bottles

Minimum pricing

30 May 2012

The Scotch Whisky Association believes Minimum Unit Pricing of alcohol is illegal, will be ineffective in tackling misuse and will damage the Scotch Whisky industry.

It is opposed to the Scottish Government's Minimum Pricing of Alcohol (Scotland) Bill which has been passed by the Scottish Parliament and is currently awaiting Royal Assent.

The Association would also like the UK Government reconsider its plans to push ahead with this misguided policy.

The Scotch Whisky Association is opposed to minimum pricing because:

  • Minimum pricing will not be effective in tackling alcohol harm. Research for the Scottish Government shows it will not reduce the number of drinkers drinking at hazardous levels.
  • Minimum pricing was ruled illegal as a barrier to trade by the ECJ more than 30 years ago. The Bill in its entirety should be notified to the European Commission.  
  • Minimum pricing will damage the Scotch Whisky industry. If the Government secured a public health exemption to trade rules, it would establish, for the first time, a precedent of 'health justified' barriers to trade that would be used against Scotch Whisky overseas, undermining decades of work by the industry against trade barriers around the world.

Minimum pricing - the evidence

There is no strong evidence as to the effectiveness of minimum pricing in reducing alcohol-related harm. Minimum pricing is a regressive policy that will hit responsible drinkers and, in particular, those on lower incomes at a time when household budgets are under extreme pressure.

The updated Sheffield modelling  ontinues to show the number of hazardous and harmful drinkers would not fall with the introduction of minimum pricing. It shows a reduced impact compared to the previous reports and estimates that on average, a harmful drinker would have to spend only £1.88 extra per week.

The volume of pure alcohol sales in Scotland has been stable over the past number of years. Average alcohol prices are broadly the same between Scotland and England, although they were slightly higher in Scotland in 2010 compared to England, yet consumption is greater in Scotland. In England there has been a reduction in consumption, but some indicators of harm, such as alcohol-related hospital admissions, continue to increase. This raises doubts over claims that higher prices will address alcohol misuse in Scotland.

There is a problem with alcohol misuse in Scotland, however recent statistics show that alcohol-related health harms are decreasing. Hospital discharges and alcohol-related deaths have shown a decline in recent years . Deaths from alcoholic liver disease have also been declining since 2006.

This suggests the message of responsible drinking may be getting through. This improvement is witnessed before measures that have been introduced under the Alcohol Etc (Scotland) Act have taken effect. If we are to improve attitudes to alcohol in Scotland and excessive drinking, it is important that we recognise these improvements rather than reinforce the Scottish stereotype.

Minimum pricing is likely to be illegal

Minimum pricing on spirits has been ruled illegal by the European Court of Justice as a barrier to trade. The Court has said countries can take measures to tackle alcohol related-harm but should use other less trade restrictive means, including tax or duty.

To override this legal barrier, a government would need to justify a 'public health' exemption - the harm being so great that rules governing international trade could be overridden.  This exemption only applies where other less trade restrictive measures are not available.

Unintended consequences

Claims that as a 'premium product' Scotch has nothing to fear are wrong. A significant proportion (25-30%) of Scotch Whisky sales in Scotland could be hit, harming producers of 'own label' brands. This would affect the Scottish economy and many economically disadvantaged areas, which are centres of Scotch Whisky production, would be especially badly hit.

A minimum price for alcohol in Scotland is likely to lead to copycat measures overseas and dampen Scotch Whisky sales, threatening the industry's £4.23billion a year exports.

Scotch Whisky accounts for around 80% of Scottish food and drink exports. It is Scotland's largest single product export industry.

If international trade rules are overridden by the Scottish Government, Scotch Whisky will have no protection against discriminatory measures introduced against it by governments abroad. Spuriously based 'health justified' trade barriers will undermine decades of improving market access for Scotch, something supported by both the Scottish and UK Governments. Falling sales would damage the wider Scottish economy.  

Minimum pricing could cost the industry half a billion pounds in exports if other countries follow Scotland's lead.

Alternatives to minimum pricing

A legal alternative to minimum pricing would be to introduce a floor price for alcoholic drinks based on duty and VAT, and in collaboration with the UK Government remove the current tax differentials between different alcohol beverages.

Conclusion

Tackle the problem of misuse - but not with minimum pricing.

The alcohol industry has no problem with a reduction in excessive and harmful drinking leading to a reduction in consumption. Scotland's drinking culture needs to change to one that is healthier, positive and responsible. The alcohol industry wants to ensure that those drinking too much increasingly recognise that they are not the norm. Many industry members currently work with the Scottish Government to help achieve this.