Cameron Plans Minimum Alcohol Price in Bid to Curb Disorder

Prime Minister David Cameron will impose a minimum price for alcohol in England and Wales that will see a standard bottle of spirits cost at least 10.40 pounds ($16.45) and a pint of beer at least 80 pence in a bid to improve health and curb crime and disorder.

Home Secretary Theresa May told the House of Commons in London today that consultations will be held with interested groups about the price to be set. Cameron’s office said the target is about 40 pence per 10 milliliters of alcohol and estimated that would cost the average drinker between 21 pounds and 23 pounds a year more than now. The semi-autonomous Scottish Parliament is already legislating to set a minimum price there.

“We all know there is a significant minority in this country who drink dangerously and who cause disproportionate harm,” May said. “Drunken brawls and disorder have made many town centers no-go areas for law-abiding citizens.” She said there’s a “need to deal with the dangerous drinkers, crack down on the irresponsible businesses and stem the tide of cheap alcohol.”

Tesco Plc (TSCO), the U.K.’s largest supermarket chain, was yesterday selling a 700-milliliter (23.7 U.S. fluid-ounce) bottle of “value whisky” for 9.97 pounds and a bottle of “value vodka” for 8.72 pounds. Both would have to cost between 10.40 pounds and 11.20 pounds under the government’s plans.

‘Cheaper Than Water’

“When beer is cheaper than water, it’s just too easy for people to get drunk on cheap alcohol,” Cameron said in an e- mailed statement. “This isn’t about stopping responsible drinking, adding burdens on business or some new kind of stealth tax, it’s about fast immediate action where universal change is needed.”

May said there were almost 1 million violent crimes and 1.2 million hospital admissions involving alcohol in 2010-11, costing the taxpayer 21 billion pounds.

She said consultations will also be held on a ban on multi- buy price promotions in stores. Other measures to crack down on binge-drinking will include a levy on late-night pub licenses to cover policing costs and a doubling to 20,000 pounds of the fine for those found persistently selling alcohol to children.

Diageo Plc (DGE), the world’s largest liquor company, described the minimum-pricing plan as “misguided” and said it would hit the poor. “There is no credible evidence from anywhere in the world that it is an effective measure in reducing alcohol- related harm,” Andrew Cowan, Diageo’s country director for the U.K., said in an e-mailed statement.

Market Reaction

Shares in drinks makers exposed to the U.K. market were broadly unchanged after the news. Carlsberg A/S (CARLA) traded up as much as 1.5 per cent in Copenhagen trading. SABMiller Plc (SAB) slid 1.2 percent in London, where the Stoxx Europe 600 Index fell 0.5 percent at 11:52 a.m.

Retailers and drinks makers including Heineken NV (HEIA), J Sainsbury Plc (SBRY) and Tesco separately pledged to cut the strength of wines, beers and ciders.

The industry will reduce the alcohol in its drinks by 1 billion units, according to the Department of Health. A unit is equivalent to about half a British pint (0.6 of a U.S. pint) of low-strength beer, a 25-milliliter measure of whisky and half a 175-milliliter glass of wine.

Companies are planning to reduce the strength of brands, introduce new lower-strength products, and “nudge” people to smaller serving sizes, according to the statement. Cutting a billion units from sales may result in almost 1,000 fewer alcohol-related deaths a year, according to the statement.

Sainsbury said it will double sales of lighter-alcohol wine and cut overall content by 2020. Heineken’s drinks will contain 100 million fewer units in the U.K.

‘Drink Sensibly’

“Cutting alcohol by a billion units will help more people drink sensibly and within the guidelines,” Health Secretary Andrew Lansley said in the statement.

Brewers including Carlsberg A/S and Anheuser-Busch InBev NV (ABI) have already cut the strength of their brands in the U.K., according to The Grocer magazine. Beermakers are seeking to maintain profitability in the declining U.K. market as the cost of production and taxes rise. The annual increase in alcohol duty in the U.K. was maintained at 2 percent above the inflation rate in Chancellor of the Exchequer George Osborne’s budget statement on March 21.

To contact the reporters on this story: Robert Hutton in London at rhutton1@bloomberg.net; Clementine Fletcher in London cfletcher5@bloomberg.net.

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net

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