Anger as Scotland pushes ahead with minimum pricing

Scottish government proposals to impose a minimum price of 45 pence per unit on alcohol has provoked an angry reaction from the industry.

The announcement came just days after Scottish Labour’s Alcohol Commission rejected minimum pricing in favour of a UK-wide ban on selling alcohol below the cost of tax, combined with excise duty reform.

Outlining her plan to push ahead with minimum pricing yesterday, Scottish health secretary Nicola Sturgeon, claimed that in its first year alone the policy would lead to a £5.5 million reduction in healthcare costs, 1,200 fewer hospital admissions and 50 fewer alcohol-related deaths.

Sturgeon argued that price had a major role to play in tackling alcohol abuse, saying: “It is no coincidence that as the affordability of alcohol has plummeted in recent decades, alcohol-related deaths, disease, crime and disorder have spiralled.”

Her announcement received backing from Scotland’s chief medical officer Dr Harry Burns, who said: “Scotland led the way in the UK when it came to banning smoking in public places and I believe we must also lead the way in introducing a minimum price for alcohol.”

However, Diageo condemned a minimum price strategy as “wrong in principle”. The drinks giant argued that such a move would: “impact all consumers, the majority of whom enjoy alcohol responsibly without harm to themselves or others.”

Instead Diageo called for a fresh approach to tackling the problems of alcohol abuse, saying: “The debate in Scotland has moved on. It is time for the Scottish government to recognise that and engage in broader discussions.

“Our view remains that targeted interventions would be much more effective and appropriate.”

Richard Taylor, director of corporate affairs for Morrisons, which has more than 50 stores north of the border, also argued for an alternative solution. Referring to a letter presented by the retailer to the UK home secretary in June this year, he said: “Instead of a minimum unit price we believe that the UK government should legislate to stop the sale of alcohol below the rate of duty plus VAT.

“This mechanism, if enshrined in law, would provide an immediate and fair approach to stem the misuse of alcohol and provide a solution across the whole of the UK, including Scotland.

“If the Government thinks price is a way to affect demand it can do so by raising duty knowing that it will apply across the UK. As a demonstration of our commitment to this proposal, Morrisons does not sell alcohol below the cost of duty plus VAT.”

The Scotch Whisky Association (SWA) added its voice to support for duty reform instead of minimum pricing. Gavin Hewitt, chief executive of the SWA, called the former “a fair and socially responsible way forward,” adding that “it would also raise over £1 billion extra revenue for the public finances.”

By contrast, the SWA warned that minimum pricing would increase an averagely priced bottle of Scotch whisky by 16% to £12.60, predicting that this would lead to a 13% decline in the product’s domestic market. The association also maintained its argument that such a move would breach EU and international trade rules.

The Scottish government is now due to table an amendment to the Alcohol (Scotland) Bill to include the 45p price as the bill enters the second stage of the parliamentary process.

Gabriel Savage, 03.09.2010