Health Committee - The Government's Alcohol StrategyWritten evidence from the Wine and Spirit Trade Association (GAS 38)

The Wine and Spirit Trade Association (WSTA) welcomes the opportunity to submit written evidence to the Committee’s inquiry into the Government’s Alcohol Strategy. We represent 340 companies in the UK alcoholic drinks sector, which range from global businesses to SMEs. We work with our members to promote the responsible production, marketing and sale of alcohol.

Summary

Alcohol consumption in the UK has declined and the majority of people drink responsibly. Alcohol policy should be targeted at the minority who misuse alcohol.

Alcohol-related policy measures must be shown to be necessary, evidence-based and proportionate, with policy-making fully coordinated between different government departments.

The alcohol industry has an important role to play in tackling alcohol misuse. Our commitment is demonstrated though pledges made through the Public Health Responsibility Deal.

There is no evidence that minimum unit pricing will reduce alcohol misuse. It will affect all consumers, regardless of whether they contribute to alcohol harm and a 40p minimum unit price will hit the poorest 30% of households hardest.

Minimum pricing is likely to be illegal. It is inconsistent with the operation of the free market for the state to intervene on price. This is a view previously shared by government ministers.

We want to see businesses able to offer a greater range of lower alcohol products and we welcome the Government’s intention to look at existing barriers to the promotion of lower strength alcohol products.

1. General Comments

1.1 The debate about alcohol misuse and how to tackle it must be based on all the available evidence. While a minority of people continue to misuse alcohol, it is important to recognise that alcohol consumption in the UK has declined and most people drink within recommended guidelines.

1.2 Measures to tackle alcohol misuse should be targeted at those who misuse alcohol, rather than the majority of people—and businesses—who produce, sell and consumer alcohol responsibly.

1.3 The drinks sector plays a valuable role in the UK economy, as a source of employment, growth and investment. The cumulative weight of regulation on the alcohol industry, in addition to year-on-year duty increases, is a major concern for businesses, particularly given the challenge to remain competitive in the current economic climate.

Key facts about UK Alcohol Consumption

UK consumption has fallen. An analysis of HMRC clearance data shows that total alcohol consumption per head of the UK population fell by 13% between 2004 and 2011, from 9.5 litres of pure alcohol per person to 8.3 litres.1

ONS survey data reveals that between 2005 and 2010, average weekly alcohol consumption in Great Britain decreased from 14.3 units to 11.5 units per adult.2

More people are drinking within recommended limits. Fewer people in Great Britain are drinking over the recommended weekly guidelines. The proportion of men drinking more than 21 units a week has fallen from 31% in 2005 to 26% in 2010. The number of women drinking more than 14 units a week down from 21% to 17% over the same period.3

Binge drinking continues to decline. The proportion of men drinking more than eight units on their heaviest drinking day in a week fell from 23% in 2005 to 19% in 2010. Women drinking more than six units were 15% in 2005 and 13% in 2010.4

2. Responsibility within Government for Alcohol Policy

2.1 The question of which government department should have responsibility for alcohol policy is not a matter for industry. However we would like to emphasise that there must be effective, joined-up policy-making across Whitehall, with all measures affecting industry shown to be necessary, evidence-based and proportionate.

3. The Coordination of Alcohol Policy Across the UK

3.1 It is important that the UK Government and Devolved Administrations recognise the implications for industry of imposing different regulatory requirements within one marketplace. Compliance with different regimes in the constituent parts of the UK imposes additional operating costs on businesses, which over time could have an impact on the ability of the industry to contribute to growth, investment and job creation. There have already been several successive reforms to licensing laws across England, Wales, Scotland and Northern Ireland in recent years.

4. The Industry’s Role in Addressing Alcohol-related Health Problems

4.1 The industry has an important role to play in tackling alcohol misuse and encouraging people to drink sensibly. We want alcohol products to be made, sold and enjoyed responsibly.

4.2 We believe that the most effective way to promote responsible drinking is not through government action in isolation, such as regulation, but through a partnership approach involving government, industry and the health community. Industry has much to contribute to such a partnership, as it can reach consumers in ways which government cannot.

