Regulation of the price of alcohol is one of the main tools used by governments to address alcohol-related harm. This factsheet provides an overview of the main issues around alcohol pricing, with particular focus on the UK.
It starts with an overview of alcohol pricing in the UK, starting with an explanation of the determinants of the price of alcohol, before looking in detail at the price paid for different alcoholic products by different consumers in the UK, and how this has changed in recent years.
The factsheet then looks at how the price of alcohol affects both the level of consumption and the level of various harms, showing that there is a wealth of evidence indicating that cheaper alcohol leads to people drinking more and suffering greater harms.
It then turns to different policy measures that seek to influence the price of alcohol, beginning with alcohol taxes. The factsheet runs through the economic theory behind alcohol taxation. It shows that taxes are in general associated with higher prices and lower harm, though different retailers vary in the extent to which they pass through alcohol taxes. The factsheet then provides an overview of the current level and structure of UK taxes, and how this has changed over time.
Next, the factsheet discusses another prominent pricing policy – minimum unit pricing (MUP). It starts with an account of the political and legal debate around the introduction of MUP in Scotland (where legislation was passed in 2012 but is yet to come into force) and the rest of the British Isles (where the Westminster government reneged on a commitment to MUP, and other nations have explored the policy to differing extents). It then summarises the evidence on the effectiveness of minimum unit pricing.
Finally, the factsheet discusses two other pricing policies – a ban on below cost sales, which was introduced across the UK in 2014, and a ban on multi-buy sales, which came into force in Scotland in 2011.
Click on links opposite to view each section of the factsheet online, or click on the image below to download the entire factsheet as a PDF (updated March 2017):