New year = new issues for the industry

11 January, 2008

Rebecca Evans looks at challenges facing the trade in the coming year

Prime Minister Gordon Brown has recently softened his tone on 24-hour drinking, backpedalling on previous hints that the Licensing Act was to be reviewed, according to national newspaper reports. Don't be fooled into thinking that the government has lightened up, though. The coming year is likely to be one of the toughest yet for the drinks trade, with everything from alcohol pricing and promotion to health costs and drinks labelling under the state's spotlight - and the threat of further legislation not far behind.

Once the trade has got past March's Budget - which could see a major rise in drinks duty, according to top trade figures - it will then have the government's initial thoughts on alcohol pricing and promotion, due to be released in April, to look forward to.

The discounting of alcohol - particularly in major multiples - dominated headlines throughout 2007, especially

as it formed a major part of the Competition Commission's investigation into the grocery market. In its provisional report, published in October, the CC said it believes supermarkets' practices, which include below-cost selling, offer consumers good value for money.

Growing competition

So the Big Four supermarkets - Asda, Sainsbury's, Tesco and Morrisons - go into the New Year in a buoyant mood, and it is hard to see what more the government can do on pricing, particularly with competition law in mind. It cannot set minimum pricing.

Tesco's head of BWS, Dan Jago, says December's drinks industry meeting convened by Gordon Brown "created a very strong forum and a good agenda to be carried forward. The agenda is being embraced by the drinks industry in a very mature fashion".

The broad consensus is that "the misuse of alcohol is not a retail issue, it's a broad social issue, and all parties need to be involved", Jago adds.

Independent retailers - particularly those who think of supermarkets as direct competition - are likely to welcome further investigation into supermarket pricing . Jim Helsby, owner of independent drinks shop York Beer & Wine, says: "Whatever supermarkets say, selling stuff below cost does not fall into what I would regard as responsible retailing."

Also in April, the government will roll out national ad campaigns through charity Drinkaware to try to "challenge public perceptions of drunkenness and harmful drinking", according to its alcohol strategy document, Safe . Sensible . Social.

Campaigning for change

An educational campaign on alcohol units will follow and young people will be targeted through a social marketing campaign. Local partnerships and communities will also be supported in reducing alcohol-related disorder through separate funding.

Alcohol-related harm was high on the government's agenda in 2007 - and pushed further into the headlines by a strengthened lobbying group, the Alcohol Health Alliance, which is calling for tighter controls on alcohol consumption - and will surface again in September, when results of a state review into the costs to the NHS will be published.

Also in September the government will instigate a review of the Social Responsibility Standards - a good practice document put together by industry bodies, originally published in 2005.

Drinks labelling will be the focus of another review in November, and the government says it will look at whether more legislation is needed. David Poley, chief executive of alcohol industry-funded watchdog the Portman Group, says: "The industry is already doing much of what the government is asking for, but the government wants to go further." In particular, ministers would like to see every producer include advice on daily alcohol intake, plus advice for pregnant women.

Progress across the board

The government's push has split opinion in the industry, Poley says. "There are some companies that are happy to do that, but there are others who have got reservations about it, particularly as there seems to be a discrepancy between the

chief

medical

officer and NICE over what advice to give pregnant women."

Tesco's Jago says: "There's been an enormous amount of progress on this. We've embraced the DoH recommendations with back -of -pack guidelines. Tesco was first to put units and recommended daily allowances on products, and we continue to lead on responsible retailing of alcohol."

Some industry figures are concerned at the way things are going, though. ­Nigel McNally, managing director at brewer Wells and Young's, says: "My personal view is that we're going too far on some of these things and this is more of the nanny state.

"People are more aware of the issues associated with alcohol, and everybody is saying drink in moderation. Again, my personal view is that there is enough labelling already in existence. Pretty much all the manufacturers, brewers and alcohol producers have put details about drinking sensibly on their ­products."

Poley predicts

the government will look at how thoroughly producers have implemented its guidelines on labelling - including pregnancy advice and daily unit information - and may order a review, depending on its findings.

The threat of further legislation is real, Poley believes : "Certainly, the government is making out that if there's not sufficiently wide implementation of its preferred labelling scheme then it will consult on legislation."

All of the group's members - which include drinks giants such as Diageo and Scottish & Newcastle - are unit labelling their drinks so consumers know exactly how much alcohol they are drinking.

While the outcome of the various government reviews can only be speculated on, the recent change of tone from Number 10 on the Licensing Act could be a sign of a more practical, evidence-based approach to alcohol issues, according to the Wine & Spirit Trade Association.

Chief executive Jeremy Beadles says: "If current indications are to be believed, Gordon Brown may decide not to launch a complete overhaul of the new Licensing Regime. If this is correct, it may signal a slightly more pragmatic and encouraging attitude in government that will worry less about responding to headlines and more about ensuring policies are based on facts." A hope to hold on to throughout 2008.




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