Retailers will be banned from selling alcohol below the rate of duty + VAT - but health lobby dismisses change as cosmetic

To tackle the issue of cheap alcohol, the government has announced it intends to introduce a new proposal which would prevent retailers from selling a 1 litre bottle of vodka (37.5% abv) for less than £10.71 and a 440ml can of lager (4.2 % abv) for less than £0.38.

The move was described as an important first step in delivering the Coalition Government’s commitment to ban the sale of alcohol below cost. However, the announcement from the Home Office was greeted with a distinct lack of enthusiasm by the health and alcohol control lobby, which said that the measure would have no significant impact on levels of alcohol consumption or harm as very little alcohol was sold below the proposed new legal minimum in any case. Coverage of the issue was muddled by some commentators and the media, confusing the Government’s proposal with minimum pricing of alcohol, for which the health lobby has been campaigning but which is actually a different concept from the one the Government has in mind.

Announcing the initiative, James Brokenshire Home Office Minister for Crime Prevention, said:

‘We know that pricing controls can help reduce alcohol-related violent crime and this is a crucial step in tackling the availability of cheap alcohol. In nearly half of all violent incidents the offender is believed to be under the influence of alcohol. That’s why we believe it is right to tackle the worst instances of deep discounting. By introducing this new measure we are sending a clear message that the government will not stand by and let drink be sold so cheaply that it leads to a greater risk of health harms or drunken violence.’

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If the Coalition expected to win praise for tackling the alcohol price issue it was rapidly disillusioned by the chorus of disapproval that greeted the Home Offi ce announcement. Indeed, the Coalition’s main achievement, an unlikely one, was to unite the health lobby with some important sections of the alcohol industry in attacking its proposals.

For Alcohol Concern, Don Shenker said that the Coalition’s plans would “hardly touch the sides in dealing with binge drinking and alcohol related harms”. He said that the price of the vast majority of drinks would not be affected and the threshold was not high enough to deter those who use cheap drinks to get drunk. There would need to be a minimum price of at least 40 pence per unit to see a drop in alcohol-related crime, health harms and deaths. “Once again,” Don Shenker added, “the supermarkets have won the day.”

Sir Ian Gilmore, Chair of the Alcohol Health Alliance and former President of the Royal College of Physicians, said that while he was pleased to see that the government accepts cheap drink is the main driver of the health harm we’re seeing, the proposed price floor would have a negligible impact. It equated to just 21p per unit of beer. Research conducted by the School of Health and Health Related Research found that if the minimum price was set higher, at 50p per unit, it would reduce hospital admissions by approximately 100,000 each year with total cost savings for England of £7.4 billion over ten years.

Sir Ian said:

“Whilst today’s announcement is a step in the right direction, it is a tiny one. It will impact on a small fraction of special offers and will have no meaningful impact on the health consequences of alcohol misuse.”

The strongest reaction, however, came from the Association of Licensed Multiple Retailers, the national trade body representing pubs and bars. The Association appeared to see no merit in the Coalition’s proposals at all, and it warned that “failure to tackle irresponsible retailing by supermarkets would result in further harm to the nation’s pubs and bars as people turn away from drinking in a social and responsible environment in favour of cheaper drinking at home.

Nick Bish, ALMR Chief Executive said:

“Today’s announcement is a fudged compromise – a ban based on duty plus VAT fails to deliver the very clear commitments the Government gave that they would ban below-cost selling. It will make no difference to pocket money prices on the high street nor the irresponsible retailing practices of Britain’s supermarkets. Actually, today’s announcement will make matters worse because it effectively legitimises the status quo and will see the price differential between pub and supermarket widen.”

The Association highlighted statements made by the Prime Minister, David Cameron, in interviews last summer where he pledged that his government would go after irresponsible promotions such as “20 Stella for £5” and “end deep discounting”. Today’s announcement will leave both untouched.

Nick Bish went on:

“If the Prime Minister is serious about tackling this social menace, then we need a package of measures to support the duty+VAT ban. All pubs and bars are prevented by law from offering the kind of discounts or special offers that have become almost routine in the off-trade. We simply want a level playing fi eld and the ban on irresponsible promotions extended to anyone who sells alcohol. That would make a material difference to pricing and commercial behaviour and the Prime Minister has a unique opportunity to deliver that through the Bill reforming the Licensing Act which is currently before Parliament. Ministers have ducked a ban on belowcost selling; for the sake of our pubs they must not duck this”.