Ministers have unveiled plans for minimum alcohol prices in England and Wales, which could spell the end for cheap high-strength beer and cider as well as a ban on multi-buy offers in supermarkets and off-licences.
Ministers believe the proposed 45p minimum price for a unit of alcohol will reduce total consumption by 3.3% and cut the number of crimes by 5,000 and hospital admissions by 24,000 each year, with 700 fewer alcohol-linked deaths annually.
Health experts welcomed the proposal, which is 5p higher than the 40p level floated by ministers earlier this year. But the drinks industry warned that responsible consumers would suffer, with wine and spirits prices being pushed up. The 45p minimum would mean a can of strong lager could not be sold for less than about ?1.56 and a bottle of wine below ?4.22.
And the move faces new legal obstacles, after an opinion issued by the European Commission which warns that the 50p price floor proposed in Scotland may breach EU free trade rules by curbing imports and urged the UK authorities to “abstain” from such a measure.
Meanwhile the Institute for Fiscal Studies calculated that the alcohol industry could gain almost ?1.4 billion from consumers as a result of the move, if purchasing patterns were unchanged. Low-income households would take the biggest hit to their wallets and both heavy and moderate drinkers would feel the impact, said the respected economic think-tank.
While the Government’s proposals are “unlikely” to affect prices in pubs or restaurants, they would force up the cost of 60% of alcoholic drinks bought at supermarkets and off-licences, said the IFS. Ciders would be most affected, with 85% of off-licence sales seeing an increase from the current average unit price of 31.4p. But shoppers would see price rises to 72% of lagers, 70% of spirits, 46% of wines and 34% of beers.
The change would force up average grocery bills by around 0.9%, but the weekly spend on food and drink would rise by as much as 8.3% in households with incomes under ?10,000 consuming more than 35 units per adult – about 12-15 pints of beer or four bottles of wine.
The IFS said any controls on minimum pricing should be achieved through increased taxation, which would see any increased spending go to the Treasury rather than the industry. But Home Office minister Damian Green said that minimum prices would reduce consumption. Launching a 10-week consultation, Mr Green said: “The evidence is clear – the availability of cheap alcohol contributes to harmful levels of drinking. It can’t be right that it is possible to purchase a can of beer for as little as 20p.”
Moderate drinkers will spend an extra ?7 per year as a result of the plans, while harmful drinkers would need to find an extra ?118, officials estimated.
The public purse could lose around ?200 million in duty due to falling sales and there would be a ?500,000 bill for enforcing the rules, plus up to ?16.6 million in “transitional” costs for the industry. But savings on health could be worth over ?400 million annually and the reduction in crime nearly ?13 million.