Getting the price just right

Minimum pricing may still be a problem. These days, it seems there are as many opinions as there are MPs in the House of Commons, to judge from the clamour from almost every one of them to have their say on the drinks industry.

They do it on select committees, departmental committees, questions to ministers, statements to the press and national and regional conferences. When it comes to alcohol, they certainly know their stuff!

The Morning Advertiser faithfully reports their proposals and comments, as it should do. But how much weight to attach to each of them is difficult to judge, because Government comes under influence from many hundreds of sources every day and only a small percentage of their suggestions ever proceed beyond the headlines, let alone into legislation.

A good example of this is minimum pricing. The phrase has been bandied about a great deal in recent months, but very few of the commentators have a clear idea of what it might mean in practice. Clearly, the on-trade thinks it means stopping the supermarkets from selling pallet-loads of beer packs at £6 or £10 a time and stacking them at the front of the store where everyone has to steer round them to shop. In some areas, the police think it means low-cost promotions in the on-trade, designed to lure customers away from rivals. Others think it simply means putting cheap alcohol out of the reach of children.

So what does it mean in practice? To set some form of minimum price is very difficult in legislative terms, because it interferes with many other factors in retail. Over the years, Chancellors of the Exchequer have loaded tax onto cigarettes, for one reason, and petrol, for another. They also have already taken a huge slice of the beer, wine and spirits market through taxation as well. You could say that in the case of tobacco in particular, the tax has resulted in a minimum-pricing strategy because all cigarettes are now so expensive.

But this has also been coupled with other deterrent measures, designed to stop people smoking, including health warnings on packets and the premises smoking ban. It is a single product, almost always sold in the same quantity in the same type of packaging, and its uniformity has assisted in allowing the Treasury to set a minimum price.

But alcohol is very different. It comes in a variety of shapes and sizes, is sold in a multitude of situations and its price is based on use and location as much as product. Minimum unit pricing by legislation could only work if all situations to which it applied were similar. But the marketplace and competition ensure that this is not the case.

Talking of competition brings us face to face with Europe: any legislation which is geared up to affect, control or restrain competition, either between member states or within states, is going to be scrutinised by Brussels, even though alcohol pricing is a matter for individual countries within the EC at present. For more than a decade there has been a policy of pursuing harmonisation on alcohol duties, but this has not yet been achieved — and there is no immediate prospect that it will, hence the differential between the prices on each side of the Channel.

So minimum pricing sounds fine in theory, but it will take a considerable exercise in drafting for the legislators to ensure that it is entirely fair in practice and does not cut across our obligations under the Treaty of Rome either. That is easier said than done.