Home Office proposes ban on selling alcohol below duty + VAT
The Home Office has announced a ban on retailers selling alcohol below the rate of duty plus VAT, but has steered clear for now from setting a minimum price for alcohol.
The proposal would mean retailers would be stopped from selling a one litre bottle of vodka (at 37.5% abv) for less than £10.71 and a 440ml can of lager (at 4.2% abv) for less than £0.38.
Minimum pricing presents significant legal challenges as Middlesbrough Council’s recent approval of a new licensing policy – in which it will “encourage” licensed premises to adopt a price of 50p per unit of alcohol – shows.
Crime Prevention Minister James Brokenshire said: “We know that pricing controls can help reduce alcohol-related violent crime and this is a crucial step in tackling the availability of cheap alcohol.
“In nearly half of all violent incidents the offender is believed to be under the influence of alcohol. That’s why we believe it is right to tackle the worst instances of deep discounting.”
The minister insisted that the measure would also send “a clear message that the government will not stand by and let drink be sold so cheaply that it leads to a greater risk of health harms or drunken violence”.
However, the government’s announcement was criticised as not going far enough.
Don Shenker, chief executive of Alcohol Concern, said: "The government's plans to introduce a ban on selling alcohol below the cost of duty and VAT will hardly touch the sides in dealing with binge-drinking and alcohol-related harms.
“The price of the vast majority of drinks won't be affected by this and the threshold is not high enough to deter those who use cheap drinks to get drunk. There would need to be a minimum price of at least 40 pence per unit to see a drop in alcohol-related crime, health harms and deaths. Once again the supermarkets have won the day."
The British Beer & Pub Association has meanwhile rejected claims that tax on alcohol is too low in the UK. Chief executive Brigid Simmonds said: “Our alcohol taxes are among the highest in the developed world, and for beer we have had huge, 26% duty increases in the past two years.”
She added: “Our already high taxes show that duty-plus-VAT cannot be used as a proxy for a minimum price for alcohol. This would have a particularly devastating effect on pubs. When it comes to tackling alcohol misuse, what we need most is improved alcohol education and awareness, and tougher, targeted enforcement of the huge range of existing laws. Pubs need lower taxes – and less red tape.”
In its review of alcohol pricing, published at the same time as the announcement, the Home Office concluded that “on balance the international evidence base suggested that policies designed to increase the price of alcohol might be effective in reducing the harms caused by alcohol.
“However, alcohol price is only one factor that may affect levels of alcohol consumption, with individual, cultural, situational and social factors also influential,” it said, adding that on the basis of the evidence reviewed, it was not possible to determine which alcohol pricing policies may be the most effective.
