by Tim Atkin

Will this end cheap alcohol deals?

It was a neat, if unfortunate coincidence that on the day the Scottish government published its alcohol bill, a small brewery in Fraserburgh released a head banger beer called Tactical Nuclear Penguin. BrewDog claims that its imperial stout is aimed at connoisseurs and that the £30 price tag will deter people who just want to get drunk quickly, but it was the beer’s alcohol content of 32% that garnered the headlines. It’s hard to disagree with Jack Law, chief executive of Alcohol Focus Scotland, that the stunt was a piece of “childlike attention seeking”.

The release of the world’s highest strength beer added another (small) dimension to the debate about alcohol in Scotland. If it’s true, as the bill claimed, that the financial cost to the Scottish economy from excessive drinking is £2.25bn, you can’t blame the SNP government for attempting to do something about it. Let’s face it, they are being considerably more proactive on this issue than Labour south of the border.

It’s worth taking a step back here for a second. The Scottish alcohol bill isn’t law yet, and is unlikely to become so in full, given the opposition of Labour, Conservative and Liberal Democrat MSPs. Even if it does progress, a consultation exercise is currently under way, with a closing date of 20th January 2010 for submissions. MSPs aren’t expected to vote on the bill for months, possibly until after the General Election.

The bill’s main proposals are worth listing: a minimum price of 40p per 100ml of alcohol (the equivalent of £11.20 for a bottle of whisky and £3.90 for a bottle of wine at 13% alcohol), a ban on drink promotions, raising the age at which consumers are allowed to buy drink from 18 to 21 and the introduction of a “social responsibility fee” for retailers who sell alcohol, whatever that might be.

The two sides of the alcohol debate have supported and attacked the bill in equal measure. Alcohol Concern hailed it as “a sensible and effective measure to cut alcohol harm in Scotland and to start to turn the tide of a heavy drinking culture across the UK”. The Royal College of Physicians went even further: “The Scottish government, through laying out a comprehensive package of measures to tackle alcohol-related harm has shown itself to be an international leader in efforts to protect public health”.

The anti-lobby, led by the Wine and Spirit Trade Association (WSTA) but supported by retailers, the off-trade and (in part) the Scotch Whisky Association (SWA), accused the Scottish government of “punishing consumers and businesses….whilst doing little to tackle the root causes of alcohol misuse”.

The WSTA’s counter proposal is effectively more of the same: “…to work with the Scottish government and other stakeholders to develop policies that address the problem of alcohol misuse, including rigorous enforcement of existing legislation, systematic education in schools and widespread introduction of Community Alcohol Partnerships proven to deliver results”.

Where do I stand on this? Closer to the SWA than the WSTA is the answer. I’m not in favour of a minimum price for alcohol, largely because it would establish a precedent for governments in other countries to use it as a non-tariff barrier. To take only one example, South Korea could introduce a minimum price for spirits over 30% alcohol, which would affect Scotch whisky in its fifth largest market but leave local spirits (at 25% alcohol) untouched, conferring a competitive advantage on the latter.

On the other hand, I do support the Scottish government’s desire to ban the use of alcohol as a loss leader to drive footfall, a move also favoured by the SWA, but not the WSTA. The whole area of alcohol promotion needs to be examined, as much for the damaging effect it has on the viability of the booze industry as on public consumption. The current level of promotions, particularly in supermarkets, is unsustainable in the medium term for beer, wines and spirits producers.

The central issue here — and it’s a contentious one — is the extent to which low prices encourage consumers to drink more alcohol. Alcohol Concern thinks they have a “massive effect on drinking levels”, while the Scottish Retail Consortium says there is “no simple link between price and irresponsible consumption”. Gavin Partington of the WSTA points out that overall alcohol consumption fell by over 9% in Scotland between 2003 and 2008. He also believes that “the idea of personal responsibility is missing from the debate. We have to educate people to drink sensibly.”

Both sides have a point, but one way or another the price of booze has to rise. I’m not just talking about the VAT increase later this month or the proposed duty hike in the next budget, both of which should be passed on to consumers. I’m talking about a true reflection of what it costs to produce, package, ship and sell alcohol safely and at a price that enables everyone in the supply chain to make a profit. Even with some of the most punitive alcohol taxation in Europe, alcohol is too cheap in the UK. The Scottish government deserves praise for trying to do something about it.

Originally published in Off Licence News