UK Sets Minimum Price for Alcohol

January 20, 2011 Updated: January 20, 2011

U.K. government plans to ban retailers from selling alcohol below cost don’t go far enough, and is a “green light for supermarkets to keep selling booze at pocket-money prices,” according to critics.

The plans would result in a can of lager costing a minimum of 38 pence ($0.61) and a liter of vodka at least 10.71 pounds ($17.13).

The government said the plans were an important first step toward banning low-cost alcohol that fuels binge-drinking and health problems.

James Brokenshire, minister for Crime Prevention, said in a statement: “We know that pricing controls can help reduce alcohol-related violent crime and this is a crucial step in tackling the availability of cheap alcohol.”

Brokenshire said that because nearly half of all violent incidents are believed to involve alcohol, “we believe it is right to tackle the worst instances of deep discounting.”

“By introducing this new measure we are sending a clear message that the government will not stand by and let drink be sold so cheaply that it leads to a greater risk of health harms or drunken violence,” he added.

But critics are complaining that the much-anticipated plan is a watered-down approach, with the minimum price being set at “cost-price,” but the cost price is defined as the value added tax (VAT) plus duty, totally ignoring production and distribution costs.

Mike Benner, chief executive of the Campaign for Real Ale (CAMRA), said in a statement, “A ban on selling beer at below duty plus VAT will have a negligible impact as supermarkets sell only a tiny proportion of beer at below these levels.

“The government’s decision to set a floor price of only 21 pence a unit is a betrayal of their previous promise to ban the sale of alcohol at below cost and means supermarkets will continue to be able to sell alcohol as a loss leader.”

Other health organizations have also said that the plans do not go far enough.

The coalition agreement between the Liberal Democrats and Conservatives stated that they would ban the sale of alcohol below cost price.

Professor Ian Gilmore of the Royal College of Physicians told BBC Radio 4’s Today program: “It’s a step in the right direction but I have to say, it’s an extremely small step. It will have no impact whatsoever on the vast majority of cheap drinks sold in supermarkets.”

Gilmore said a tiny amount of drinks were currently sold below duty plus VAT, but added that if the argument was being accepted that cheap drinks were fuelling alcohol problems, the minimum might be “eased up in the right direction.”