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Aug 17, 2004
Does anyone have to hand the 'look, minimum pricing is a good thing, if you disagree you Do Not Properly Understand'
effortpost? Would be useful in a discussion I'm having. Thanks!
Ask and thou shalt receive.
So, you've just read about the plan of Alex Salmond/Nicola Sturgeon/David Cameron (delete as appropriate) to introduce
minimum pricing on alcohol and you've got your knickers in a twist of righteous anger about the obvious middle-class
conspiracy to rob you of your precious life giving toxic, dependence inducing teratogenic and carcinogenic drug, alcohol.
STOP! Yes, you, stop right there!
You see, we've been here before. Possibly not you and me, but this thread. Back in 2009; and 2010; and 2011. Back when
the thread and this discussion was not even raoul moatly funny.
The veterans of this argument are tired of it, those of us in favour of it are tired of pointing evidence and facts to back up our
position; and we're also tired of those who oppose it calling us liberals, facists, and snobs who hate poor people. It's
tiresome and gets us nowhere. Those who can be persuaded already have been and those who can't be persuaded can
This post is for those who haven't made their minds up.
What is minimum pricing?
A very good question. I'll begin by saying what it isn't. It isn't a way for the middle classes to fuck over poor people; in fact
minimum pricing will disproportionately benefit (in terms of health) people from disadvantaged backgrounds.
Minimum pricing is the idea that ethanol, the alcohol in alcoholic drinks that make them alcoholic, should have a unit price.
In Scotland the SNP want that price to be 50p per unit, and David Cameron wants it to be 40p per unit.
What's a unit and how does that factor with ABV and proof?
In the UK (a ROI unit is different) a unit of alcohol is 10ml of pure ethanol. So a litre (1,000 ml) of wine with an ABV (alcohol
by volume) of 10% is 10% alcohol and thus has 100ml of pure ethanol in it, diluted by the rest of the wine. It thus has 10
units. A 75cl (750ml) bottle of vodka that is 40% alcohol has 300ml of pure ethanol in it and thus has 30 units.
Proof is no longer used in the UK. Historically it's a Royal Navy term to describe the strenght of a drink (specifically rum). If
the rum was 100 proof it had sufficient alcohol in it that when poured on gunpowder it did not stop the gunpowder igniting. If
it did it was termed "under-proof" because it did not prove sufficiently strong. If you're interested the calculation is 7/4 * ABV.
So 100 proof has an ABV of about 57.14% and 40% ABV vodka is 70 proof.
Proof has no bearing on this issue, while ABV and units do. Additionally, for the calculations in this post I shall be using 50p
per unit (this preferred by most medical authorities).
How is minimum pricing different to taxes?
It's very different, most specifically in how it affects price.
A consumption tax adds to the cost of something. For example, VAT which is currently at 20%. This adds 20% of the price
of a good onto the price paid at the till by the consumer. So if something is £3, a consumer pays £3.60 of which 60p goes
not to the shop but to the treasury. Current alcohol taxes are (as of 28 March 2011) quite complicated but if you want to
read them then they're here at HMRC
We can work out how much tax should be added to spirits easily if we know the ABV. The calculation for spirits is as
Tax payable = (Tax rate * (ABV/100)) * (size in ml / 1000)
For 70cl of 37.5% vodka the tax payabe is £6.70. "But wait!" I hear you cry. "Surely that can't be. I can buy a bottle of vodka
of that size and that strength from Asda for £8.72. Surely the base price of 70cl of vodka can't be £2.02!?"
Ah-ha! You've come to the core reason why alcohol taxes do not necessarily raise prices. Alcohol can be used as a loss
leader. For instance, Asda could lose money on the sale of every bottle of vodka but make it back on the sale of crisps or
nuts or anything. In other words, the marginal cost in tax of an item doesn't need to be passed to the purchaser. It usually
is, in the case of VAT, but doesn't need to be.
Not so with minimum pricing. That vodka has 26.3 units in it. At 50p per unit it must cost £13.15. It would be illegal for it to
be sold for any less. £7.18 of that would still be payable in tax, but the vodka could no longer be sold as a loss leader. Its
increase in price would discourage purchase in a way that an increase in tax would not because it could not be absorbed by
the seller. In actuality it isn't the supermarkets that absorb the tax increases, it's the drinks manufacturers.
