How will minimal alcohol pricing affect the hospitality industry?

Introducing a minimal price for alcohol seems to be an idea that has been around for ages, without ever actually being implemented.

But following the recent introduction of a minimum price in Scotland, it looks like the rest of Britain is about to follow suit, with the government set to make the final adjustments to its alcohol pricing strategy following the conclusion of a Health Select Committee review earlier this summer.

However, while minimum alcohol pricing has been supported by those in hospitality careers, there is still a great deal of uncertainty over what impact it will have on pubs, bars and other licensed premises, as well as debate as to whether or not it will actually help to significantly reduce alcoholism or binge drinking.

It is yet to be decided exactly what minimum price will be set for alcohol, but there is a suggestion that 40p per unit is the most likely candidate, while there could also be a ban on the multibuy deals frequently offered by supermarkets.

At such low levels, a minimum alcohol price is likely to be mainly targeted at supermarkets and off-licences and have a much smaller effect on pubs, bars and clubs, which generally sell drinks for much more, and this was a point stressed by government when it first proposed a minimum unit price in March this year.

This led to the idea receiving tentative support from hospitality industry groups such as the Association of Licensed Multiple Retailers (ALMR), which said at the time: "We are pleased that the government has finally woken up to the fact that it is the plethora of pocket money priced alcohol and unregulated supermarket sales which are the real problem".

It added: "With 70 per cent of alcohol now bought and consumed at home, punitive measures against pubs and bars will not deliver the government’s public policy objectives on health and crime and disorder."

However, this week saw the ALMR adopt a different tone after it emerged that the government could link alcohol pricing to inflation.

In its response to the Health Select Committee's report, the government said: "A minimum unit price should be effective over a sustained period and recognises that there are different ways by which this could be achieved, for example by linking the minimum unit price to inflation."

This led the ALMR to warn that such an approach could place an extra burden on pubs and bars, damaging profits and lowering hospitality employment and accused the government of "moving the goal posts".

"Pubs are already penalised by annual above inflation increases in the alcohol excise duty escalator, which has seen pub prices soar over the past five years and we need a second annual price increase like a hole in the head," said the group's strategic affairs director Kate Nicholls.

But not only are there questions over how minimum pricing will affect businesses, there is also a debate over how successful it will be in reducing binge drinking and alcoholism.

The ALMR argues that, while minimal pricing is a useful tool, it must be introduced within a framework of wider measures aimed at tackling alcohol abuse, such as better education and treatment options for alcoholism, and encouraging people to drink in pubs and bars rather than at home.

This is a position shared by the British Beer and Pub Association, whose chief executive Brigid Simmonds commented: "In recent years, we have seen alcohol policy aimed squarely at pubs, when more and more drinking is done at home. Government policies should be designed to encourage responsible drinking of low-strength drinks like beer, in the sociable environment of our pubs."

However, whether minimum pricing has an impact or not, one thing is clear, contrary to the suggestion of many media reports, alcohol abuse is already in decline in the UK.

Figures from the Office for National Statistics show that the quantity of alcohol Brits say they drink has fallen by 20 per cent between 2001 and 2009, while so?called dangerous or heavy drinking is down by about a third.

And the drinks and pub industry is entitled to take a fair amount of credit for this trend, says Ms Simmonds.

"Over 90 per cent of bottled or canned beers in Britain have unit information on the packaging. And from 2013, these will display not just alcohol unit labelling, but also government lower-risk drinking guidelines and a pregnancy warning," she said.

"The BBPA and Drinkaware are also working together on a unit awareness campaign for pubs as part of the Responsibility Deal, with materials being rolled out across the on-trade to inform customers of the amount of units in their favourite drinks."

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