The problem with minimum pricing

By Matt Eley Matt

- Last updated on GMT

Related tags Minimum pricing Price Snp Government Scotland

In an industry where it sometimes seems that business leaders struggle to agree on anything at all, there is one issue that has divided opinion like...

In an industry where it sometimes seems that business leaders struggle to agree on anything at all, there is one issue that has divided opinion like no other over the last couple of years.

To many licensees minimum pricing would be a simple and perfect solution to close the gap between pub prices and the bargain basement supermarket deals that are more prevalent than ever at this time of year.

The measure has also gained support from the likes of Greene King, Molson Coors, and trade groups including the BII, CAMRA and the Federation of Licensed Victuallers Associations.

But for every Coors there is a Diageo or SABMiller vehemently opposed to the measure. Likewise, there are as many trade groups who believe minimum pricing is either illegal or morally wrong as there are those in support of introducing a fixed price per unit of alcohol.

And it is no surprise that as the industry itself struggles to agree on the issue, politicians equally have mixed opinions.

Is this an end to it?

But with MSPs in Scotland recently scuppering the ruling SNP's third and final attempt to have the measure approved, surely this is the end of the matter?

After all, what happens north of the border is watched and often repeated down south, so in this case will the rejection also be followed?

Well, for once there seems to be a broad consensus of opinion that the 76-49 vote against minimum pricing is definitely not the last we will hear on the issue.

For one Paul Waterson, chief executive of the Scottish Licensed Trade Association - and minimum price supporter - believes the SNP will try again if they are re-elected next year.

But more likely is that Scottish councils will follow the lead of the handful down south who, with support from the health lobby, are looking to introduce minimum pricing as a bylaw.

Waterson said: "It is definitely not finished up here in the sense that there has been quite a lot of disquiet over the fact that it was rejected for political reasons by the opposition parties.

"There are as many people saying it is illegal as those saying it is legal and it is unclear as to what the law is for councils.

"The government up here has lost minimum pricing but alcohol abuse will continue and they will be vindicated by supermarket prices.

"It is not the end of the matter as far as we are concerned."

The Wine and Spirit Trade Association (WSTA) does not tend to agree on much with Waterson when it comes to minimum pricing but it does concur with his view that councils - on both sides of the border - are now likely to be the driving force behind pricing policies.

And Downing Street has already signalled some support for such plans in Manchester. This is something the WSTA will be fighting tooth and nail against.

Spokesman Gavin Partington said: "I don't believe this is the end of it in Scotland or England because so many local authorities are being encouraged by health bodies.

"Minimum pricing is part of the health policy of the British Medical Association and the Alcohol Health Alliance."

The WSTA's take on the issue of cheap alcohol is that a minimum price would not stop problem drinkers but instead unfairly punish the poor.

However, the group - which numbers major supermarkets among its membership - does back the UK government's 'pragmatic approach' to the issue by examining the banning of below-cost selling.

Below-cost selling complexities

But this is potentially as complex as introducing minimum pricing. The government has already said it needs more time to examine how it will work and the earliest we will see it is May 2012.

Nevertheless, it's a position that has gained support from the British Beer & Pub Association, which has never advocated a minimum price for fear of the government meddling with the prices businesses sell their wares at.

A spokesman said: "I think the issue is moving on. Any minimum pricing plans are fraught with difficulties, but especially any plans to set them at a sub-national level.

"In Westminster, debate is now very focused on a workable scheme on below-cost selling. It's the only fair and effective way to tackle low prices, and we are keen to work with the UK government on the best way to achieve this."

That stance might be greeted with dismay by the 1,000 plus people who signed The Publican's Make it the Minimum petition, which called for the government to introduce a 50p unit price (the SNP later opted for 45p).

Such a figure would make little difference to the price of any products sold in pubs up and down the land while highlighting the discrepancy in pricing between pubs and supermarkets.

BII chief executive Neil Robertson has sympathy with that view - as well he might, being the head of a group with thousands of licensee members - but he too believes it is time to move on.

"Minimum pricing remains attractive to the licensee community but we are seeing in both Scotland and England that it is difficult both legally and conceptually because of intervention in the market," he said.

So, for now, eyes will turn towards the health lobby inspired authorities in Manchester and the North East, where various bodies are looking at the potential of introducing minimum pricing.

The Greater Manchester Public Health Network (GMPHN) is looking into the viability of a landmark bylaw that will allow the introduction of a 50p unit price in shops and pubs in the North West.

But a report into this that was due at the end of last month has already been delayed.

And Mike Jones, GMPHN programme manager, said the group is carefully looking at the government's plans to change licensing and bylaw legislation before committing itself further.

He said: "We continue to explore the possibility and carry on lobbying. We have not set a date or a timetable."

And for now it would appear that minimum pricing remains just that, a possibility with no timetable for its implementation or its complete removal from the debate around alcohol and pricing.

Minimum pricing - another year in the headlines

Throughout 2010 the debate around minimum pricing has continued to grab headlines. Here are a few key dates from the last year

  • January - Tennent's supremo Mike Lees come out in support of minimum pricing
  • March - Health groups in the North West reveal they are looking at introducing minimum pricing via a bylaw. Meanwhile in Scotland minimum pricing is voted down for the first time
  • April - Prior to the UK election the Lib Dems say they support minimum pricing in principal, but they want to be convinced it will combat irresponsible drinking
  • August - Prime Minister David Cameron indicates he supports the minimum price plans in the North West
  • September - After much debate and avoidance the SNP says its preferred minimum price would be 45p per unit
  • November - MSPs reject minimum pricing for the third time while passing a series of measures to tackle alcohol related issues in the Alcohol Bill

Related topics Legislation

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