|ROLLING UPDATE Alcohol strategy: trade polarised over new measures|
|Written by Gemma McKenna|
|Wednesday, 28 November 2012 12:27|
The measures proposed by government under its alcohol consultation have polarised opinion within the drinks trade, with the main trade body and producers condemning minimum pricing, while some in the on-trade and smaller merchants believe it is a good idea.
2.45pm: Denis O’Flynn, managing director of Pernod Ricard UK said minimum pricing “will be ineffective in tackling harmful consumption of alcohol and the anti-social behaviour associated with abusive drinking”. He added that it risks “distorting the drinks sector and radically changing the mix of products on offer to consumers. Lastly, it is unclear whether the MUP proposal is legal under EU law – the focus should, instead, be on improved consumer education on alcohol”.
He also branded the possible ban on multibuys a “blunt instrument”, adding that “greater flexibility should be considered to permit some price promotions”.
2pm: ACS (the Association of Convenience Stores) believes the proposed changes to alcohol rules will place a disproportionate burden on small shops.
Chief executive James Lowman said: “In the past five years, we have seen a reduction in alcohol consumption, increased consumer awareness of the risks associated with alcohol, and new positive partnerships tackling antisocial behaviour and underage drinking. New sweeping changes to licensing rules and alcohol promotions will impose burdens on business and risk
“Specifically we urge ministers not to impose the unnecessary and burdensome ban on multi-buy alcohol promotions in off licences. This measure is complex and will disproportionately harm smaller stores.
“The government should also rethink changes licensing rules, particularly arbitrary blanket restrictions on new off licences being able to open in communities. This is likely to impede growth and investment especially by small businesses.
“Ministers have made clear their determination to impose a minimum unit price. We remain concerned about the lack of detail about how this will be implemented in practice.”
1pm: Michael Saunders, managing director of Bibendum, said: “This is poorly thought out policy that will do little to solve the problems it is intended to address. It is a simplistic approach to complex problems and evidence of a government that is not listening and failing to grasp the essence of the issues. Coming on top of a 42% rise in duty over the last five years, it penalises both responsible businesses and responsible consumers. The facts show that the industry’s promotion of sensible drinking is working and overall alcohol consumption is falling. The key to success is educating consumers to ‘drink less but better’, not further restrictions on businesses and individuals.”
He sadi that since “no-one would be able to discount disproportionately”, consumers would have to spend a little bit more across the board. “It will help preserve retailer’s margins,” he added.
The Wine & Spirit Trade Association says it is “hard to understand” why the government is pressing ahead with its alcohol consultation now, especially when the proposed measures will “unfairly punish millions of consumers and businesses”.
Chief executive Miles Beale said: “There is a wall of opposition in Europe, a legal challenge in Scotland, a lack of any real evidence to support minimum unit pricing, opposition from consumers and concerns raised from within Cabinet itself.
“Minimum unit pricing and the proposed restrictions to promotions are wholly untargeted and will unfairly punish millions of consumers and businesses in the UK, while doing nothing to tackle the root causes of alcohol misuse or associated crime and disorder.
But Beale did welcome the government’s decision to consult over a 10-week period. “This avoids the busiest time of year for our members and recognises the new and contentious nature of the proposals – in particular, promotions restrictions and minimum unit pricing.
“Alcohol misuse is a serious and complex problem for a small number of people in this country. We recognise this and are committed to tackling alcohol misuse – but there is no silver bullet. A wide range of policies are required to address problem drinking, including improving education, better enforcement and building on what already works.”
Beale said that minimum unit pricing would hit the poor hardest and “do nothing to address the causes of alcohol misuse”.
He questioned why, given government figures demonstrate falling consumption since 2005, it was determined to push ahead “in the face of industry, consumer and legal opposition”.
“There is no evidence that minimum unit pricing will tackle alcohol misuse – in fact the international evidence suggests that problem drinkers are the least likely to be deterred by price rises.”
And when it comes to restricting mutibuy promotions, Beale said there was “no compelling evidence linking retailer promotions with alcohol misuse”. He added that the most recent evaluation Scotland’s multibuy ban showed that it had no significant impact on alcohol sales.
“The drinks industry is committed to tackling alcohol misuse. This idea of a promotions ban is another distraction which threatens to side-line proven and effective industry measures to tackle the problem, for example Community Alcohol Partnerships,” added Beale.
Andrew Cowan, Diageo GB’s country director, said: “This policy does not target problem drinkers- it simply hits everyone, and in particular, the vast majority of whom drink responsibly. Figures show that three quarters of all alcohol will rise in price if a 50p minimum price is implemented. The Adam Smith Institute concluded this week that minimum unit pricing is a flawed policy based on no credible evidence. Good policy should be evidence based, targeted and effective and this policy is none of these.
“There is also no evidence to suggest that a ban on multi-buy discounts will affect alcohol sales. Following the introduction of a similar ban in Scotland last year; an NHS report concluded that ‘there has been no obvious change in weekly trends of off-trade alcohol sales in Scotland after the introduction of the quantity discount ban...’. Neither of these policy proposals can be substantiated by evidence to show that they will have a positive impact on irresponsible drinking.”
According to WineNation, the impact of the new rules has led retailers to switch their promotional strategy to lowering the price of single bottles, which has attracted new consumers who may not have previously chosen wine. Consumers who bought the most wine have increased their wine purchases by 1.3% since the ban. The frequency of wine purchases by consumers defined as ‘light shoppers’ of wine has risen 34.4%. The result is that wine volumes and consumption levels have remained broadly in line with those across the UK.
Between July 2011 and July 2012, volume declined by -3.1% in Scotland as 3.2 million fewer bottles of wine were bought by Scottish households. But, in England and Wales, where there was no such ban, there was a decline of -2.8%. Therefore, given the total UK-wide trend the impact of the multibuy ban in Scotland appears to be negligible.
Paul Schaafsma, Accolade’s general manager for the UK, said: “Our WineNation Report has highlighted the importance of thorough research in devising and implementing any legislation that seeks to impact market dynamics. The restrictions imposed on alcohol retailing since the multi-buy ban in Scotland has not had the impact on alcohol sales that the Scottish government had anticipated. We urge the government to pursue policies that promote the education of consumers about their alcohol consumption, not blunt instruments that do not make any real difference.
“In line with most UK industries, what the drinks industry needs from government – north and south of the border – is smart legislation and intelligent taxation policies that promote growth, not deliver decline.”
“The proposals will mean that the multinational corporate hammerheads no longer allowed to discount their liquid cardboard to embarrassingly pathetic levels it will act to level the playing field in the off trade. Craft brewers can’t, and shouldn’t, discount their beers and sustain losses. With less of a price differential now in the off trade between industrial and craft beer it will be far easier for the consumer to trade up to awesome craft brews.”
Ted Sandbach, managing director of independent wine merchant Oxford Wine Company, which operates five shops, said he was “totally in favour” of minimu pricing, adding that it should be introduced at the “highest level possible”. Sandbach reasoned that it would restrict supermarket buying power and cut down on deals “ridiculous” deals that were attractive to younger consumers. “I hope it will be at 50p rather than 40p per unit,” he added.