Review of ‘chaotic’ alcohol duty preferable to minimum pricing, says think tank
An IFS analysis showed the 50p level would have a “substantial impact on off-trade alcohol prices”.
Lager and cider drinkers will be hardest hit by minimum unit prices on alcohol, a respected economic think tank has said.
The Institute for Fiscal Studies said the 50p minimum unit price planned in Scotland would see the price of a pack of 20 cans of Strongbow cider from Tesco double from £11 to £22.
Minimum pricing is a vital public health measure with strong support from those who work in frontline of alcohol misuse. It will save lives.— Nicola Sturgeon (@NicolaSturgeon) October 21, 2016
The Welsh Government is also set to introduce a minimum price and health campaigners have called for England to follow suit.
The think tank suggested that a wider review of the “chaotic” alcohol duty system could be a better approach to tackling problem drinkers than a minimum unit price.
“Tax reform is likely to avoid the main drawback of minimum unit pricing, which is that it boosts the profits of the alcohol industry,” the body said.
The IFS analysis showed the 50p level would have a “substantial impact on off-trade alcohol prices” and between October 2015 and September 2016 some 68% of alcohol units sold were priced below the proposed floor.
How would a minimum price for alcohol work? We explain here pic.twitter.com/i65JVlzxtI— Welsh Government (@WelshGovernment) July 15, 2015
The think tank’s report said heavy drinkers “do tend to buy cheap alcohol”, suggesting a minimum unit price may be “reasonably well targeted at this group” but the policy’s impact will depend on how much the price increase puts off consumers.
In an indication that lager and cider drinkers will be most affected, the analysis showed that 86% of units of lager were currently sold below the 50p minimum price and 79.7% of cider.
The average unit of lager will increase in price by 43.8% while for cider it will rise by 89.5%. Fortified wines are also expected to increase in price, with 71.5% of units sold at below the 50p rate.
The IFS analysis indicates a bottle of Tesco Cream Sherry would increase by 20% from £7.15 to £8.75.
Martin O’Connell, an associate director at the IFS, said: “The costs of anti-social drinking are high and concentrated among heavy drinkers.
“Heavy drinkers, when buying alcohol in supermarkets and off-licences, tend to choose products that are cheaper per unit than more moderate drinkers. A minimum unit price would therefore target a higher share of the units that heavy drinkers buy.
“However, the policy will lead to substantial increases in alcohol prices that will also impact on many moderate drinkers.”