ALCOHOL RESEARCH UK PRESS RELEASE

Budget 2013: Good news for pubs, but nothing on cheap alcohol

20th March 2013

In scrapping the beer duty escalator, the Chancellor of the Exchequer has provided much-needed support for a troubled pub industry. However, the Government’s wider policy on reducing alcohol-related harm remains confused. While a 1p reduction on beer duty may lower prices in pubs, it will do little to target the very low-cost alcohol in supermarkets and off-licenses that David Cameron is committed to tackling.

The 2012 Alcohol Strategy contained an explicit commitment to introduce minimum unit pricing. This week, an e-petition calling for the Government to retain this commitment gathered almost 7,000 signatures.[1]

A recent study by the Institute of Fiscal Studies has suggested that taxing alcoholic drinks by strength may be effective in targeting problem drinkers.[2] By scrapping the beer duty escalator the Chancellor has gone some way towards equalising the tax burden on different beverages. However, current EU directives mean that, unlike beer, wine and cider cannot be taxed by strength. This means the increases in today’s Budget remain a blunt instrument in terms of harm prevention.[3]

The Health Select Committee has previously noted that general tax rises are often not passed onto customers by supermarkets.[4] In developing their alcohol pricing policy, the Government needs to explain how this problem will be addressed – especially since they have abandoned the policy of banning the sale of alcohol at less than cost price.

James Nicholls, Research Manager at Alcohol Research UK, said:

‘While action on the beer duty escalator will help pubs, the Government needs to make it’s position clear on the issue of very cheap, high-strength alcohol. These are the products that cause the greatest levels of harm; they are also the products that David Cameron has repeatedly promised to target. If the Government intends to drop minimum unit pricing, then it must explain how alternative policies will be more effective in addressing this problem.’

For further information contact:

Dr James Nicholls

Research Manager

Alcohol Research UK

07985 548405

0117 9721207

For editors

Alcohol Research UK is an independent charity seeking to reduce alcohol-related harm by ensuring policy and practice are informed by impartial, evidence-based research. We fund around £600,000 of alcohol-related research each year.

[1] E-petition: Minimum unit price for alcohol will save lives http://epetitions.direct.gov.uk/petitions/47073

[2] Griffith, R., Leicester, A. and O’Connell, M. (2013) Price-based measures to reduce alcohol consumption. London: IFS

[3] Council Directive 92/83/EEC on the harmonization of the structures of excise duties on alcohol and alcoholic beverages

[4] Health Committee (2010) Alcohol: First Report of Session 2009-10 (HC151-I). London: HMSO