Down, but far from out

08 August, 2008

Industry needs to unite to recover from the blow the government delivered with its proposals for alcohol reforms, says Jeremy Beadles, head of the WSTA

The sight of holiday-bound Labour MPs

who will have to ponder

the future of their troubled leader

won't be a pleasant one for Gordon Brown. There's nothing quite like the prospect of losing your seat to prompt

a MP to assess what to do.

Now the time is right for the drinks industry to assess the risks it faces and many of

these are driven by the politicians now mulling their own futures.

It's not as if businesses don't have enough to cope with , such as the credit crunch

putting the squeeze on consumer spending. But the truth is that the

industry faces another challenge from the architects of public policy, which seriously threatens to overshadow the impact of a downturn in consumer spending.

The recently announced Department of Health alcohol consultation, taken together with the Scottish

Executive's wide-ranging proposals to tackle alcohol misuse, have crystallised the threats on the horizon. This gives

us the opportunity to really analyse the risks

and gauge the likelihood of imposed policy solutions.

Some of the highest risks will come as no surprise.

The tax escalator - excise duty to rise by inflation, plus 2%, for the next four years - was outlined in the Budget. We continue to fight to persuade the Chancellor to rethink, but all the signs seem to show that the Treasury will want to cling on to these measures .

Proposals for minimum pricing also pose a

threat. The Scottish

Executive has made the first move, mooting the notion of a 35p minimum price per alcohol unit, with ministers able to raise the price

thereafter. Little mention so far of the extra revenue this might produce for

the Executive from the VAT arising from higher prices, but you can be sure

that Westminster is watching

this one.

Plans to ban both promotions and all promotional materials are already high on the agenda north of the border, and it's

believed there is a

risk that the rest of the UK will

follow suit. How will any new brands enter the market if they are unable to promote themselves to consumers - even on the quality of the product?

In Scotland, restrictions on retail siting of alcohol have already become law and come into force, and more

restraints such as

separate checkouts are planned. Scottish ministers have made it clear that moves to restrict where shops place their product are a central plank of their alcohol strategy proposals.

No similar proposals on siting have

come from Westminster, but they

were raised for the first time in the

DoH's consultation.

Spotlight on labelling

We

believe

more action on unit labelling is likely. While we dispute the DoH's assessment of the industry's performance in meeting the terms of

voluntary agreements, there is

no doubt that government officials are

considering legislating for mandatory enforcement.

This goes hand in hand with the prospect of some sort of mandatory industry codes of practice, following the recent KPMG report. The whole tenor of this report and the terms of the DoH's consultation document point to the growing likelihood that some form of mandatory code, perhaps policed by local authorities as part of the licensing regime, will be imposed on the alcohol industry.

There are other risks facing us

but judged less of a threat , either because they are less likely or would have less direct impact on our operations - restricting advertising, raising the age for buying alcohol, reversing the 24-hour licensing laws and reducing the drink-drive limit.

All this has to be set in the context of what remains a

threat of continued government criticism and scrutiny of the drinks industry. Recent weeks may have seen a switch of media attention to the threat posed by knife crime in our inner cities, but the public concern about binge-drinking and associated anti social behaviour will never be far from the front pages.

These risks must be set against a political backdrop in which ministers fear public reaction to tax increases and anything which makes the impact of the credit squeeze on household budgets worse. Yet with David Cameron preparing his troops for power there is always the possibility that the Tories will be tempted into populist measures on regulation of alcohol, which they will be obliged to deliver in government.

Separately, these policy developments would all have major impacts on businesses; but combined they amount to a radically different marketplace.

More depressingly, these measures are a missed opportunity for the governments north and south of the border to really tackle alcohol-related harm. Whatever the government says, these actions will demonise alcohol and penalise the majority of consumers.

Working as one

The WSTA is focused on the risks and fighting to make the industry case in the corridors of power and the media. Those who are concerned that we are not doing enough should realise that to spell out every detail

of our strategy and the work

we do would undermine our approach. No campaigner tells the opposition what they are planning to do, but I can assure members there is a strategy and it is

vital that the

industry

unites.

We are also working hard to encourage support among

our real allies - the millions of consumers who buy our members' products and enjoy a responsible drink. Let's all appreciate the risks and do our best to ensure we reduce the threats facing the industry. If you are not involved and would like to be, at either a national or local level, then let us know.




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