The Public Health Responsibility Deal

4.3 The Responsibility Deal, launched in March 2011, is a good example of how the industry takes its responsibility to address alcohol misuse seriously. We welcome the Government’s recognition in the Alcohol Strategy of our voluntary support for the Deal.

4.4 As a Trade Association, the WSTA has been at the forefront of the work on the alcohol strand of the Deal. Our former Chief Executive, Jeremy Beadles, was co-chairman of the Alcohol Network until January 2012, the group charged with overseeing development of alcohol pledges. There are now eight collective alcohol pledges supported by the industry. More detail about some of these is set out below.5

Pledge A1: Labelling

4.5 Building on the 2007 voluntary labelling agreement with the Department of Health, the industry has pledged to include clear unit labelling, NHS guidelines and a warning about drinking when pregnant on over 80% of alcohol products on shelves by 2013. Businesses will also be encouraged to include two additional elements, which are the Drinkaware web address and a responsibility statement such as “drink sensibly” or “know your limits”.

4.6 Left is an example of the kind of label format we wish to see on alcohol products.6 The Portman Group has agreed to monitor implementation of the pledge, with criteria agreed with the Department of Health to ensure labels display information in a clear and consistent manner.

Pledge A3: Unit Awareness

4.7 The industry has committed to raising people’s awareness and understanding of units to help people drink within recommended guidelines. In February retailers launched the “How many units in your drink?” consumer campaign. This is based on a simple “2–2-2–1” message, to show the number of units in a typical can of 4% abv lager, 330ml bottle of 5% lager, 175 ml glass of 12% ABV wine and a single measure of a 40% abv spirit. Campaign materials are being displayed by major retailers across the UK on posters, shelf barkers and till screens. Some WSTA members have supplemented in-store messaging with communication through other channels, such as membership magazines.

4.8 The off-trade campaign has drawn on unit awareness material produced for use in pubs and clubs, in order to provide consistent messaging wherever alcohol is being consumed.

Pledge A7: Community action to tackle alcohol harm

4.9 The industry has committed to supporting local schemes to tackle alcohol-related harms. The WSTA has made an individual pledge in support of this, to extend Community Alcohol Partnerships (CAPs) around the UK. CAPs, developed by retailers and coordinated by the WSTA, aim to tackle the problems caused by underage access to alcohol through local partnership working by licence holders, trading standards, police and local authorities.

4.10 In 2011, CAPs were established as a standalone Community Interest Company with an Advisory Board, Chaired by Baroness Helen Newlove, to oversee expansion of the scheme.

4.11 There are now 36 operational CAP schemes across the UK and there have been several successful launches of new schemes over the last year. These have included a partnership in Derry, the first scheme of its kind in Northern Ireland, and our first inner city project in Islington, London. Independent evaluations of CAP projects have demonstrated positive impacts on underage drinking and alcohol-related anti-social behaviour.

5. Minimum Unit Pricing

5.1 The WSTA is opposed to a policy of minimum unit pricing both in principle and in practice. There is no evidence to prove that it will tackle alcohol misuse yet it will raise prices for consumers who do not have a problem with alcohol. A 40p minimum unit price will hit the poorest 30% of households in England and Wales the hardest.

No evidence it will tackle misuse

5.2 Minimum unit pricing has not been successfully implemented anywhere in the world, so there is no real-world evidence to support it. It is clear that there is no simple link between price, consumption and alcohol misuse. Countries that have the highest alcohol taxes and highest prices are also ones where alcohol misuse is a problem. In the UK, alcohol consumption has dropped since 2004, but there has been reportedly no decrease in harm indicators, such as alcohol-related hospital admissions.

It will punish responsible consumers- particularly the poorest

5.3 Minimum unit pricing will affect all consumers regardless of whether they contribute to alcohol harm. Evidence suggests that the heaviest and most harmful drinkers are the least responsive to price changes, meaning that higher prices will penalise moderate drinkers whilst having little impact on those whose behaviour we want to change.

