Nov. 28 (Bloomberg) -- Prime Minister David Cameron announced plans to tackle binge drinking in England and Wales with a minimum 45-pence price for a unit of alcohol, raising the cost of a bottle of whisky to at least 12.60 pounds ($20.20).
The Home Office in London, starting a public consultation on alcohol pricing today, said it will examine banning multi-buy promotions, look at cutting red tape for responsible vendors and set up a new health-related objective for alcohol licensing.
The government is seeking to reduce irresponsible drinking that costs the taxpayer 21 billion pounds a year in police and medical bills, even as the drinks industry argues the proposal is a blunt instrument that does not tackle alcohol abuse.
“What we’re trying to stop specifically is very cheap, very strong alcohol, because that’s what contributes most to the terrible scenes we see in too many of our cities on a Friday and Saturday night of hugely drunk people,” Policing Minister Damian Green told BBC Radio 5.
“The reason for doing minimum unit pricing and not just increasing taxes is precisely to hit those irresponsible offerings of very cheap, very strong lager -- it can’t be right that you can buy a can of lager for 20p when a bottle of water will cost ten times that much,” Green said. “Clearly we’ve got out of kilter with this very cheap, very strong lager.”
“We believe minimum pricing is an ineffectual policy, which unfairly penalizes all consumers -- the majority of whom drink alcohol responsibly,” Andrew Cowan, country director for Britain at Diageo Plc, the maker of Johnnie Walker Scotch, said in an e-mail. The company favors “targeted intervention programs” instead, he said.
The Wine and Spirit Trade Association estimates a 45 pence minimum unit price would see 52 percent of retail prices rise, with a basic bottle of whisky going up from 10.32 pounds. There would be price rises for 71 percent of vodka, 62 percent of whisky and 38 percent of wine.
Cameron overruled Cabinet dissent to introduce the measure, according to a spokesman, who declined to be named under U.K. government rules.
The Scottish government is awaiting a ruling from the European Commission on whether its plans to introduce a 50-pence minimum price per alcohol unit breach European Union trade laws. The Scotch Whisky Association is also seeking a judicial review in the Scottish courts.
“Although the minimum alcohol pricing proposals do not raise competition-law concerns, as in Scotland, they may be susceptible to legal challenge,” Clare Thomas, head of food and drink at law firm Addleshaw Goddard LLP in London, said in an e-mail.
“If the changes affect cross-border trade in alcoholic drinks by placing imports at a competitive disadvantage, then they could breach the EU single-market legislation,” she said. “However, EU trade law provides a limited exception to the free movement of goods on the grounds of public health.”
The Home Office said in an e-mail that the measures are not designed to target responsible drinkers and are aimed at tackling alcohol-related violent crime, amounting to 1 million offenses last year. More powers will be given to pubs to stop serving alcohol to people who are already drunk and local authorities will be given further authority to limit opening hours.
A unit of alcohol is equivalent to about half a British pint (0.6 of a U.S. pint) of low-strength beer, a 25-milliliter (0.85 U.S. fluid-ounce) measure of whisky and half a 175-milliliter glass of wine.
Philip Davies, a lawmaker from Cameron’s Conservative Party who’s a frequent critic of the government, said the measures announced today “won’t make a blind bit of difference” to alcohol consumption.
“It’s nothing to do with tackling crime, it’s now the sort of ‘health sell;’ it’s wanting to impose the nanny state on us saying that they know best about what we do and they should tell us how to live our lives,” Davies told the BBC. “Alcohol consumption’s actually fallen by 11 percent since 2004 so we might have a lower alcohol consumption overall, but it won’t make any difference to binge drinkers.”
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