New report attacks minimum unit pricing

18 December, 2012

Government plans to slap a 45p minimum unit price on alcohol will cost drinkers an extra £659million per year and almost half will come from the poorest households, new research has claimed.

SABMiller commissioned the Centre for Economics and Business Research (CEBR) to examine potential effects of the scheme, and the centre called it a “poorly targeted measure”.

It found the poorest 20% of households would have to pay an extra £318 million per year – nearly half the total estimated rise – and the richest 10% would pay nothing.

The report’s author Scott Corfe, senior economist at CEBR, said: “Our analysis shows that minimum unit pricing is not a targeted measure and would hit responsible drinkers in certain parts of society much harder than others.”

SABMiller's senior vice president of industry affairs, Mike Short, added: “Minimum pricing is a poor piece of policy that will do little to address the damage caused by alcohol misuse and much to exacerbate the financial challenge facing moderate drinkers on lower incomes.

“We absolutely believe that action needs to be taken to address alcohol related harm but that would be best achieved through targeted policies which would genuinely help harmful and hazardous drinkers.”

The report found under 30s and working parents would be hit the hardest and that minimum unit pricing would disproportionately affect different regions.

Corfe said: “Those on the lowest incomes will be particularly hard-hit financially, bearing the brunt of the measure. This is despite the fact that health surveys show that those on higher incomes are more likely to drink to hazardous levels.

“Yorkshire & the Humber will be the region most financially hit by the measure, reflecting the fact that incomes in the region are relatively low and households are more likely to purchase cheaper alcohol products. The north west and Wales will also be affected significantly.”

Meanwhile Carlsberg joined SABMiller in attacking minimum unit pricing.

Chief executive Jorgen Buhl Rasmussen said: “We’re a little surprised about the UK proposal because the proposal in Scotland has been taken to court in the EU as to whether it would be in line with the free market principles.

“It could take between six and 18 months before there’s a decision so we didn’t really expect England to come out with a proposal at this time.

“But we were also surprised because we have so much evidence across Europe that price does not change or reduce abuse. What changes and reduces abuse would be education and information.

“A minimum alcohol price may stop you, me and some other people buying so much but you and me and the other people who don’t abuse alcohol are not the issue. The issue is people abusing alcohol and they don’t stop buying because you have a minimum price of 45p or 50p.”

René Hooft Graaflan, chief financial officerat Heineken, also spoke out against the scheme, adding: “I don’t think in general the abuse problem in the UK is much bigger than some other countries.”

A Home Office spokesperson said: “We are currently consulting on this proposal and responses will be studied. No conclusions have been reached.”

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