Page last updated at 11:40 GMT, Thursday, 12 March 2009

Raising alcohol price 'win-win'

Drinks
The professor said the drinks industry and consumers could benefit

Higher alcohol prices could improve health and also benefit retailers, according to an Aberdeen academic.

Professor Anne Ludbrook said the Scottish Government's minimum alcohol pricing plan could be a "win-win" for consumers and the industry.

She calculated that even if consumption fell by as much as 30% the industry's revenue could rise.

Revenue could go up by as much as 68% because most of the price increase would be retained by the industry.

Scottish Health Secretary Nicola Sturgeon said the study showed improving public health and sustaining a successful alcohol industry were not mutually exclusive.

But whisky producers said the figures "defied belief", while warning a minimum pricing scheme could breach international trade law.

There is strong evidence that higher prices would reduce alcohol consumption
Professor Anne Ludbrook
Aberdeen University
The Scottish Government's alcohol measures - some of which are fiercely opposed by the drinks and retail industry - also include a ban on cut-price offers, raising the minimum age for off-sales purchases to 21, and a "social responsibility fee" for some retailers.

The proposed minimum price level has yet to be fixed but, based on an example of 40p per unit of alcohol in the government's consultation, a 13% bottle of wine would cost at least 3.90.

Prof Ludbrook's research calculated that, even if the minimum price was set at 30p, the drinks industry would see a 68% rise in revenue, while selling 30% less of heavily-discounted products.

She said that if minimum price resulted in a 30% drop in sales, the industry would still gain as it is keeping more of the money from products which are no longer discounted.

Prof Ludbrook said: "There is strong evidence that higher prices would reduce alcohol consumption.

"Minimum pricing is one means of raising prices and my analysis has shown that this could be more beneficial to the industry than the traditional approach of increasing duty."

Hitting back, the Scotch Whisky Association said a 30% reduction in consumption would wipe seven million bottles of Scotch off the Scottish market, and was inconsistent with the claim that the government did not wish to harm the industry.

'Bulldoze' measures

"The claim by the Scottish Government, backing the Royal College of Physicians, that a 30p unit minimum price will reduce consumption by 30% but boost profits 68% defies belief," said a spokesman for the association.

"Only a week ago, the government's own framework document stated the higher 40p a unit would reduce consumption by just 2.6%, or less than one drink a fortnight.

"Now we are being told a lower unit price will reduce consumption by a third."

Meanwhile, Labour and the Liberal Democrats have accused Scottish Ministers of trying to bulldoze controversial measures through parliament.

The government hopes to implement some of the plans by including them in the new Criminal Justice and Licensing Bill, and others - including the minimum price - by amending existing regulations, a process which involves less intensive parliamentary scrutiny.

Ministers insisted they were not trying to short-cut the process of parliamentary approval.

Ms Sturgeon said: "We in the Scottish Government have always said we are not anti-alcohol and we want Scotland's alcohol industry to continue to thrive.

"But we will not shy away from introducing radical measures such as minimum pricing to get to grips with an alcohol misuse problem that's costing our country 2.25bn annually."

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SEE ALSO
Scots plan to stop cheap alcohol
02 Mar 09 |  Scotland
Scottish alcohol plan at-a-glance
02 Mar 09 |  Scotland
Mixed response to drink strategy
02 Mar 09 |  Scotland
Parliament rejects alcohol plans
02 Oct 08 |  Scotland

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