Supplementary note to Question 42
ALCOHOL MINIMUM UNIT PRICE
At the Health Select Committee on Tuesday 20
July, I offered to write to you about a minimum unit price for
alcohol, and why I do not believe it is the panacea for our problems
with alcohol, as is sometimes suggested.
Tackling alcohol misuse and addressing the full range
of harms from alcohol is a complex social problem. The increase
in consumption over the last generation seems driven by cultural
factors, including changing attitudes and consumption patterns,
as well as changes in price and availability of alcohol. We are
now drinking at around European average levels, having been much
lower than the average 50 years ago. And, whilst consumption has
fallen recently, the harms from alcohol, such as liver disease,
continue to rise. So our response needs to be intelligent and
comprehensive, if it is to be equal to the problem. We need to
address the demand side, and not just the supply side.
We all have a role to play. And that starts
with the responsibility of individuals and families. Public understanding
of risks to health from alcohol needs to improve. Government and
the alcohol industry also have responsibilities to encourage and
assist consumers to drink sensibly and to ensure appropriate availability,
regulation and promotion of alcohol. That is why we are changing
the licensing laws, and why I will be asking the alcohol industry
to address some of their less responsible practices.
There is clear evidence of a link between the
price of alcohol and its consumption, and evidence that reductions
in consumption will also reduce health and other harms. This was
shown in the Sheffield study.[2]
The review noted that since 1980, rising earnings
have been the biggest factor in the increasing affordability of
alcohol, with alcohol prices having risen faster than retail prices
generally. It would be a mistake, therefore, to see price interventions
in isolation. We should avoid a fixation on pricing as a sole
solution—and pricing itself is a complex issue. The recently
agreed WHO Global Alcohol Strategy notes that:
"Factors such as consumer preferences and
choice, changes in income, alternative sources for alcohol in
the country, or in neighbouring countries, and the presence or
absence of other alcohol policy measures may influence the effectiveness
of this [pricing] policy option."
A minimum unit price is only one of a number
of possible pricing policies. There is wide global experience
of alcohol taxation policies, and a broad evidence base on their
effectiveness. A number of European countries restrict the sale
of alcohol below cost (along with other products) and we can learn
from their experiences. Most Canadian provinces have "social
reference pricing", a form of minimum unit pricing, but the
evidence for its effectiveness seems to be limited. So the evidence
base to support minimum unit pricing is not broad and the benefits
may not be as great as has been suggested.
Unlike taxation, minimum unit price could give
a substantial economic benefit to retailers. However, it is the
taxpayer not the retailer who suffers the financial consequences
to society and the NHS.
I also firmly believe that the majority of people
who do drink responsibly should not be penalised for the behaviour
of an irresponsible minority. Minimum unit pricing would intervene
heavily in the market, potentially causing distortions and higher
prices which would undoubtedly penalise responsible drinkers.
I could only consider such an interventionist
policy as a minimum unit price if there were a very strong evidence
base to support it as a sustainable policy, in preference to other
policies. I fear that that is lacking at present.
The Sheffield University review of the effects
of alcohol pricing and promotion was subject to the limitations
of the broader evidence base for alcohol policy. Importantly,
the long-term impact of introducing a minimum unit price is far
from clear.
The review noted the limitations of the evidence
on the links between alcohol and crime. It recognised that the
impact of a minimum unit price on alcohol-related crime would
be limited.
Equally importantly, a number of areas were
not looked at all in the review, and would need to be assessed
before considering such a strongly interventionist policy. These
include:
— The impacts on lower income groups, both
economic and related to health and other harm.
— The response of the industry to a minimum
unit pricing policy. It could, for example, lead to retailers
increasing prices on alcohol products marginally above the level
set for a minimum price in order to retain premium brand positioning,
thereby further impacting on responsible drinkers.
This Government is particularly concerned about
the effects of any new policy measures on low-income households.
Although the Health Select Committee report made much of the minimal
impact on "moderate" drinkers, this was modelled at
the average consumption for those in the lower risk category—at
around 6 units of alcohol a week. However the recommended limits
are not to regularly exceed 3-4 units a day for men and 2-3 units
a day for women. So the impact on those who are drinking closer
to the recommended limits would be considerably higher, and potentially
higher still for those on lower incomes.
There are also European legal issues around
minimum unit price whose implications are not fully clear, unless
tested in court, but which pose an additional risk to such a policy.
The Home Office will shortly consult on an appropriate
way to end the sale of alcohol below cost. This should be in the
long-term interest of both communities and the licensed trade.
This is a more appropriate policy as it will end the irresponsible
promotion of alcohol as a loss leader.
Andrew Lansley CBE
July 2010
2 Independent Review of the Effects of Alcohol Pricing
and Promotion: Part A, Systematic Reviews; and Part B, Modelling
the potential Impact of Pricing and Promotion Policies for Alcohol
in England, University of Sheffield, School of Health and Related
Research, 2008. Back
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