So you want booze to be more expensive?
Basically yes. But only certain booze. Let's be clear, the majority of alcoholic drinks would be unaffected by this law. The
price of a pint in a pub won't go up. This is not a price added onto the tax payable or the basic price, it is a price floor under
which the price could not sink. If the price of the drink is already above the minimum price, it won't go up any further
because the basic principle of the ethanol content costing 50p per 10ml would already be met
To give some examples, again from Asda
---------------------Own brand cheap vodka
Highland Park 12yr Scotch
Cheapest white wine
Wine of Australia White wine
Carlsberg (4 440ml cans)
Fosters (20 440ml cans)
* not on sale
As you can most of the changes of premium or named brands are not significant. The crate of Fosters would cost £1.62, a
rise of 10%. The bottle of Smirnoff would cost £1.15 more, again about a 10% rise. The biggest rises will be on spirits,
stronger wines and cheap cider. To give a comparison, these artisan ciders available from the Bristol Cider Shop won't be
---------------------Ross on Wye Alpaca Dry
Gwatkin Kingston Black
Newtons Autumn Harvest Perry
Hecks Blakeney Red Perry
Hecks Blakeney Red Perry
As you can see, it's only when you start to buy massive quantities (20l is about 35 pints) that you start to see large
Minimum pricing is an effective way of ensuring that the price of ethanol is not absorbed as a loss leader (as a tax can be)
and it sets a price floor for the price of the ethanol in a drink.
Surely an increase in price would hit poorer people harder than richer people?
Possibly. It depends upon proportion of disposable income spent on alcohol. For instance a British Association for the
Study of the Liver (BASL) study has shown that actually professional groups drink more than poorer groups but, and here's
the important bit, the health of poorer groups are more effected by alcohol.
BASL pointed out that alcohol-related ill health and mortality was very strongly linked to socio-economic status,
with the most deprived experiencing between a three and five fold increase in death rates (health statistics
quarterly 33) compared to the most privileged. For any level of drinking, lower income groups suffer more. The
organisation argued that given the strong link with socio-economic status, one would predict that changes in
the affordability of alcohol over time would have had the most impact on death rates in the poorer sections of
society, which is what happened to liver death rates between 1991 and 2001. We know that professional
groups drink more than lower income groups but, astonishingly, as the figure below shows, lower income
groups suffer far more from liver disease. In the 1990s as price fell and consumption increased, liver disease
increased among more deprived social groups but fell among the 'higher' social classes. Alcohol duty increases
can therefore be predicted to reduce mortality in those lower socio-economic groups most at risk.
Why do we need it?
Here I bow to greater minds and point you to the following peer research:
In particular, however, I would like to quote this Parliamentary report, which reiterates much of what I have said above:
309. Minimum pricing has recently had a number of powerful supporters including the CMO. While much of the
alcohol industry and most supermarkets were against, there was some support for minimum pricing from
Tesco, Molson Coors (makers of Carling lager) and CAMRA.
310. The main arguments for preferring minimum pricing to rises in duty are:
Supermarkets will not pass on the full rises in duty to customers; they will get the drinks industry to
absorb them; in contrast, this could not happen with minimum prices. As a result, supermarket and
other off-licence sales would be much more affected than pub sales; thus minimum pricing could help
Minimum prices would be particularly effective in raising the price of the cheap alcohol; this would be
particularly effective in reducing consumption by heavy drinkers in low income groups and young binge
Minimum pricing would encourage people to buy weaker alcohol.
311. We have seen that supermarkets aggressively promote alcohol to attract customers; supermarkets even
sell alcohol below the cost of the duty; thus raising the duty would not necessarily lead to higher
312. Traditional pubs have lost custom for years. Rises in duty hit them; minimum prices would not
since most pubs sell alcohol at a higher price than the any minimum price which has been
proposed. For this reason CAMRA supports minimum pricing. Mr Benner, the Chief Executive of the
organisation, told us:
"I think the price ratio at the moment is about five to one (ie the ratio of the off-sale to the on-sale price). If a
minimum price of around 40 pence was introduced, that would make the ratio about three to one. Therefore, I
think that is enough for there to be a shift in consumption towards drinking in community pubs."
