Ministers welcome Scottish judgement on minimum pricing of alcohol Public Health (Alcohol) Bill before Seanad next week
Minister Simon Harris & Minister of State Marcella Corcoran Kennedy have welcomed the Scottish Court of Session ruling in favour of the Scottish Government’s proposals to introduce minimum pricing for alcohol (MUP).
Minister Corcoran Kennedy stated, “I welcome the Scottish Court judgement that alternative measures, including increases in taxation, are not capable of protecting life and health as effectively as minimum pricing.
“We know that MUP is a proportionate measure that will effectively target the widespread access to alcohol that is very cheap relative to its strength and therefore included a minimum unit price in the Government’s Public Health ( Alcohol) Bill.
“The measure is based on the evidence that harmful drinkers are particularly likely to consume drinks which are cheap in proportion to their alcoholic strength – in other words drinks which deliver a lot of alcohol for a low price. This was backed up by research conducted by Sheffield University which showed that MUP changes behaviour in those most at risk. MUP is targeted at those who have a harmful alcohol consumption pattern.
“Minimum unit pricing for alcohol is just one of a number of measures included in this Bill. The other provisions include, health labelling of alcohol products, the regulation of advertising and sponsorship of alcohol, the separation of alcohol products in mixed trading outlets and the regulation of the sale and supply of alcohol in certain circumstances.
“I am looking forward to bringing this legislation forward in the Seanad and will be meeting with members across all parties on Tuesday to address any outstanding issues they may wish to raise. I understand there are some concerns and I want to listen to and work with Oireachtas colleagues on all sides to progress this important public health measure. I believe any concerns can be allayed and any misunderstandings clarified and I hope that we will move forward in a spirit of consensus to pass this landmark piece of legislation into law.
“The Bill was initiated by the last Government and is a priority for this Government. The measures underwent pre legislative scrutiny and were supported by the Joint Oireachtas Committee on Health and Children. The most recent Healthy Ireland survey was yet more evidence that Ireland has a problem with alcohol and that we need to take action.”
Minimum Unit Pricing
Addressing the price of alcohol is an important component of any long-term strategic approach to tackling alcohol misuse. The price of alcohol is directly linked to consumption levels and levels of alcohol related harms and costs i.e. as the price increases, consumption rates and harms decrease.
The MUP provisions in the Public Health (Alcohol) Bill are part of a comprehensive suite of measures to reduce excessive patterns of alcohol consumption and the harms caused by the misuse of alcohol as noted in the Report of the Steering Group on a National Substance Misuse Strategy, 2012. The aim is to reduce alcohol consumption in Ireland to 9.1 litres per person per annum (the OECD average) by 2020, and to reduce the harms associated with alcohol.
The Public Health (Alcohol) Bill provides for it to be illegal to sell or advertise for sale, at retail level, alcohol products at a price below a set minimum price. Minimum Unit Pricing (MUP) sets a minimum price per gram of alcohol. The minimum price of an alcohol product is based on the number of grams of alcohol in the product. Alcohol cannot be sold below this minimum unit price in either the on trade sector (e.g. pubs, restaurants) or the off trade sector (e.g. supermarkets, off-licences).
What is the MUP?
The Minimum Unit Price is set in the Bill at 10c per gram of alcohol. The Minister can increase the Minimum Unit Price three years after commencement and every 18 months thereafter, following a review.
How is the Minimum Price calculated?
The minimum price of an alcohol product is calculated using the formula
A x B = C
A is the minimum unit price per gram of alcohol
B is the number of grams of alcohol contained in the alcohol product, and
C is the minimum price of the alcohol product.
B is calculated as follows:
Volume of Alcohol Product X ABV of Alcohol Product X 0.789
0.789 is the density of alcohol at 20o Celsius
500 ml Can of Beer @ 5% ABV
B = Volume of Alcohol Product X ABV of Alcohol Product X 0.789
B= 500 X 5% X 0.789
B= 19.725 Grams
A x B = C (Minimum Price)
€0.10 x 19.725 = C
C = €1.97
Minimum Price 500ml can of beer (5%ABV) = €1.97
Minimum Price 750ml bottle of wine (12.5%ABV) = €7.40
Minimum Price 750ml bottle of whiskey (40%ABV) = €23.67
Why is it needed?
How affordable alcohol is to the average consumer is an important component in tackling alcohol abuse. The price of alcohol is directly linked to consumption levels and levels of alcohol related harms and costs i.e. i.e. as the price of alcohol increases, consumption rates and harms decrease.
Is alcohol not ‘taxed’ enough already?
Despite Ireland having relatively high excise duty rates, the price of alcohol remains relatively affordable, particularly in supermarkets. A woman can reach her low risk weekly drinking limit for just €6.30, while a man can reach this weekly limit for less than €10 (Alcohol Action Ireland, Pre Budget Submission 2014).
Why not raise excise rates or ban below cost selling?
The University of Sheffield study found that a ban on below-cost selling (implemented as a ban on selling alcohol for below the cost of duty and Value Added Tax) would have a negligible impact on alcohol consumption or related harms. Banning below cost would be difficult to implement, monitor and enforce. MUP is easier to understand measure and enforce than a ban on below cost selling.
Further increases in excise rates would render premium and higher-priced alcohol more expensive, which is unnecessary for the purpose of targeting hazardous and harmful drinkers – who purchase larger quantities of cheap alcohol. A tax increase would not necessarily have the same effect as a compulsory minimum price, because of the possibility that taxes would not be passed on in full. However, MUP prevents large multiple retailers from absorbing increases in excise rates and from using alcohol as a loss leader.
Who will it affect?
Minimum unit pricing is a targeted measure designed to prevent the sale of alcohol at very cheap prices. It is aimed at those who drink in a harmful and hazardous manner (i.e. the heaviest drinkers and young people). MUP is able to target cheaper alcohol relative to its strength because the minimum price is determined by and is directly proportional to the amount of pure alcohol in the drink. Minimum unit pricing will have a substantial impact on alcohol consumption for high risk drinkers. It will only have a small impact on the alcohol consumption of low risk drinkers.
Is this a further tax on the poor?
The University of Sheffield study found that minimum unit pricing would have larger impacts on those in poverty, particularly harmful drinkers in poverty. However, those in poverty were also found to experience substantial health gains. Reducing alcohol harm will have a positive effect on health inequalities in Ireland as people from disadvantaged communities suffer a disproportionate amount of alcohol harm.
Will it increase the price of all alcohol products?
Minimum unit pricing is not expected to affect the price of alcohol in the on-trade (e.g. pint of beer in pub, bottle of wine in a restaurant). The alcohol products most affected by this policy are those that are currently being sold very cheaply, often below cost prices, in the off-trade, such as supermarkets (e.g. slabs of cheap lager, cheap cider).