors and Magners owner C&C - in arguing that only government legislation could eliminate subsidised booze deals without an OFT enquiry.
“We support minimum pricing at 40p and believe there has to be a balance between the deterrent to abuse alcohol and commercial reality,” says a C&C source. “We feel it’s an opportunity to work with the government on such a fundamentally important issue.”
Molson Coors CEO Mark Hunter adds that cheap booze had damaged the respect for his brands as he welcomed the chance to work with the PM.
And Martin Dickie, founder of BrewDog, Scotland’s largest independent brewery, says the UK’s alcohol problems have been caused by “stack them high, sell them cheap bargain basement deals offered by giant breweries only interested in shifting their tasteless lagers.”
But this collusion is countered by derision from others determined to fight the plans, who warn “waving the white flag” invites the Home Office to go further than the 40p unit price suggested to date.
“Some in the industry appear totally resigned to this,” says one brewing source, “but we don’t think that is the case and we are very far from running up the white flag.” The source claimed there were still a number of opportunities for the industry to make a case against minimum pricing.
“I don’t think it’s right to invite government into matters determining the price of our products,” he says. “What is 40p today could be 50p or whatever in a year’s time. We need more red tape and government legislating in this way like a hole in the head. What happened to the nudge philosophy?”
Sources claim the government planned to make 50p its minimum price, only backing away because No. 10 got cold feet at the backlash from the scrapping of the 50p tax rate.
Industry leaders expect a challenge from producers to focus initially on the plans in Scotland, as they are more advanced. However, if the European Commission investigates, it would be down to David Cameron to oversee the UK’s response. When he released his alcohol strategy last week, the PM claimed it was a myth that it would be illegal but if the industry fights, some believe the plans could be delayed for years.
Meanwhile they face domestic scrutiny from a health Committee inquiry. While the ground to be covered raised a few gasps from the industry by including areas such as plain packaging, marketing bans, or even whether the legal drinking age should be increased, these were widely dismissed.
More significant could be the committee’s decision on whether the Home Office, or DH should lead on alcohol policy.
“This inquiry will allow us to present the evidence against,” said Gavin Partington , interim CEO of the WSTA. “We are looking forward to the chance to make our case.”