Review of alcohol duty preferable to minimum pricing, says IFS

Lager and cider drinkers will be hardest hit by minimum unit prices on alcohol, a respected economic think-tank has said.

The Institute for Fiscal Studies said the 50p minimum unit price planned in Scotland would see the price of a pack of 20 cans of Strongbow cider from Tesco double from £11 to £22.

The Welsh Government is also set to introduce a minimum price and health campaigners have called for England to follow suit.

The think-tank suggested that a wider review of the “chaotic” alcohol duty system could be a better approach to tackling problem drinkers than a minimum unit price.

“Tax reform is likely to avoid the main drawback of minimum unit pricing, which is that it boosts the profits of the alcohol industry,” the body said.

The IFS analysis showed the 50p level would have a “substantial impact on off-trade alcohol prices” and between October 2015 and September 2016 some 68% of alcohol units sold were priced below the proposed floor.

The think-tank’s report said heavy drinkers “do tend to buy cheap alcohol”, suggesting a minimum unit price may be “reasonably well targeted at this group” but the policy’s impact will depend on how much the price increase puts off consumers.

The analysis showed that 86% of units of lager were currently sold below the 50p minimum price, as was 79.7% of cider.

The average unit of lager will increase in price by 43.8% while for cider it will rise by 89.5%.

Fortified wines are also expected to increase in price, with 71.5% of units sold at below the 50p rate.