Two new analysis relating to alcohol pricing effects have been published as a decision on Scotland's Minimum Unit Pricing (MUP) is anticipated within a matter of months. A provisional timetable indicates the Inner House of the Scottish Court of Session could rule to implement MUP by the 8th June 2016.
Further Sheffield analysis on pricing and taxation effects
An updated analysis of the modelled impacts of MUP in Scotland has been produced by the Sheffield Alcohol Research Group (SARG), including modelled effects of tax increases - full report here [pdf]. Commissioned by the Scottish Government, it says to achieve an equivalent reduction in alcohol-related deaths amongst hazardous and harmful drinkers as a 50 pence MUP, a 28% increase in alcohol taxation would be required.
The MUP versus taxation question became particularly crucial following the European Court of Justice ruling that the Scottish courts could decide to implement it if 'proportionality' can be proved; essentially that the aims of MUP cannot be better achieved by taxation rises.
However the recent Sheffield analysis finds some important likely differences in using a 50 pence MUP versus a 28% taxation rise, particularly owing to the more targeted nature of MUP. Whilst tax rises theoretically affect all drinkers, the modelling finds MUP targets harmful (or 'higher risk') drinkers far more than moderate or hazardous drinkers. MUP particularly targets harmful drinkers in poverty, which from a health inequalities view may be favourable given these drinkers experience far higher rates of alcohol-related harms than other groups. As such, to achieve the same effect as a 50 pence MUP on alcohol-related death rates of harmful drinkers in poverty, a 70% tax rise would be required.
Predicted changes in spending would also be different. Overall spending changes would be expected to be 'modest' under MUP, but would be more significant and result in spending increases amongst all groups under a 28% tax rise. Tax rises also present other issues, such as how retailers and spenders might respond. Previous research has suggested some retailers respond to tax rises by absorbing costs on cheaper products, but compensate by increasing prices of more expensive products. Retailers have periodically come under fire from public health groups who have called for MUP to prevent 'loss-leading', whilst some producers have absorbed tax rises on certain drinks.
The Scottish Government and MUP supporters may well feel the report provides the rationale for supporting MUP as a more 'proportionate' tool to achieve the desired public health gains. However tax would still be considered an important part of the pricing picture; as has been stated before, both have significant potential affects on pricing and consumption. Health advocates may feel industry interests have been put first over recent taxation changes - they will be hoping the same interests do not scupper MUP after many years of delay.
BMJ explores influence of tax and affordability
A new British Medical Journal analysis has also been published, looking at the effects of policy, economics and the market place on alcohol-related deaths in England and Wales over recent decades - press release here. It argues that a threefold increase in alcohol-related deaths between 1980 and 2008 was driven by increased affordability and availability, but subsequently stemmed by the recession and alcohol duty escalator.
Indeed alcohol-related deaths peaked in 2008, and have seen some small falls since. However the BMJ article, authored by Dr Nick Sheron and Professor Ian Gilmore, argues the significance of affordability in directly impacting alcohol-related deaths and therefore the importance of taxation and minimum pricing levers. Indeed the Institute for Fiscal Studies has also repeatedly highlighted the potential benefits of re-structuring alcohol taxation.
Interestingly the analysis also points out that the impacts of price and affordability appear to have observable short term impacts on alcohol-related deaths, as indicated by the change in trajectory following the recession and duty escalator and as seen in Canada and as a result of Gorbachov's alcohol policies in the 1980's. This may reflect the significance of changes in very heavy drinking on alcohol deaths, whereas across a broader population of alcohol misusers, the effect on attributable hospital admissions may be spread over 10-20 years.
Where next for UK alcohol harms?
Undoubtedly a huge amount hinges on Scotland's MUP ruling. If passed, Ireland and Wales would be expected to soon follow suit, and should the predicted impact be proven, pressure would mount on England to follow suit. Taxation of course would remain an issue given both appear to have significant potential to affect consumer behaviour and spending. No doubt the efforts to influence pricing policy from various groups will long continue.