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Minimum alcohol price blow for Scottish retailers

14 May
15:18 2012

Almost three-quarters of off-trade drink prices are set to rise in Scotland if proposals for a minimum price of 50p per unit of alcohol are imposed by the government north of the border.

Scottish health secretary Nicola Sturgeon surprised the retail and booze trades today (Monday) when she said the “preferred” minimum price of alcohol would be 50p, rather than the 45p per unit originally expected.

An ongoing public consultation in England and Wales suggests a minimum price of 40p per unit.

“Since 45p was first proposed as the minimum price 18 months ago, we have seen inflation of around 5%,” said Sturgeon.  She said the minimum price of 50p took inflation into account and would achieve a similar level of public health benefits first perceived in 2010.

The Alcohol Minimum Pricing (Scotland) Bill is shortly to start the final stage of the legislative process through the Scottish Parliament.

The Scottish government claims the 50p minimum price would have the greatest impact on the economy end of the market and on strong beers and ciders, while not directly increasing the prices of the big booze brands.

For instance, some supermarket own-label strong ciders will more than double in price, while more than £1 per four-pack will be added to the prices of super strength lagers. Economy spirits will also be hit hard.

A 50p per unit price would mean the average bottle of wine would cost £4.69, but most big brands would not be affected. It is not clear whether brand owners would want to increase their prices to maintain a price premium.

Gavin Partington, interim chief executive at the WSTA (Wine and Spirit Trade Association), said: “The [Scottish] government’s own report shows that 73% of all alcohol prices in the off-trade would rise overnight as a result of a 50p minimum unit price.”

John Drummond, chief executive at the Scottish Grocers’ Federation, said: “Minimum pricing will drive up illicit, cross-border and internet sales to the detriment of indigenous Scottish retailers, while any profit arising from increased prices would be more than offset by falling sales. If all of this wasn’t bad enough, the legality of the measure remains uncertain.”

Source: Independent Retail News

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