Lords heap pressure on government over minimum pricing and tax reforms

06 March, 2015

A House of Lords committee has put minimum pricing back on the agenda, pressuring the UK government to fulfill its 2012 pledge to introduce the measure. 

In a report published today, a high profile panel of peers have reviewed the European Union’s alcohol strategy and ruled member states must do more to tackle problem areas. 

The document makes a raft of recommendations including the tightening of existing advertising codes and more detailed labeling on products. 

More controversially, it also reignites the debate over minimum pricing, urging the UK government not to abandon its 2012 alcohol strategy promise to bring in minimum pricing and “consult on the level in the coming months with a view to introducing legislation as soon as possible”.

Acknowledging on-going concerns over the legality of minimum pricing, the report said: “If the court rules that minimum unit pricing is lawful under EU law, we recommend that the UK government monitor the effects of its introduction in Scotland. If minimum unit pricing does appear to be successful in health benefits to the heaviest drinkers, the government should implement the undertaking it gave in 2012 to introduce it in England and Wales.”

Chairman of the committee, Baroness Prashar, said: “During our inquiry we heard from manufacturers, retailers and advertisers about the voluntary initiatives they have developed to tackle the harm caused by alcohol abuse. Voluntary action alone is not enough. It must be backed by legislation at EU level, and industry should play a constructive role in bringing this about. 

“Minimum unit pricing is a highly controversial topic, views are sharply divided, and no member state currently has a law. In 2012 the Scottish government, however, decided to introduce minimum unit pricing, and the UK government undertook to do the same. Our view is that if it proves successful in bringing health benefits to the heaviest drinkers in Scotland, the UK government should honour the commitment it gave in 2012 and follow suit.”

The committee also recommended over-hauling the taxation system to encourage producers to lower the alcoholic strength of products. 

It said: “EU rules on the structure of alcohol taxation should be reviewed to allow the implementation of variable tax rates for wines and ciders in line with alcoholic strength, and to give an incentive to the manufacture of lower strength beers.”

Miles Beale, chief executive of the Wine & Spirit Trade Association, said: “The report fails fundamentally to understand or to recognise that wine is unique in having its alcohol content defined by the climate in its country of origin. To introduce an excise regime based on alcoholic strength would penalise wines from warmer climates, which produce higher strength wines, and would potentially be a barrier to trade, breaching EU and WTO rules.  

He added: “While the WSTA is strongly opposed to changing the single market’s current duty system for wine, which stands no chance of being agreed in Europe - a point conceded by the report - the WSTA has long called for changes to the definitions which would allow for lower or reduced alcohol wine below 8.5%. This is something the committee’s report fails to recommend.”

Brigid Simmonds, chief executive at the British Beer and Pub Association, said: “EU taxation rules should not hamper member states wishing to encourage consumers to towards lower-strength drinks, and we welcome the Committee’s focus on this.  We would support a review of the rules to allow for greater flexibility for member states to reduce taxation on lower-strength products, such as beer. 

“On labeling, we believe that voluntary commitments have delivered, as the brewing industry already has a good track record.  Ninety per cent of product labels already include a pregnancy warning, and the vast majority also give information on alcohol unit labeling and UK Government lower-risk drinking guidelines.”

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