The news that Prime Minister Gordon Brown has rejected calls by chief medical officer Sir Liam Donaldson to introduce minimum pricing for alcohol in England and Wales might seem like a setback to some convenience retailers.
After all, such a policy would have put an end to the deep discounts currently on offer in the major multiples, creating that ever-elusive level playing field? As ever, though, it’s not quite so straightforward.
The suggested 50p per unit minimum price for the off-trade would have set the minimum price of a bottle of wine at £4.50 and sounded the death-knell for the kind of ‘three for £10 offers’ that most convenience retailers are still able to put on. Such offers form a vital component of their BWS offer, which in turn is a key component of any convenience outlet, typically taking up to 20% of turnover.
In Scotland, where minimum pricing is still on the agenda, brewer SAB Miller recently conducted research showing the policy would do little to stop problem drinking, with consumption among harmful drinkers cut by only 2.3%. Heavy drinkers, it found, were least responsive to price increases.
All of which serves to underline the arguments by the likes of the Association of Convenience Stores that minimum pricing is a blunt instrument that would punish responsible retailers and consumers without effectively targeting the minority of drinkers who cause harm. Rather than taking the sledgehammer approach of minimum pricing, governments both north and south of the border should be making proper use of existing laws to tackle the problem.
While minimum pricing may have been kicked into touch in England and Wales, unfortunately the policy of using price to target problem drinking has not. Next month’s Budget is set to impose a 2% above inflation duty increase on alcohol, a measure that will put further strain on the ability of c-stores to provide the kind of offers needed to pull in customers.
In this difficult economic environment, it’s time the Government heeded the industry’s calls, abandoned this year’s tax escalator and finally gave hard-pressed businesses a break.
David Shrimpton
Editor
Independent Retail News
david.shrimpton@metropolis.co.uk
