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Guy Woodward: Alcohol - the elephant in the cellar

Published:  27 July, 2017

Throughout my time around the wine trade, one fundamental aspect of its make-up has been constantly swept under the carpet. Alcohol. I have seen members of the trade battle addiction issues; engage in drink-driving, embarrass themselves through over-indulgence. And that’s before one turns to the damage wreaked in wider society. Yet never have I heard the topic discussed at any length or in any depth; we’d sooner spend hours debating terroir and tartaric acid.

I can only conclude that the reason for this reticence is guilt, born of the knowledge that the wine and spirits trade is in the business of manufacturing and selling a product that kills people. Think I’m being melodramatic? Consider this. Alcohol misuse is the biggest risk factor for death, ill-health and disability among 15-49 year-olds in the UK; the malaise is estimated to cost the NHS £3.5 billion a year. In 2015, there were 8,758 deaths in which alcohol was the primary cause; that’s 24 a day.

Against this backdrop, the Supreme Court recently met to deliver a final verdict on the Scottish parliament’s plan to introduce a 50p minimum unit price for alcohol. The legal battle has been running for years, and the sole reason the measure isn’t already on the statute book is the opposition of the drinks industry, notably the Scotch Whisky Association (SWA). Laughably, the SWA argued in court that tax was a fairer way of tackling alcohol abuse in deprived areas; four months ago it was bemoaning tax rises as ‘damaging’, ‘a major blow’ and something that ‘distillers will find it hard to understand’. In response, the Scottish government claimed that minimum pricing is clearly targeted because it focuses on excessive consumption of cheap booze, which is disproportionately bought by hazardous drinkers.

If the law lords pass the bill (as I write, the court has retired to consider its verdict), Scotland will become the first of the home nations to do so. Wales is set to follow suit, while Northern Ireland has expressed interest in doing the same. Then the pressure will turn to Westminster.

By chance, two days before the chief justices gathered in Parliament Square, a group of senior medics and health charities released a report claiming more than 60,000 people in England will die from problems linked to heavy drinking over the next five years unless ministers tackle the scourge of cheap alcohol. It called on the government to bring in minimum pricing to tackle this “public health crisis”.

“We have seen very little [government] action to prevent liver disease, one of the top causes of avoidable deaths,” said Katherine Brown, director of the Institute of Alcohol Studies. “Billions of pounds are spent each year [on combatting alcohol-related issues]. The evidence is clear: raise the price of the cheapest alcohol to save lives and money.”

The report’s calculations have it that, if a 50p minimum unit price were introduced in England (home to an estimated 595,000 alcoholics) within five years it would mean 1,150 fewer deaths due to drink, 74,500 fewer hospital admissions, a £326m saving to the NHS and a £711m drop in the value of alcohol-fueled crime.

That, to my mind, seems worthy of focusing industry minds. Yet for the most part, the response has been silence. The WSTA remains officially opposed to minimum pricing; among the reasons cited is that ‘it has never been tried’ and is ‘inconsistent with the operation of the free market in the EU’. I would love to hear a law lord’s response to such arguments. As for the WSTA’s claim that minimum pricing ‘would result in considerable costs to businesses’, through ‘complex and costly new systems’, even the SWA admits the extra income will go largely to producers and retailers.

If Scotland goes ahead, the WSTA’s support of lower priced alcohol won’t look great. But the WSTA is in the tricky position of having to represent both the wine and spirits industry. Under minimum pricing, the cheapest wine would retail at £4.69. Wine’s average price in the UK has already broached £5.50; sales of cheap plonk have plummeted – Blossom Hill by 17.5%, Lindeman’s by 30%. As Helen Stares of market research firm Nielsen says: “People are drinking less, but they’re drinking more premium products.” So what’s the problem? Well, look at whisky, with its average bottle price of £12.90 (of which £10.20 is tax, meaning the average amount spent on packaging, transport, marketing, margins and – did I forget anything? oh yes, the whisky – is a risible £2.70). Under minimum pricing, a bottle of whisky would cost at least £14, hence the SWA’s concern.

From my vantage point, the WSTA’s position representing both industries is invidious; certainly the wine trade’s aspirational ambitions are not being helped by association with the SWA’s shabby stance. So what will the WSTA opt to do? Either way, it would be best advised to formulate a stance sooner rather than later. Continuing to ignore the issue in the hope that it goes away isn’t going to work.