Greene King in call for rules on pricing

A REGIME of minimum pricing for alcohol sales could be an effective way of reducing the problem of anti-social drinking, according to a report produced for pubs and brewing group Greene King.

The Bury St Edmunds-based company commissioned its own research in response to a report on the impact of minimum pricing by the Institute of Fiscal Studies (IFS).

Greene King said yesterday that its research, conducted by FTI Consulting, showed that the current approach of discouraging consumption through taxation was “a blunt instrument”.

Not only did taxation affect all consumers, rather than just problem drinkers, there was also a risk that some retailers might decide not to pass on increases to consumers, so reducing the effectiveness of the policy.

A further increase in taxation could also result in further illicit cross-border trade, which already cost the Treasury �600million a year in lost revenues.

Greene King added that the IFS research also challenged a conclusion by the IFS that minimum pricing would generate a profit to the UK alcohol industry. Applying data from HM Revenue & Customs on the link between alcohol consumption and price showed that minimum pricing could, in fact, cost the industry between �590million and �1.2billion a year.

The FTI report concluded that, in contrast with increased taxation, minimum pricing would provide a targeted solution to problem drinking by raising the price of the cheapest alcohol and so tackling directly the behaviour causing most concern.

Most Read

“Neither banning below cost selling, which seems to be the current favoured approach of the Government, nor resorting to raising taxes are the answer to addressing this important social problem,” said Greene King in a statement yesterday. “A tax rise would affect not only the small minority of problem drinkers but also the majority who drink responsibly.

“The core problem lies with a minority of people purchasing cheap booze from off-licenses and supermarkets and so using tax as a method to address this would penalise further community pubs and responsible drinkers, which are not part of the problem.

“A minimum price, however, would go right to the heart of the issue, targeting easily available alcohol sold at pocket money prices.”

With many pubs unable to compete against the prices offered in some sections of the off-trade, there was an ongoing shift from regulated drinking in pubs to less-regulated drinking elsewhere, which was having “significant negative social consequences”, it added.

The drinks industry is divided over the issue of minimum pricing, with the idea also being supported by parties such as brewing giant Coors and the Federation of Licensed Victuallers Associations while drinks groups SAB Miller and Diageo are opposed to it.

Also in the anti camp is the Wine and Spirit Trade Association (WSTA) which opposed attempts to introduce minimum pricing in Scotland earlier this year on the grounds that the proposed minimum price of 45p per unit would hit low-income households without curbing problem drinking.

A number of local authorities in England and Scotland are said to be considering the option of introducing minimum pricing through by-laws, with those in the Greater Manchester area thought to favour a minimum price of 50p per unit.

Prime Minister David Cameron has signalled his support for localised minimum pricing rules but opponents of the policy, such as the WSTA, argue this approach is not only wrong in principle but would represent a breach of European Union competition laws.