'Case for minimum pricing is weak'
The case for having minimum pricing of alcohol is "weak" and previous studies about its impact have been "overestimated".
That's according to a new report into minimum pricing commissioned by brewer SABMiller and compiled by the Centre for Economics and Business Research.
It contradicts the findings of the Government-commissioned study from the University of Sheffield. It's set to be used to argue against plans to introduce minimum pricing in Scotland.
The CEBR study points to evidence from academics in other countries to show minimum pricing does not deter harmful drinkers.
A rate of 40p per unit, for example, would cut consumption in this group by just 2.3%, or one to two units per week. It estimates the net economic cost of minimum pricing would be around £2bn per year. A 50p unit price would see consumers paying almost £1.8bn per year for alcohol — £68 extra per household. The cost of £1.2bn is given for the lost enjoyment from drinking less after prices rise.
The benefits of improved health and job prospects are put at £0.8bn, while savings on NHS and policing costs would be around £200m.
Therefore the economic case for minimum pricing is "weak", the report says.
Ben Read, one of the report's authors, said: "The figures do not present a compelling case once you take into account the substantial additional costs to consumers and the fact that heavier drinkers are least responsive to price increases."
Read said the report raises "serious questions" about the Scottish Government's plan to adopt minimum pricing and urges further research.
'50p per unit will be bad news for small producers'
Minimum pricing will mean job losses in the industry and will "crowd out" smaller producers, the report says.
It would mean "higher profits for many firms" — a 50p level would see profitability boosted by £1.8bn to £2.2bn per year. But it would "exaggerate market failures".
"As well as promoting cartel-style profits, minimum pricing is also likely to lead to a reduction in the number of alcohol producers and brands. As such, price levels would 'crowd out' producers at the lower end of the market."
The figures don't distinguish between profits for producers or retailers.
Demand would be lower, leading to job cuts as production falls. A rate of 50p per unit would mean 2,800 jobs lost at producers and suppliers, with 67,000 "at risk".
The report points to Canada, which operates a form of minimum pricing in some provinces, to show the measure would see more powerful alcohol producers lobby for the rate to increase.
