Published on November 15th, 2011 | by Dean Carr
Minimum retail price of alcoholic drinks to be set for England and Wales
As part of a coalition agreement, a ban of the sale of alcohol below a minimum price will be introduced in England and Wales from 6 April 2012. It has been predicted by the Home Office that a resulting shift in consumer patterns will prevent around 7,000 alcohol-related crimes a year. Under the conditions of the Act, shops and bars will not be able to sell drinks for less than the tax paid on them, capping minimum retail prices at 21p per unit of beer and 28p per unit of spirits. On the high street, this will translate as 38p for can of weak lager and £10.71 for a litre of vodka.
The legislative change is designed to prevent retailers offering heavily discounted alcoholic drinks as a “loss-leader” marketing device, carefully targeting the cut-price beverages that David Cameron has publicly highlighted as a root cause of alcohol-related crime and health concerns. As critics have already pointed out, the retail price of most drinks will remain unaffected.
In Scotland, a broader solution is currently under review, with a bill reintroduced by MSPs aiming to target the minimum retail price of every alcoholic drink. The price setting formula embodied within the bill stipulates that minimum price will be calculated per unit of alcohol, resulting in minimum retail prices across the marketing spectrum, for “budget” and “luxury” brands alike:
The minimum price of alcohol is to be calculated according to the following formula—
MPU x S x V x 100
MPU is the minimum price per unit,
S is the strength of the alcohol, and
V is the volume of the alcohol in litres.
For more information on the Scottish Alcohol Pricing Bill, click here.