GOVERNMENT UNDERTAKINGS to ban the sale of cut-price alcohol in supermarkets and off-licences have been in circulation for more than three years. Rather than address health issues and curb sales, however, the last government actually reduced excise duties and made alcohol cheaper. Apart from a general VAT rise, nothing was done this week to alter that situation. But change may be on the way if commitments made to the IMF-EU troika are kept. Excise duties have been identified as key tax-raising areas for 2013.
Higher excise duties will reduce abuse levels. Research has shown that price is a key driver of alcohol consumption, particularly where young people are concerned, and prices in supermarkets are about half of those in pubs. A tax rise, in itself, will not address the broader issue of below-cost selling, loss-leader promotions and other strategies that supermarkets have been using to promote their general sales. That can only be done effectively through the imposition of a minimum price, based on the alcohol content of the products being sold, and it will require legislation.
With the drinks industry threatening litigation, the Government had better get it right. That means resisting lobbying and learning from UK and Scottish experiences. Initial legislation in Britain based a minimum price solely on VAT and excise duty rates, without taking into account the cost of production and distribution. The price was so low and the impact it had on consumption was so minuscule that the Scottish parliament introduced a minimum price per unit of alcohol.
Minister of State for Health Róisín Shortall has responsibility for promoting a new strategy here and she has spoken of the need to fix a minimum price for alcohol, in addition to excise duty. Her hand has been strengthened by the Scottish initiative, where binge drinking is even worse than it is here, and by plans within the Northern Ireland Executive to impose a minimum price per unit of alcohol there. In moving to ban below-cost selling, the Minister should also address the issue of online supermarket sales as these have been identified as a conduit for under-aged drinking.
The damage caused by alcohol abuse is all around us. Apart from its dire social consequences, the financial costs in terms of public healthcare, absenteeism and lost productivity are enormous. In the past, lobbying by supermarkets and the drinks industry brought government concessions. This time, it must be different.