Minimum pricing plans slammed by sector

Key figures from across the alcohol sector have joined MPs in condemnation of proposals to introduce minimum drinks pricing in England. The plans outlined today by Sir Liam Donaldson, Chief Medical Officer for England, call for drinks to cost a minimum of 50p per unit of alcohol.

Prime Minister Gordon Brown today expressed his reluctance to endorse such measures, claiming that the plan would unfairly punish the responsible majority of drinkers for the excesses of the binge-drinking minority.

Mr Brown said: "We don’t want the responsible, sensible majority of moderate drinkers tohave to pay more or suffer as a result of the excesses of a minority."

His view has been backed by the vast majority of the House of Commons and the alcohol industry in general.

Research from the Centre for Economics and Business Research(CEBR), commissioned by brewers SABMiller plc, claims that minimum pricing cannot be justified from the perspective of the consumer.

According to the CEBR data, consumers would end up paying almost £1.8bn per year more on alcohol – equivalent to £68 per household.

While this may represent a significant profits boost for UK suppliers, the report claims that consumers would lose out by the equivalent of an additional £1.4bn per years in lost ‘consumer value’ while the value of improved health and job prospects for individuals would be only £1bn per year.

Ben Read, managing economist at CEBR, said: "The published research on minimum alcohol pricing does not present a compelling case once you factor in the substantial additional costs to consumers.

"In fact, with direct financial costs to consumers in the UK of almost £1.8 billion per year and additional economic costs of £1 billion per year, the potential benefits start to seem pretty small in comparison.

"We welcome the government’s initial lukewarm response to these proposals and are confident that if they were subjected to a full regulatory impact assessment would be firmly rejected."

Mark Pragnell, CEBR managing director, added: "A key problem with minimum pricing is that heavier drinkers – those that the policy is supposed to be targeting – are least responsive to price changes.

"This means that minimum pricing is an incredibly blunt instrument which imposes significant costs across large sections of society, whilst having very limited benefits in terms of curbing the excesses of the minority."

Jeremy Beadles, chief executive of the Wine and Spirit Trade Association, said the proposals were inconsiderate to consumers at a time when people are being forced to tighten the purse strings.

"It isworrying that in the midst of a recession when sales and consumption of alcohol are falling that the government should be talking about raising prices for all consumers at a time when many are already struggling to make ends meet," he said.

Sir Liam, however, remains convinced that such measures are necessary to tackle the growing problem of alcohol misuse in England.

"Any plan to combat a problem needs a backbone," he said. "Price and access are that backbone – I will continue to champion it.

"Thisis a key measure which would almost certainly make a major impact on our drink problem as a country."

 © Alan Lodge  16.03.2009