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Minimum pricing – more harm than good?

The Wine & Spirit Trade Association (WSTA) has warned that Government plans to hike up the price of alcohol risk boosting crime, as well as damaging UK businesses and the health of consumers.
In its submission to the Government’s consultation on the Alcohol Strategy, the WSTA accuses the Government of failing to make a realistic assessment of the wider impacts of increasing the cost of alcohol on the economy and crime rates.
The trade body has raised concerns that proposals for a minimum unit price of alcohol will lead to an increase in bootleg alcohol sales, fake alcohol production, theft and cross-border sales.
A 50p minimum unit price would set a minimum price of £4.88 for a bottle of wine in the UK, compared to around £1.89 in France, it is feared that consumers could turn their backs on UK retailers in favour of cheaper prices across the Channel. Evidence from the Republic of Ireland shows that increasing alcohol prices leads to a clear shift to cross-border purchasing, in 2008 – when prices were boosted in ROI – alcohol sales in Northern Ireland increased by 25%.
In addition, increasing alcohol prices could risks pushing alcohol further into the hands of unregulated sellers, which could increase health risks to consumers. The WSTA has warned that, as the cost of alcohol rises, consumers will look for cheaper options, which is likely to bolster the bootlegging of alcohol and the ‘White Van Trade’, including the increased production of self-brewed alcohol for sale and fake alcohol products.
The WSTA has also raised concerns about the impact that increased alcohol prices could have on retail theft. During Christmas 2012 alone, retail theft in the UK grew 3.4% compared to the same time the previous year, leading to losses estimated at £999.7m for British Businesses. The WSTA has argued that pushing up the price of alcohol will increase its attractiveness to thieves and cost businesses even more in the long run – at a time when they are already struggling to cope in the current economic climate.
Miles Beale, CEO of the WSTA, which is leading the ‘Why Should Responsible Drinkers Pay More?’ campaign against minimum unit pricing, said: “There is a real risk that this illegal activity will increase if alcohol prices are forced up even more. Consumers in the UK already pay some of the highest prices in Europe for alcohol and further price rises could result in some serious unintended consequences that the Government has failed to consider.
“The Government's plans to set higher alcohol prices could increase illicit, unregulated sales of alcohol which will risk harming consumers and depriving the Treasury of revenue. It will also have a massive detrimental effect on the UK economy, making British businesses more vulnerable as they lose out to cheaper, and sometimes illegal, sources.”

The WSTA aims to start the debate with ordinary people about the impact that the Government’s plans will have on their everyday lives. Polling by ComRes on behalf of the campaign already shows major public opposition, with fewer that one in five overall (19%) supporting MUP and 87% believing that binge drinking will continue irrespective of the plans to set higher alcohol price.

The campaign ‘why should we pay more’ allows people to get in touch with their local MP, through email or Twitter, to voice their opposition to minimum unit pricing. They can also sign an online petition and calculate the costs of the policy on their shopping baskets.

The Government’s plans to set a 45p minimum unit price will, according to its own figures, cost consumers in England and Wales more than £1 billion pounds extra per year. Research from the Centre for Economics and Business Research also shows that it will hit the poorest hardest – with the lowest 30% of earners bearing the brunt.

Facts at a glance

A 50p minimum unit price would see 65% of alcohol prices in shops and supermarkets rise overnight.*

  • A bottle of wine (13% ABV) would rise in price from £3.69 to £4.88
  • A bottle of vodka (37.5% ABV) would rise in price from £10.00 to £13.13
  • A 12-pack of lager (4% ABV) would rise in price from £8 to £10.56

A 45p minimum unit price would see 52% of alcohol prices in shops and supermarkets rise overnight.

  • A bottle of wine (13% ABV) would rise in price from £3.69 to £4.39
  • A bottle of vodka (37.5% ABV) would rise in price from £10.00 to £11.81
  • A 12-pack of lager (4% ABV) would rise in price from £8 to £9.50

The UK already has some of the highest alcohol prices in Europe, and given that alcohol consumption has fallen by 13% since 2004, these radical plans to increase the price of alcohol seem completely unfair, untargeted and ineffective.

The WSTA is the UK lobbying organisation for the wine and spirit industry representing over 340 companies producing, importing, transporting and selling wines and spirits.

20 February 2013 - Felicity Murray