The positive effects on society of minimum pricing for alcohol will “swamp” any negative impact on the industry or on tax revenues, a report commissioned by the Government has found.
By Cormac O’Keeffe in the Irish Examiner
The research, by CJP Consultants, said the societal costs of the consumption of alcohol “far outweigh” the employment and tax benefits.
The report is being used by an official North-South body which is examining an all-island scheme, including the establishment of an exact floor price.
Drugs strategy minister Alex White last week said this body would report next April, followed by legislation introducing minimum pricing.
However, the enactment of any laws will have to await the outcome of a landmark case in Europe, taken by the drinks’ industry against a ruling in the Scottish supreme court backing its introduction there.
Detailed research conducted by economists Jim Power and Chris Johns said there was some evidence of modest health benefits from low alcohol consumption.
It added: “However, there is compelling evidence, built up over many decades of research, that alcohol mostly causes harm.
“The society costs of existing levels of alcohol consumption in Ireland far outweigh the employment, trade and tax benefits.”
The CJP research said the “most powerful weapon” to reduce consumption was to increase price, but that increases in excise duty increased the prices of all drink, while minimum unit pricing targeted cheap, and often high strength, alcohol.
It said minimum pricing legislation “might” violate EU competition law, but said the Scottish court had “convincingly argued” it did not.
“We believe that a policy of minimum unit pricing in Ireland would not violate EU competition law and would prove very beneficial as a public health measure,” the report said.
It said the growing gap between on- and off-licence alcohol prices was “stark” and that minimum unit pricing would help redress the balance.
The report examined states in Canada where minimum unit pricing has been introduced. It said studies in Saskatchewan estimated that a 10% increase in minimum prices had resulted in a 8% drop in total consumption, with a similar experience in British Columbia.
The report said the effects on employment in the industry and the impact on tax revenue would, in the long term, be “totally surpassed” by the positive economic, financial and social effects.
It said that the danger of minimum pricing was a decline in tax revenues, but said this could be offset by higher excise taxes in a dual policy.
A spokeswoman for the Alcohol Beverage Federation of Ireland said they had not seen the report but were against any increase in excise to meet a shortfall in exchequer return, saying excise rates here were among the highest in Europe.
The group urged caution on minimum pricing, saying it would be “important to consider the legal aspects of such a move”.
Drinking money
* €6.35bn was spent on alcohol in 2012, a slight rise on 2011. Expenditure peaked at €7.2bn in 2007;
* There was a 100% jump in the amount of alcohol consumed at home between 2000 and 2006. By 2012, around half of all alcohol was drunk at home;
* At the same time, bar sales fell by almost 25% between 2007 and 2012;
* Total tax on alcohol amounted to €1.9bn in 2012, up from €1.8bn in 2011, down from a peak of €2.25bn in 2007;
* Ireland is the third most expensive country for alcohol in the EU. Alcohol here is 13% more expensive than in the UK;
* The affordability of alcohol in Ireland rose by 100% between 1995 and 2007, mainly due to a rise in disposable income;
* Manufacturing in the drinks industry had a turnover of €2.95bn in 2008 and €1bn in exports (Drinks Industry Group of Ireland research);
* 4,263 people are employed in manufacturing and €1.1bn spent on materials for processing and energy (Digi);
* The on-trade provided 42,629 full-time jobs, with the off-licence sector employing the equivalent of 2,850 people (Digi).
