House of Commons Library

Alcohol: minimum pricing

Published Friday, September 25, 2015

A ban on the sale of alcohol below cost price, defined as alcohol duty plus VAT, came into force on 28 May 2014. This followed the Coalition Government's announcement in July 2013 that it would not introduce a minimum unit price. Alcohol charities and public health groups continue to argue for the introduction of a minimum unit price, claiming that this would have more of an impact on alcohol-related harm than the ban on below cost selling.

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The debate about a minimum price for alcohol has been prompted by concerns about high levels of drinking, its effect on public health and public order, and a widespread belief that most of the alcohol which contributes to drunken behaviour is irresponsibly priced and sold. One policy option is to set a minimum price per unit of alcohol. Another is to ban the sale of alcohol below cost price (the level of alcohol duty plus VAT).

Alcohol licensing is a devolved matter. In May 2012 the Scottish Government passed legislation which would enable it to introduce a minimum unit price for alcohol in Scotland. The intended price is 50p per unit. The Scottish Whisky Association has been challenging the legislation in the courts. On 3 September 2015, the Advocate General to the European Court of Justice said that prescribing a minimum price for alcoholic drinks could only be justified to protect public health if no alternative measure could be found.

The Coalition Government’s alcohol strategy of March 2012 included a commitment to introduce a minimum unit price for alcohol. A consultation on the strategy recommended a price of 45p per unit. In July 2013, following its analysis of the consultation’s responses, the Coalition said that it would not be proceeding with a minimum unit price, claiming there was not enough “concrete evidence” that this would be effective in reducing the harms associated with problem drinking without penalising responsible drinkers. There would instead be a ban on the sale of alcohol below cost price. This came into force on 28 May 2014 and is one of the licensing conditions of the mandatory code of practice that applies to licensed premises.

Alcohol charities and public health groups continue to argue for the introduction of a minimum unit price, claiming that this would have more of an impact on alcohol-related harm than the ban on below cost selling.

Commons Briefing papers SN05021

Authors: Philip Ward; John Woodhouse

Topics: Competition, Licensing

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