Alcohol minimum unit pricing: Will dropped plans affect alcohol duty arguments?

13-Mar-2013 - Last updated on 13-Mar-2013 at 13:47 GMT

The Government is reportedly considering dropping plans to introduce a minimum unit price for alcohol

The Government is reportedly considering dropping plans for a minimum per unit price for alcohol after pressure from Cabinet Ministers who don't back the policy and concern from the Treasury about the effect it would have on revenues from alcohol duty.

In its Alcohol Strategy, published last year, the Government launched a 10-week consultation on plans to introduce minimum unit pricing (MUP) for alcohol sold in England and Wales at 45p per unit. The consultation concluded last month and the Home Office had been expected to publish its response within the next few months.

However, according to the BBC and The Telegraph, David Cameron has been forced to abandon plans amid pressure from Home Secretary Theresa May and other Cabinet Ministers.

Alcohol duty

The reports suggest concerns about the potential for a drop in revenue from the controversial alcohol duty escalator played a part in killing the policy.

Today's news has sparked outrage from Labour and the medical profession who believe a minimum price will have a positive impact on public health.

However, if reports prove correct, the ditching of the policy will also concern the hospitality industry which is lobbying for a freeze or cut in alcohol duty in next week's Budget. The Telegraph has reported the Chancellor is actually considering higher taxes on some drinks.

Pub trade associations had also hoped minimum unit pricing would level the playing field with supermarkets and retailers which pursue below-cost selling.

Speaking to BigHospitality, a Home Office spokesperson said the department was still considering its response to the consultation. "The consultation on new measures closed on 6 February. We will listen to all views and set out a response in due course."

However the spokesperson refused to rule out a separate Government decision on minimum pricing before or in the Budget. The Treasury said it did not speculate on the contents of the Chancellor's speech in advance.

Freeze

Nick Bish, chief executive of the Association of Licensed Multiple Retailers (ALMR), told BigHospitality the organisation would wait to hear the Government's official response before passing final judgement. He also called on policymakers to put more control on the location, timing and promotions associated with alcohol sales in supermarkets.

He also expressed concern at the 'direction of travel' from the Government which appeared to suggest Ministers think they cannot afford MUP or a cut in alcohol duty.

“If this turns out to be the outcome, there are still many issues to discuss," said Brigid Simmonds, chief executive of the British Beer and Pub Association (BBPA).

“We have always supported a ban on below-cost selling and a tax system that encourages lower-strength drinks. We will certainly continue to press for a freeze in beer duty in next week’s Budget.

"Tackling problem drinking should mean targeting help at those who misuse alcohol, more local community partnerships, greater education and awareness and support for pubs," she added.

When MUP was first discussed in Westminster, a possible minimum unit price of 40p was floated however the Prime Minster is thought to back a 45p price. The Scottish Government is likely to face legal challenges over its attempts to introduce a 50p price after criticism that it infringes EU competition laws.

Meanwhile, pubco Greene King last year called on the Government to increase its planned price per unit.