(Scotland) – Minimum alcohol price would give £700m to businesses instead of Government

  • Post category:World News

A minimum price for alcohol could mean  £700m pours from consumers to businesses instead of going to the Government as tax, a new study has found.
A “price-fixing” system has been suggested as a way to stop supermarkets selling alcohol at rock bottom prices, which has been criticised for encouraging binge drinking.

But the Institute for Fiscal Studies (IFS) warned that setting a minimum price would mean the financial gains would go to retailers and manufacturers, rather than adding to “much-needed” tax revenue.

Researchers looking at the impact of a minimum price of 45p per unit expected discount retailers Lidl, Aldi and Netto to be the biggest beneficiaries relative to their size, based on estimated alcohol sales.

Lidl was poised for a 20pc or  £40m increase in the annual spend on alcohol at its stores, while Tesco would be the winner in cash terms, with spending expected to jump 9pc or  £230m, researchers estimated.

Waitrose and Marks and Spencer would enjoy little benefit as they do not offer as much cheap alcohol as other retailers, researchers said.

They recommended that instead taxes be restructured so that they had the same impact as a minimum price, but ensured that extra revenue was funnelled to the public sector rather than the private.

Andrew Leicester, co-author of the research, said: “The Government should seek to change European regulations on how alcohol taxes can be structured, so that taxes can mimic the impact of minimum prices whilst ensuring the resulting revenues go to the Government and not firms.”

The Scottish government’s plan to adopt a 45p policy were last week scuppered by opposition members who removed it from a bill before the country’s parliament.

Ministers said the pricing system was needed to tackle Scotland’s drinking culture but the drinks industry claimed it would unfairly target the poorest families.

The IFS calculated that a 45p minimum unit price would see households with incomes below  £10,000 cut their consumption of shop-bought drinks by almost 25pc, but households with incomes over  £60,000 reduce their intake by only 12pc.


Source: (Scotland), 28/09/10
Journalist: Emma Rowley