24 October 2017
The Welsh Government introduced its Public Health (Minimum Price for Alcohol) (Wales) Bill on 23 October 2017
The Bill provides for a minimum price for the sale and supply of alcohol in Wales, and makes it an offence for alcohol to be sold below that price. The minimum selling price will be calculated according to a formula based on a minimum price per unit of alcohol (referred to as minimum unit price/MUP). The minimum unit price is not set out on the face of the Bill and will be specified in regulations. The Explanatory Memorandum (EM) uses a minimum unit price of 50p as an example.
Minimum pricing is a targeted measure, which aims to reduce hazardous and harmful levels of drinking. As described in the EM, the legislation would form part of the Welsh Government’s wider strategic approach to tackling alcohol-related harm. The EM states:
The ultimate objective of the Bill is to tackle alcohol-related harm, including alcohol-attributable hospital admissions and alcohol-related deaths in Wales, by reducing alcohol consumption in harmful and hazardous drinkers. In particular, the Bill is targeted at protecting the health of harmful and hazardous drinkers (including young people) who tend to consume greater quantities of low-cost and high-alcohol content products.
Main elements of the Bill
- The Bill sets out a formula to calculate the minimum selling price for alcohol. The formula proposed is minimum unit price x strength x volume.
- It will be an offence for alcohol retailers to supply alcohol below the applicable minimum selling price.
- The Bill establishes local authority-led enforcement arrangements.
- The Welsh Government must report on the operation and effect of the legislation after five years.
- The minimum pricing regime will end after six years unless the Welsh Government makes regulations providing otherwise.
Alcohol policy development in the UK has been informed by modelling work carried out by Sheffield University. In 2009, the Sheffield Alcohol Research Group (SARG) at Sheffield University developed the Sheffield Alcohol Policy Model to assess the potential impact of alcohol policies, including different levels of minimum unit pricing, for the population of England. The model has subsequently been adapted for other areas, including Scotland and Canada.
In 2014 the Welsh Government commissioned SARG to adapt the model for Wales. The Welsh adaptation of the Sheffield Alcohol Policy Model concluded that minimum unit pricing policies would be effective in reducing alcohol consumption, alcohol-related harms (including alcohol-related deaths, hospitalisations, crime and workplace absences) and the costs associated with those harms. It also suggests that MUP policies would only have a small impact on moderate drinkers. ‘Somewhat larger impacts would be experienced by increasing risk drinkers, with the most substantial effects being experienced by high risk drinkers’.
Stakeholder response to minimum pricing
There is broad support for the proposals from health professionals, the voluntary sector and academia. Much of the opposition to minimum pricing is from stakeholders representing the alcohol industry and retailers.
Concerns about the introduction of a minimum pricing policy have included the following, and it’s likely some of these will be raised during the Assembly’s scrutiny of the Bill:
- whether there is sufficiently robust evidence demonstrating the link between price and alcohol consumption/harm;
- how targeted the policy actually is, for example whether the modelling underestimates the impact on moderate drinkers, and the extent to which heavy drinkers are responsive to price;
- the alcohol industry’s response to a potential windfall in profits as a result of increased prices, and whether this might undermine the policy intentions of the legislation;
- whether there may be an increase in cross-border and illicit trade;
- whether minimum pricing will disproportionately affect low income groups.
Sheffield’s modelling work suggested that low-income drinkers may have the most to gain from the proposals, because of the anticipated reduction in levels of consumption and the associated health benefits. This is also noted in the Bill’s Equality Impact Assessment, although the need to ‘monitor and mitigate’ any potential adverse impacts of minimum pricing on households living in poverty and vulnerable groups is highlighted.
And while the Bill aims to reduce alcohol consumption among hazardous/harmful drinkers (i.e. those who drink more than recommended guidelines and are at risk of harm), it’s not clear what impact the policy might have on those who are chronically dependent on alcohol.
The benefits of introducing the minimum pricing proposals in Wales are estimated at £882m over a 20 year period. This is based on a minimum unit price of 50p, and reflects the total societal value of the reduction in alcohol-related harms including direct healthcare costs, crime costs, workplace absenteeism, and a financial valuation of the health benefits.
The costs of the legislation mainly relate to administrative costs to the Welsh Government and compliance costs for retailers (as set out in the Regulatory Impact Assessment (RIA) – see from p62 of the EM). Although local authorities will be responsible for enforcing the minimum pricing regime, enforcement costs are not quantified in the RIA but are ‘anticipated to be low’. Enforcing the legislation is expected to be undertaken within the existing inspection regime.
Similar legislation in Scotland received Royal Assent in June 2012 but has not yet been implemented due to a legal challenge led by the Scotch Whisky Association. The main basis for the challenge is that minimum pricing may contravene EU law by impacting on trade and free movement of goods. The case was most recently heard in the Supreme Court. The Supreme Court’s ruling will be final, and the judgment is currently pending.
The UK Government has previously consulted on minimum pricing, but concluded that there was insufficient evidence at the time to demonstrate that it would be an effective measure (July 2013). In February 2017, the UK Government said that the introduction of minimum unit pricing ‘remains under review pending the outcome of the legal case between the Scotch Whisky Association and the Scottish Government, and the impact of the implementation of this policy in Scotland’.
Article by Philippa Watkins, National Assembly for Wales Research Service