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meeson · Site Admin Joined: 26 Feb 2007 Posts: 615

Economic case for minimum pricing on alcohol is "weak", say finance experts

Savings to NHS will be outweighed by economic cost, says CEBR

Leading economists have claimed that minimum pricing on alcohol products will not deter ‘problem drinkers’ from drinking excessively and will simply add more than £1bn to UK consumers’ annual shopping bills.

In a report commissioned by brewing giant SABMiller published this week the Centre for Economics and Business Research (CEBR) poured cold water on claims that minimum pricing would help cut consumption of alcohol among “heavy and hazardous drinkers” and concluded that “the economic case for minimum pricing is weak”.

The financial impact of implementing a minimum pricing regime of 40p a unit as is being proposed in Scotland would see consumers spending more than £80m extra annually on alcohol, according to the CEBR report, while the same consumers would lose an additional £8m a year in what the researchers call “consumer welfare”.

What it called “harmful drinkers” – those consuming more than 50 units a week – would reduce their consumption by only one to two units per week on average.

“Pricing legislation is unlikely to have a significant impact on overall consumption levels of those drinkers that it is intended to target, unless price increases are set at very high levels, which would place an unfair burden on moderate drinkers,” the report’s authors concluded.

And according to the CEBR, if a minimum price of 50p per unit of alcohol were to be introduced consumers would spend nearly £1.8bn a year more for alcoholic products, while the savings to the NHS, policing and victim support would amount to “around £200m”.

The CEBR’s report said the net economic cost of minimum pricing, excluding the impact on businesses, would be in the region of £2bn.

The minimum pricing debate has raged for several months and was given added impetus in May when Lib Dem shadow Home Affairs spokesman Chris Huhne’s tabled an early day motion (EDM) calling on the government “to take steps to end the deep discounting and loss-leading sales of alcohol products”.

Previous Sheffield University research indiactes there is evidence that a minimum price of 50p would stop 3,400 deaths a year.