Drinkers ‘will stock up’ after prices ruling
SCOTS are set to stockpile alcohol ahead of the introduction of minimum pricing, a report warns today.
A Scottish Government plan to set a minimum 50p price per unit of alcohol sold in shops was deemed legal at the Court of Session last month, paving the way for an increase in cost.
A study by market researcher Nielsen has found the judgment would lead to the ‘inevitable stockpiling’ of alcohol – which could well mean ‘a bumper Christmas for alcohol retailers’.
But it also found that at least 50 per cent of alcohol sold north of the Border will not be affected by the legislation, raising questions over the law’s effectiveness.
Nielsen, which looked at alcohol sales in about 1,200 Scottish stores, said spirits will be the ‘most impacted’ as 69 per cent is currently sold below the 50p per unit
‘Inevitable stockpiling’
threshold. Beer is next – with 67 per cent below the threshold – followed by cider (51 per cent ), while only 3.4 per cent of wine sales will be affected.
Marika Praticó, senior client manager at Nielsen, said: ‘Wine is, by far, the least impacted and so has the most to gain from minimum pricing. Overall, wine will need to raise prices by the least amount. Thus, it becomes more affordable relative to other alcohol.’
Blended vodka and Scotch are the two categories which will be affected most by minimum pricing.
Blended Scotch ‘will require prices to rise 20 per cent to meet the threshold, while vodka requires a 16.3 per cent rise’, Nielsen said.
A long-running legal battle by the Scotch Whisky Association against minimum pricing was rejected by judges in Edinburgh last month. But Nielsen said enforced price rises were not necessarily bad for the spirits industry, claiming they could result in higher revenue, as long as demand does not fall beyond a certain ‘tipping point’.
The analysis also raised ‘potential implications of minimum pricing legislation on retail behaviour’.
As with wine, premium brands, particularly in spirits, are likely to benefit as the price difference between them and cheaper brands would be smaller.
This would mean it may be a good time for people to ‘trade up’ to the more expensive brands, which could hit supermarkets’ own-brand sales. There could also be more cross-Border alcohol shopping ‘mirroring what many Britons do with the annual Calais run’.
The judges’ decision to support the minimum pricing legislation – which will lead to a minimum price of £14.99 for a bottle of spirits – comes after five years of legal wrangling.
Ministers say the flagship law will cut alcohol-related deaths but there is no date for the introduction of the policy. Responding to Nielsen’s findings, Public Health Minister Aileen Campbell said: ‘Minimum unit pricing is the most proportionate and effective way to reduce the harm caused specifically by cheap, high-strength alcohol.’
She added: ‘It is only one of the measures we are implementing to reduce alcohol-related harm.’
Scottish Tory health spokesman Donald Cameron said: ‘This legislation is designed to address Scotland’s damaging and complex relationship with alcohol, but if it proves to have little effect then it’s important we repeal it.’