313. While most pubs would benefit, some pubs and clubs, such as those which offer 'Happy Hours' and
special promotions, would be affected. The Sheffield study found that the greatest impact on crime and
accident prevention would be achieved through reducing the consumption of 18-24 year old binge
drinkers, by raising the cost of cheap drinks in pubs and clubs and by reducing off-licence sales which
encourage pre-loading. Off-licence sales can be very cheap with alcohol being sold for as little as 15 p
per unit in some outlets.
314. BASL pointed out that alcohol-related ill health and mortality was very strongly linked to socio-economic
status, with the most deprived experiencing between a three and five fold increase in death rates (health
statistics quarterly 33) compared to the most privileged. For any level of drinking, lower income groups suffer
more. The organisation argued that given the strong link with socio-economic status, one would predict that
changes in the affordability of alcohol over time would have had the most impact on death rates in the poorer
sections of society, which is what happened to liver death rates between 1991 and 2001. We know that
professional groups drink more than lower income groups but, astonishingly, as the figure below
shows, lower income groups suffer far more from liver disease. In the 1990s as price fell and
consumption increased, liver disease increased among more deprived social groups but fell among the
'higher' social classes. Alcohol duty increases can therefore be predicted to reduce mortality in those
lower socio-economic groups most at risk.
Figure 18: Changes in age standardised liver mortality rates (deaths / million) according to socio-economic
Age standardised alcohol mortality rates according to social class for 1991 -3 (1) when socio-economic status
was assessed by social class, and again for 2001-3 (Health Statistics Quarterly no 38) by which time socioeconomic status was assessed by NS-SEC groupings—hence the different x axes in the graph.
315. According to the Sheffield study, a minimum price of 50p per unit would save over 3,000 lives per year,
 a minimum price of 40p, 1,100 lives.
316. Minimum pricing would encourage people to buy weaker alcohol; for example, at a minimum price
of 40p a 70cl bottle of 10% abv wine could sell for £2.80, of 12% wine for about. £3.40 (8.4 units), of 15%
wine, about .£4.20p.
317. Opponents of minimum pricing argue that it would be illegal under EU competition law. The Scottish
Government, which has examined this issue thoroughly, strongly disagrees and EU Competition Law does
provide for a public health exemption. This exemption has been successfully used by the French Government
to ban alcohol advertising and sponsorship in certain circumstances, winning a number of cases in the ECJ
which were brought by the alcohol industry.
318. The DH memorandum to this inquiry stated that the Government had made no decision about minimum
pricing. However, when the CMO's report which advocated minimum pricing was leaked, a Government
representative rejected minimum pricing.
But the Brits have always drunk too much?[/u]
Really. That's not actually based in historical fact. Sorry.
Like the myth that the English have always been drunk, the contrast between English drunkenness and
civilised Mediterranean habits may also be something of a myth
While the wine drinking countries of Southern Europe always had historically very high levels of liver deaths
from alcohol related cirrhosis, deaths in these countries have been dropping whereas UK deaths are still rising
inexorably. The UK finally overtook Spain, Italy and France for liver deaths in 2004.
The fact that alcohol has been enjoyed by humans since the dawn of civilization has tended to obscure the fact
that it is also a toxic, dependence inducing teratogenic and carcinogenic drug to which more than three million
people in the UK are addicted. The ill effects of alcohol misuse affect the young and middle aged. For men
aged between 16 and 55 between 10% and 27% of deaths are alcohol related, for women the figures are 6%
(T)he 18th-Century gin craze was linked to the government's encouragement of gin production and restriction
of brandy imports; the rise in consumption in the 19th Century was associated with rising living standards.
Measures included shorter opening hours, higher duties on beer, and significant reductions in both the
production and strength of beer. The amount of beer consumed in 1918 was nearly half of the pre-war total,
despite rising incomes, and arrests for drunkenness in England and Wales fell from 190,000 to 29,000 between
1913 and 1918.
"It is not inevitable that per capita alcohol consumption should be almost three times higher than it was in the
middle of the 20th Century or that liver disease should continue to rise. Nor is it inevitable that at night town
centres should be awash with drunks, vomit and disorder. These changes have been fuelled by cheap booze, a
liberal licensing regime and massive marketing budgets.
Thank you, and good night.