A view on minimum pricing

As retailers we have listened attentively and respectfully to many quarters, including the Scottish Government, telling us that we should be welcoming the Minimum Pricing Bill with open arms. It will, so the argument runs, create a more level playing field between the large multiples who can heavily discount alcoholic products to a level with which the independent and smaller retailers simply cannot compete.

However, experience and a continual raft of Government intervention in the retail market – some welcome, some less so – has taught us that more often than not the intervention always punishes the retailer, usually juvenilises the consumer and rarely places any responsibility on the individual.

The worst offender of all is legislation designed to ‘show that Government is acting’ and so disproportionate and regressive it uses a sledgehammer to crack a walnut, which I am afraid the Minimum Pricing Bill qualifies for with honours. It is a policy not only so broad-brush as to penalise the moderate and low income drinker, but sufficiently light on empirical evidence as to call into question the impact it will have on the addicted hazardous drinker or the affluent harmful drinker happy to pay the extra few pounds or move to online bulk buying.

Indeed, if there is such an irrefutable causal link between price, consumption and harm then why are there so many exceptions to this general rule? Why does the Scottish Health Survey tell us that the cost of alcohol misuse increased by over £1bn between 2002 and 2007 yet between 2003 and 2009 the average weekly consumption for both men and women declined? Why do Scots continue to consume nearly a quarter more alcohol than those South of the Border when the relative cost of alcohol is cheaper in England than it is in Scotland?

For retailers, who are the point of contact with the consumers on a daily basis, other intervening variables such as wealth, addiction and culture all seem to play an important role on an individual’s propensity to consume. Which is why SGF has argued that a targeted package of measures which includes educational programmes, and projects like the Fife Alcohol Partnership Project, are fundamental in teaching Scots to respect alcohol and to consume it responsibly.

Frankly, any policy which seeks to modify behaviour through price changes alone and is happy to abdicate individuals from any sense of responsibility about how much they consume is clearly the wrong answer to a serious problem. At the very least any pricing policy should be targeted, proportionate and avoid being regressive. Minimum pricing satisfies none of these criteria.

It also fails, unfortunately, to deal with the price of alcohol on a UK-wide basis which is a major flaw when the Scottish Government cannot stop consumers from bulk buying their alcohol at lower cost from England and having it delivered to their door.

Indeed, some of the larger multiples have already proven how easy it is for them to circumvent the will of the 2010 Alcohol Act by advertising that they can still offer multi-buy deals, illegal in Scotland, by delivering them straight from a warehouse in England to the consumer’s door.

However, this should come has no surprise. With a 55 percent increase in online alcohol sales between April 2010 and April 2011 alone, it is clear that consumers are well-versed in online shopping and it is therefore likely that instead of accepting higher alcohol prices through minimum pricing, more affluent – and higher consuming – Scots will simply circumvent the Scottish Government’s Maginot Line and purchase more of their alcohol from down south. 

Which is why, when we as small retailers are told that we should welcome minimum pricing with open arms it is difficult not to be at least a little incredulous. Any policy which is lacking a robust evidence base, is likely to be illegal, and will drive more sales online away from smaller retailers and into the larger multiples is not one which we will be welcoming anytime soon.