OFT chief warns against minimum pricing

Any move to set a minimum price for alcohol is likely to be strongly challenged by the Office of Fair Trading (OFT).

John Fingleton, OFT chief executive, has sent a clear signal to the Scottish government - as well as the Westminster health lobby - that his competition watchdog believes a minimum price per unit would be against the spirit of UK competition law.

Fingleton said higher levels of duty were the right way to reduce alcohol consumption to meet public health objectives.

In a speech to the Regulatory Policy Institute, Fingleton warned that minimum pricing would also reduce the incentive for drinks companies and retailers to innovate and reduce costs.

He said: "'UK consumers currently benefit hugely from hard-fought decisions over the last three decades to open markets to competition. We should not lightly roll back on that with increased domestic or international protectionism."

The Scottish Government plans to introduce a 40p a unit minimum as a central plan of its alcohol strategy. Similar moves have been called for in other part of the UK.

Last week, the EU said that member states could legally introduce minimum pricing on public interest grounds, providing the rules were applied equally to domestic and imported products.

Fingleton argued against this view.

He said: "There is a political risk that in the interest of achieving a specific policy objective, weakening competition can be seen as an attractive short-term option where the alternatives might be to introduce a tax or implement more targeted regulation."

The OFT has been in touch with the Scottish government to register its concern about the proposed minimum pricing policy.