Minimum alcohol price will raise cost by up to 90% in Scotland – study

The Scottish government’s 50p minimum unit price for alcohol, which comes into force on 1 May 2018, will have a dramatic impact on prices, according to the Institute for Fiscal Studies.

Some cider products will rise in price by as much as 90%, according to the IFS briefing note, which also found prices would increase across all alcohol types. The price of a 20 x 440ml pack of Strongbow would double, while a bottle of Tesco cream sherry would increase by 20%.

The minimum pricing policy, which comes into force after a five-year legal battle between the Scottish government and the Scotch Whisky Association, is intended to stop the sale of cut-price, high-alcohol drinks such as cider.

The IFS found that almost 70% of the alcohol units bought in supermarkets and off-licences across the UK between October 2015 and September 2016 were priced below 50p per unit. With a 50p minimum unit price, the cost of these products would increase on average by at least 35%, with lager and cider most affected.

The per unit price of cider products currently priced below 50p would rise by 90%, while for lager the equivalent would be 44%. The majority of wines and spirits are also currently priced at less than 50p per unit, but alcopops would be unaffected because almost none are sold below that unit price.

Last month, the Scottish government’s health secretary, Shona Robison, told Holyrood it had been estimated that a minimum price of 50p would cut the number of alcohol-related deaths in Scotland by 392 in the first five years and reduce hospital admissions by 8,254 cases.

The IFS also found that minimum unit price was reasonably well targeted at problem drinking, because heavy drinkers tended to purchase the kinds of cheaper, stronger alcohol affected by the new pricing policy.

Martin O’Connell, an associate director at the IFS and co-author of the briefing note, said: “Heavy drinkers are more inclined to buy cheap units, so this suggests a minimum unit price may well be reasonably well targeted at this group. However, the impact of the policy will depend crucially on the price sensitivity of different types of drinkers, and how much less alcohol they consume in response to a rise in price.”

He added: “Minimum unit pricing is not the only policy that a government has at its disposal. We also show that heavier drinkers tend to buy stronger alcohol, suggesting that redesign of the current system of alcohol excise duties could also help target problem drinkers. Tax reform is likely to avoid the main drawback of minimum unit pricing, which is that it boosts the profits of the alcohol industry by creating a price floor.”

The introduction in Scotland of minimum pricing, which was declared legal under EU law by the UK supreme court in November, comes as the Welsh government consults on the policy, fuelling fears among the whisky industry that minimum pricing in the UK will increase the likelihood of higher tariffs imposed on whisky exports, hitting sales.