5.4 Minimum pricing would be a highly regressive measure which would hit the poorest hardest. An ONS study noted that people in poorer households spend a greater proportion of their disposable income on alcohol duty than higher wage earners.7 A minimum alcohol price of 40p would hit the 30% of households in England and Wales on the lowest incomes.8

It is likely to be illegal

5.5 It is inconsistent with the operation of the free market for the state to intervene on price. Minimum pricing could therefore represent a barrier to trade and be illegal under EU law. Government Ministers have previously shared this opinion. For example, Chloe Smith, Economic Secretary to the Treasury said: “The Scottish Government have recently introduced a Bill that seeks to bring in a 45p per unit minimum price… we believe that it could be incompatible with article 34 of the treaty of the functioning of the European Union…That is the position.”9

5.6 Article 34 of the EU Treaty prevents Member States from adopting and maintaining unjustified restrictions on intra-EU trade. It states that “Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited”. Article 36 allows restrictions for the protection of health, but the measures must be proportionate and not “constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States”. By fixing a minimum price for alcohol, the UK Government would risk impeding the free trade of alcohol within the EU. For example, even though a minimum price would be applied equally to domestically produced and imported products, it is likely to put imported products at a disadvantage if their lower cost price could not be reflected in the retail selling price.

5.7 Legal precedents for this include the Openbaar Ministerie v Van Tiggele10 case in 1978, when the European Court of Justice ruled that Dutch legislation setting out minimum selling prices for certain spirits was illegal. The ECJ found that imports may be impeded where prices or profit margins are fixed at a level that places imported products at a disadvantage. In 2010, the ECJ judged that French, Austrian and Irish legislation on minimum prices for tobacco products were illegal.11 The court rejected public health justifications for a minimum price.

6. The Effects of Marketing on Alcohol Consumption

6.1 The UK already has some of the strictest restrictions on alcohol advertising and marketing in the world. The industry’s self–regulation through the Portman Group Code of Practice on the Naming, Packaging and Promotion of Alcoholic Drinks works to ensure that products do not encourage irresponsible consumption or appeal to children. Alongside this, the Advertising Standards Authority enforces strict standards in all “paid for” space, such as television and radio. The Portman Groups’ submission to the Committee contains more detailed comments on this issue.

6.2 The Government has announced an intention to introduce a ban on multi-buy discounts, which the WSTA opposes. There is no compelling evidence that retailer promotions are causing alcohol misuse and that banning such promotions will reduce alcohol harm.

7. Education and Information

7.1 We believe that better education to help people make sensible choices about their consumption is very important. In recent years there have been concerted alcohol education and information campaigns by government, industry and NGOs and evidence suggests this is having an impact. For example, knowledge of units and sensible drinking guidelines amongst the public has increased.12

7.2 Industry commitments under the Responsibility Deal will go even further towards educating people about sensible drinking. (See Section 4). The industry is also developing a new pledge to support well-evidenced alcohol prevention and education programmes for under 18s.

8. Reducing the Strength of Alcoholic Beverages

8.1 Market intelligence suggests that people are increasingly looking for lower alcohol products and industry is working to improve consumer choice in this area. In March a new collective industry pledge was launched under the Responsibility Deal to remove more than one billion units of alcohol from the UK market by 2015. This will be achieved in a range of ways, such as through lowering the strength of existing brands and introducing new lower strength products.

8.2 For some time the WSTA has been working to highlight the obstacles which hinder businesses being able to develop and market lower alcohol products. For example, under the Committee of Advertising Practice’s Code, the only alcoholic drinks which may be presented as preferable because of their low strength are those under 1.2% abv.13

8.3 We welcome the statement in the Alcohol Strategy that the Government will work with the Advertising Standards Authority and others to look at the rules and incentives that might inhibit the promotion of lower strength alcohol products. We look forward to working with the Government on this matter.

9. Plain Packaging

9.1 The Government is currently consulting on the issue of plain packaging for tobacco. To consider this in relation to alcohol products effectively equates drinking with smoking, which we utterly reject. Smoking is harmful in any quantity, whereas drinking in moderation is not. This is a view shared by the Secretary for State for Health, Andrew Lansley:

“My objective is to achieve smoke-free communities; theirs [the tobacco industry] is to make a profit from selling intrinsically harmful products. We don’t have common ground. This is not like alcohol, where there is a level of responsible drinking and potential shared campaigns between Government and retailers. That’s why there is no place in the Responsibility Deal for tobacco companies. There is no responsible level of tobacco consumption.”14

May 2012