Mark Hunter: moderation is key to progress

By Mark Hunter, Molson Coors chief executive

- Last updated on GMT

Related tags: Alcohol, Beer, Alcoholic beverage

Hunter: Government needs a cohesive approach to alcohol
Hunter: Government needs a cohesive approach to alcohol
Perhaps the time has come for an alcohol minister, argues Molson Coors chief executive Mark Hunter. As the chief executive of Britain's largest...

Perhaps the time has come for an alcohol minister, argues Molson Coors chief executive Mark Hunter.

As the chief executive of Britain's largest brewer, I have clear accountabilities to beer drinkers, to my employees and shareholders, to the government and, ultimately, to my conscience, both as a father of two teenagers and as the leader of a business that produces beers that are designed to be enjoyed by a majority, but are, on occasions, abused by a minority.

Let's be clear. It is not in my company's interests to see our brands mistreated.

I believe a culture of moderation is the only credible route to improving Britain's relationship with alcohol and to preserving Britons' right to enjoy the simple pleasure of a beer with friends and to building a sustainable brewing industry that delivers secure jobs and wealth for the communities in which we operate.

As such, I take a whole view on alcohol responsibility and our fiscal duties as a manufacturing business, and have to make tough decisions. I have said no to short-term commercial opportunities that threaten the long-term health of our brands.

I have said yes to long-term initiatives, such as the Responsibility Deal, that might impact on near-term value, but promise to address cultural challenges around alcohol in the UK.

Disjointed approach

I can't afford a disjointed approach on alcohol and am baffled when I see policy decisions, such as the 7.2% duty rise on beer, that seem entirely disconnected from the alcohol responsibility and economic growth strategies emerging from Government.

Almost a million people in the UK rely on the beer and pub trade for employment, yet the continued persecution of the sector — tax up more than 60% since 1995 — means 2010's 13,000 job losses and 1,300 pub closures will remain an annual headline, despite evidence that overall tax receipts from beer are down due to a loss of beer sales.

Beer tax in Britain is eight times higher than France, 10 times higher than Spain and 11 times higher than Germany: why?

As a consequence, the most dramatic change in UK drinking behaviour over the past 30 years has been the systematic decline of beer from a 70% share of alcohol to 40%, while higher strength drinks have prospered supported by one of the most lenient tax environments, relative to beer, in the world (spirits tax up circa 15% since 1995).

Culture of moderation

So how do we plot a course into the future to build a culture of moderation and respect for alcohol? I see three clear pillars underpinning a cohesive national alcohol strategy: responsible marketing, education and price & taxation.

The UK's self-regulation framework for alcohol marketing works effectively through the Portman Group, the Committee of Advertising Practice codes and copy clearance.

We recognise these could still be connected more effectively to produce a total approach to responsible marketing and are addressing this through the Responsibility Deal.

More aligned Government thinking would facilitate and encourage promotion of lower alcohol products. Currently, advertising codes prohibit making a virtue of alcoholic strength.

An unintended consequence is that brand owners are prohibited from advertising reduced strength, undermining Government intent to support — by way of reduced tax — the promotion of low-strength beer. Where is the joined up thinking?

The Drinkaware Trust is the focus for alcohol education and consumer information, yet receives no Government funding, despite Treasury tax receipts of over £15bn from alcohol. Driving culture change requires a sustained investment in education.

I believe a commitment to invest 0.1% of alcohol tax revenues would enable long-term planning designed to change irresponsible consumption, starting with education in schools that teaches the benefits of moderate alcohol consumption and the dangers of over consumption.

Below-cost ban

Cohesive thinking across price and taxation is the third, critical, pillar. A ban on below-cost selling that includes the cost of production — not the recently announced ban on 'below-tax selling' — is urgently required, with proper consultation on the potential for minimum pricing to follow.

In the meantime, I believe a ban on making a virtue out of price in alcohol advertising would defuse competitive tension without undermining retailers' right to promote alcohol prices in or around their premises.

Finally, I expect to see a 'whole view' on the excise tax framework. Only genuine reform will re-establish a sensible tax differential between beer and higher strength drinks and level the duty playing field between substitutional drinks like beer and cider.

I cannot imagine the UK Treasury ever intended that local cask beers, like Sharp's Doom Bar, should be taxed at twice the rate per pint paid by the UK's largest cider brand (25 times the size of Doom Bar) and I cannot understand why they would allow such an outrageous anomaly to continue unchecked.

The Big Society needs a big idea to rebuild respect for alcohol and shape a culture of moderation over the medium to long term. Perhaps the time is right for the Government to appoint a minister to oversee a national alcohol strategy.

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