Examination of Witnesses (Questions 520
WEDNESDAY 31 JANUARY 2001
520. Studies on alcohol abuse suggest that this
is a serious problem in Scotland. We are only too well aware of
that fact. What concerns does the STUC have regarding the disadvantages
to health connected with alcohol abuse? Would not a reduction
in excise duties simply increase the alcohol-related problems
(Mr Speirs) It is a serious issue which genuinely
merits further research on the likely impact of a reduction in
price, whether it be by duty or any other way, on the problem
of abuse. Our general position is that alcohol abuse is best tackled
through education and sophisticated promotion of cultural change.
Increased alcohol abuse problems can be identified as varying
in different parts of the country. In most instances one cannot
relate it to price; clearly, it is related to something more sophisticated,
including the whole cultural attitude to alcohol. One area in
which the STUC has been involved for many years is working with
the Scottish Council on Alcohol and what used to be called the
Industrial Alcoholism Unit. (I am afraid that its current name
escapes me.) We work closely with them and Scotland's Health at
Work in encouraging the promotion of sensible and informed consumption
of alcohol. We do not believe that the kinds of things we are
talking aboutgrowing the market as a whole and ending discriminatory
taxationwould have a negative impact on the problem of
alcohol abuse. The problem is related much more to cultural matters
which are harder to deal with than simply varying the rate of
tax. However, it must be tackled.
521. Are you aware of any evidence or reports
as to which form of alcohol does the most harm, whether it be
beer, wine or spirits, or are they all equally good or bad depending
on your point of view?
(Mr Speirs) I confess that I am not up to speed on
the latest research in this area. I suspect that you will find
a number of different reports from different angles. I do not
want to be flippant about it, but everyone knows that sometimes
red wine is good for you; at other times it is discovered that
it contains some impurity which causes a problem if you have a
particular condition. We do not have up to date information which
must be looked for elsewhere.
522. You referred to bulk malt exports and you
wanted to say a little more about it.
(Mr Speirs) Although we work closely with the Scotch
Whisky Association in a number of areas, this is an area where
we differ from the industry. We take the view that the export
of bulk malts for blending with grain spirits elsewhere, even
though the product cannot be explicitly sold as scotch whisky,
is damaging to the brand overall. In particular, we see a particular
role for the niche marketing of high quality scotch malt whisky.
That is one area where there is potential for growth. The export
of bulk malts can only be damaging to the brand overall. If it
is bottled somewhere else it is not being bottled in Scotland.
523. Is there not a Catch 22 here? In particular,
in the 1970s it was the only way by which a number of distilleries
could be kept open and in production.
(Mr Speirs) The case could have been made at that
particular time that that was how they could be kept in production.
However, there are lots of downsides to mergers, acquisitions,
globalisation and loss of control. One of the upsides is that
if there is a company with the kind of resources that are available
to Diageo and the other giants in dealing with a product like
scotch malt whisky it should take a sufficiently long-term view
and have access to adequate resources to be able, if necessary,
to stockpile rather than undermine future markets by devaluing
the brand by using bulk exports.
524. Would that be another variation on the
(Mr Speirs) In providing incentives to companies to
(Mr Speirs) I have not thought of that; perhaps it
is worth thinking about.
526. During the course of the inquiry the committee
has visited Islay, Shieldhall, Kilmulid, Dumbarton and Tenant
Caledonian Brewery. We are to visit to Barsoft Drinks and Beaulieu
Water to see all the production of the four types of drinks in
which we are interested. We also hope to talk to the EU and World
Trade Organisation. Are there any points relating to Scotland
which you suggest should be raised with the EU and WTO?
(Mr Fulton) There are a number of strategic issues
here which focus on what we said earlier about mergers and acquisitions.
Earlier I referred to the decision by Seagrams to sell off its
spirits business to Pernod Ricard and the partnership arrangement
which basically crosses a number of boundaries. It has had the
ability to spend about £5.5 billion which is about one third
of the whole of the Scottish Parliament's budget. I suggest that
there is a major economic issue here. The same applies to Diageo;
and there may be others players who so far have been excluded
but are looking at what they do. Within the Scottish economy it
is difficult to be able effectively to control that and the impact
on future jobs if there are two players which have such a major
impact. Perhaps we should look at tightening up the rules from
a European perspective, because we are not alone in this market.
I have no doubt that similar discussions take place in France
in the context of the cognac industry and the rationalisation
in that premium area. As far as concerns workers, very often these
takeovers and mergers are determined by the Transfer of Undertakings
(Protection of Employment) Regulations (TUPE). One of the issues
that faces the unions, not only in this industry, is those matters
which are not currently caught by TUPE. There is no control over
pensions; they are still a grey area. One must revisit the whole
of the legislation. One of the first questions that we are asked
by our members is what is likely to happen to their pension arrangements
if such and such goes ahead. That is a very complex, critical
area, and it has a major impact on what happens. There are a number
of key issues. Industry has the ability, not only in Scotland
but also Europe, to alter the economy, with the potential for
radical effects upon it. More parochially, there is the issue
of pensions which may be more a matter for the UK Government.
(Mr Speirs) I should like to re-emphasise the issue
of equal treatment of employees in terms of the right to consultation
and information, and also rights in terms of what happens at acquisition
in relation to pensions. One can also have a level playing field
in terms of the cost of closures. There is little doubt that one
issue that comes into playthis does not apply solely to
the drinks industryis that when decisions are taken globally,
or even at European level, about where to rationalise and close,
the costs to the employer in the UK can be significantly less
than elsewhere. Without saying that the costs should be lower
or higher, there should be a level playing field. Another matter
is that within the context of the WTO and EU the issue of free
trade, which is an entirely different debate, must be linked to
a robust competition policy.
527. We have exhausted our questions. Would
either witness like to make any final remarks?
(Mr Speirs) Chairman, thank you very much for the
opportunity to speak to the committee.
Chairman: If subsequent to the meeting something
occurs to you please send it to the clerk. We welcome any further
submissions that you may make. I thank you both for your attendance
this morning. Your evidence will be very helpful to the committee
when it comes to compile its report.