Combating Ultra-Cheap Alcoholic Drinks in the U.K

Last fall I wrote in some detail about “minimum pricing” of alcohol, an innovative approach to reducing high-risk drinking. At the time, minimum pricing was attracting support from a number of public health and public safety experts in the U.K. To recapitulate the key points, very heavy drinkers shop around for cheap booze, and as a result pay substantially less for each unit of alcohol consumed than does the rest of the drinking population. In the U.K., this typically involves going to a supermarket and buying high alcohol content drinks at low prices – indeed sometimes the alcohol is sold below cost as a loss leader for the store. Whereas an excise tax falls to varying degrees on all drinkers, minimum pricing concentrates its effect entirely on the high-volume alcohol consumers who experience and cause the most damage. A further advantage of minimum pricing is political: Because it isn’t a tax, it draws less opposition from many retailers and members of the public.

That said, minimum pricing lost by a single vote in the Scottish Parliament last fall and never garnered strong, widespread support from any of England’s political parties. Lobbying by the supermarket industry contributed to this situation, as did widespread misunderstanding of how minimum pricing works. Jamie Bartlett of the leftish Demos Institute made the same complaint as did many conservatives, namely that moderate, responsible pub goers shouldn’t be punished economically for the heavy drinking of a yobbish minority of lager louts. But this is wrong-headed: Moderate drinkers already pay well more than even the highest proposed minimum price for those fine pints of Guinness and IPA the publican pulls for them (I felt obligated, as a scientist, to research this personally and therefore speak with authority). That’s why wise pub owners support minimum pricing; it doesn’t hurt their customers one whit and it protects the pubs from being put out of business by Tesco.

Although minimum price has yet to catch fire with much of the English public or their elected leaders, the UK coalition government has committed to a more modest variant, namely banning below cost sales of alcohol. Even though this policy affects only the very cheapest drinks, RAND Europe forecasts that the below-cost ban may nonetheless lead to modest decreases in high-risk drinking. In contrast, with the stunning electoral success of the Scottish National Party, which supports a much higher minimum price (e.g., 30-50p per unit) Scotland may chart a different course, as it is empowered to do because of the peculiar way that alcohol policy is devolved within the U.K.

Some elements of the Scottish drinks industry are already rattling their saber and the SNP will feel that pressure. There is also a chance for some public health opposition as well, as some advocates resent the fact that the alcohol retailer gets to keep the money from a minimum priced sale, which they would not do under a new excise tax on alcohol that is earmarked to support prevention or treatment programs. Hold your nerve, SNP!

I hope both England/Wales and Scotland go forward with the pricing policies they have proposed. The fundamental reason of course is that it might reduce the appalling amount of damage heavy drinking is doing to the public health and public safety of the U.K. But from a wonky perspective, further excitement comes because if two geographically adjacent heavy drinking societies initiate different pricing policies targeting high-risk drinking, it would be as good a natural experiment as we are likely to get in the alcohol policy field. The lessons learned could be quite valuable not only for the U.K. but for other societies as well.

[Cross-posted at Same Facts]

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Keith Humphreys

Keith Humphreys is a professor of psychiatry at Stanford University. He served as a senior policy advisor at the White House Office of National Drug Control Policy from 2009 to 2010.