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After successfully quashing a legal challenge in the Supreme Court, in a bid to reduce alcohol related harm, minimum pricing of alcoholic drinks will become a part of the Law in Scotland with effect from today, 1 May 2018.

50p and glass

The Reality

The introduction of a minimum price of 50p per unit will likely have no effect on the price of drinks consumed in pubs or clubs (on-sales) as the current pricing of such drinks is already in excess of this floor price.  It will, however, affect off-sales, notably supermarket own brand alcohol which tends to be stronger and sold at cheaper prices.  To meet with the legislation, from today, prices cannot be lower than:

Whisky, 700ml, 40%, £14.00                  

Vodka/Gin, 700ml, 37.5%, £13.13

Wine 750ml, 13%, £4.88

Beer 4x440ml, 5%, £4.40

Cider 2000ml, 5%, £5.00

As such, the existing pricing of premium spirits, craft beers and fine wines purchased from a licensed retailer will be unaffected by the minimum unit.

The Rationale
 
Alcohol related harm is a significant issue for Scotland and affordability is recognised as one of the key components of increased consumption. 

small 50pIn the absence of a minimum unit price, an individual could drink in excess of the weekly guidelines for approximately £2:50.  The likely effects of the minimum unit price of 50p are that (i) alcohol related deaths would fall by about 120 per year by year twenty of the policy; and (ii) there would be a fall in hospital admissions of 2,000 per year by year twenty of the policy (Source:  Research by the University of Sheffield (2016)).  Twenty years is an interesting timeframe given that the new Act contains a sunset clause on expiry of year six unless it can be demonstrated to have had an impact.  It appears that the Scottish Government therefore considers a five year period will be sufficient to allow examination of the policy in action.
 
Some have queried why the vote has been for the introduction of a minimum unit price as oppose to taxation.  According to the Scottish Government, the modelling shows that minimum unit pricing is targeted with the greatest benefit falling on harmful drinkers, and particularly those living in poverty.  There has also been research and consultation on the figure of 50p.

The Backstory

The main piece of legislation governing the sale of alcohol in Scotland is the Licensing (Scotland) Act 2005.  It was the first major overhaul of the liquor licensing system since 1976 and has been the subject of countless amendments since. While the Bill’s policy memorandum discussed minimum pricing, no such provision made it into the Act.

Challenge 25Minimum pricing has been on the SNP’s manifesto since 2007.  As a minority government, however, the SNP administration of 2007-11 had to rely on opposition support to push minimum pricing through.  The support wasn’t there and so while the Alcohol etc. (Scotland) Act 2010 can be commended for introducing ‘Challenge 25’ and also containing provisions to outlaw ‘irresponsible' drinks promotions and minimum pricing of multi-packs (i.e. if retailer sold a single can of lager, a 6 pack of the same lager would need to be at least 6 times the price of the single can) there was nothing to set a floor price for the single can. Similarly, if 3 bottles of wine were on sale for £10, the retailer could sell a single bottle of the same wine for £3:33 (or more).  The Legislation therefore lacked some of the teeth it would have had if the then suggested minimum price of 45p per Unit had been included in the final version of the Bill, as opposed to getting voted down when reintroduced at Stage 2.

The Act

The (Alcohol Minimum Pricing) (Scotland) Act 2012 sets out a formula: Minimum Unit Price (currently 50p) x Strength x Volume (in litres) x 100 to arrive at the minimum retail price of the alcohol being sold.

Scottish parliament

The sunset clause in the Act provides that the minimum pricing provisions will expire after 6 years unless after expiry of the fifth year and before the end of the sixth year the Scottish Ministers decide that minimum unit pricing is to continue.  At which point, the Scottish Ministers must report to the next Scottish Parliament on the operation and effect of the minimum pricing provisions during the previous five years’ period including in particular such matters as social and economic deprivation and the then Scottish Parliament will have the opportunity to refresh.  The price per Unit is Contained in an Order and open to change. 

If you would like further information on any of the issues discussed above or any other Licensing matter please contact a member of the Stronachs Commercial Property Team.

Eloise Robb

Senior Associate

 

Chambers Leading Firm 2019

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