Public health bodies are calling on the Chancellor to use taxation as a lever to address the cheapest alcohol products including 'white ciders' ahead of the spring budget next month, though are competing with opposing calls from alcohol industry bodies. Both taxation and a minimum unit pricing (MUP) featured in a commons debate on alcohol harms on Thursday 2nd February.
The Alcohol Health Alliance (AHA) have released a call [pdf] making four recommendations for the government including the reinstatement of the alcohol duty escalator, MUP and to seek a more health adequate duty system based on strength for all products in future trade agreements. Balance, the regional alcohol group for the North East, are also calling on the Chancellor to raise duty on high strength white ciders, such as Frosty Jack’s and White Ace, which have a lower duty per unit than any other alcohol product. They say a targeted rise in duty would leave 80 percent of cider sales unaffected and that 66% of the public would support a duty increase, also highlighting a recent Alcohol Health Alliance (AHA) report stating white cider products - sold for as little as 16p per unit of alcohol - are predominantly drunk by dependent and underage drinkers.
In December last year 43 organisations and doctors also wrote a letter [pdf] to the Chancellor following the release of PHE's alcohol evidence review which concluded that pricing policies to reduce the affordability of alcohol 'are the most effective, and cost-effective, approaches to prevention and health improvement'. PHE identified that according to Treasury forecasts, 'cuts in alcohol duty since 2013 are projected to have reduced income to the Exchequer by £5 billion over five years, reducing to £3.45 billion when consumption increases are considered.' A 2016 IAS report ‘Dereliction of Duty: Are UK alcohol taxes too low? said that the Government’s own estimates of the societal costs of alcohol imply that alcohol duty should be raised.
There are of course groups arguing the opposite way; the TaxPayers’ Alliance have claimed that around £9 billion of tax revenue has been lost because of the illicit market in spirits and wine between 2010-15, which they claim is fuelled by high taxes. The British Beer and Pub Association (BBPA) are campaigning to #cutbeertax, stating on a campaign website that hundreds of thousands of jobs contributing billions of pounds to the UK economy 'could be jeopardised' by a planned beer tax increase this year. The Wine and Spirit Trade Association (WSTA) website states 'in recent years, increasing duty on alcohol has placed a disproportionate burden on the sector'. Both WTSA and Tim Loughton MP, Chair of the All Party Parliamentary Wine and Spirits group are encouraging members to 'speak up' for the trade ahead of the budget.
Changes for pricing policy in 2017?
Last year the former Chancellor George Osborne declined health group's calls to increase duty, instead freezing duty on beer, cider, and spirits, with wine duty rising in line with inflation. A Government release on the impacts of the duty changes said the freeze was 'likely to lead to a minor increase in overall alcohol consumption in the UK', although data for 2016 is not yet available. In the same budget Osborne announced a 'sugar tax', stating "let’s tax the things we want to reduce, not the things we want to encourage." Osborne had previously ended the alcohol duty escalator in 2014 and cut duty rates in 2015, which the WSTA's Miles Beale said showed the Treasury had listened to the trade's evidence, championed through a 'Drop the duty' campaign.
White ciders have remained a consistent feature in health group's calls for action on cheap alcohol, which in the absence of MUP, taxation offers an alternative lever. However MUP remains a crucial objective given the limitations of tax and at present, the complications and restrictions on potential changes to duty structures under EU law. An analysis by the Sheffield Alcohol Research Group (SARG) found 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. With Scotland's final MUP verdict expected anytime, 2017 could be a landmark year for alcohol pricing policy - in Scotland at least.