Price controls on the cards for 2015

09 March, 2012

Price controls on alcohol are on the cards for April 2015, industry insiders believe, after the Cabinet Office gave a series of briefings on the issue to senior political journalists.

Prime minister David Cameron is in favour of a 40p-per-unit minimum price and plans to announce some form of price control in the government’s much-anticipated alcohol strategy – possibly as part of this year’s Budget statement on March 21, according to press reports.

WSTA interim chief executive Gavin Partington said: “Some form of further action on pricing from government is more on the cards now and this ties in with what we have been told – that the ban on below-cost selling defined as duty-plus-VAT was always seen by government as a first step. But I don’t think anything is inevitable.

“The industry now has the challenge to ensure that policy in this area remains evidence-based and that we don’t see the introduction of a minimum unit pricing policy which would fail to tackle alcohol misuse but would punish most ordinary consumers with high prices.” 

An industry insider told OLN: “By suggesting some form of price control system in the alcohol strategy, but with a view to consultation and implementation by 2015, it gives the government some time.

“April 2015 is the end of the duty escalator, so come 2015 the government can look at the impact of the duty escalator – how much product is going to be below 40p per unit then? It also leaves them time to look at what happens in Scotland.” 

A ban on advertising cut-price drinks deals is also in the pipeline, according to the Daily Telegraph. TV and poster ads promoting cheap alcohol outside shops would be outlawed in the move, the newspaper said.

The reports come as a study from Newcastle University suggests that a ban on pricing below the cost of VAT and duty – Cameron’s previously stated preferred option – would have little impact on shop prices, affecting less than 2% of alcohol sold on promotion.

“A minimum price of 50p per unit would impact on more than a quarter of the price discounts we identified,” said Dr Jean Adams, lecturer in public health.

The study looked at 2,000 alcohol promotions in 29 Newcastle shops.

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