Alcohol pricing news and updates: Green King response to IFS report; HMRC analysis

The brewer and pub owner Greene King has called for the "minimum pricing debate to continue" following a policy shift towards taxation and banning 'below cost' sales. Greene King, who have previously spoken out in favour of minimum pricing, commissioned a review of the IFS alcohol pricing report which urged higher taxation over minimum pricing.

Review of IFS Impact of Introducing a Minimum Price on Alcohol in Britain [pdf]

In a press release, Greene King stated that minimum pricing would be a "targeted solution", "raising the level of the lowest priced alcohol and directly tackling the behaviour which is causing most concern." However it also suggested that in contrast to the IFS report, the alcohol industry would not benefit from increased profit - in fact it could lose as much as £1.2 billion per year. See also a letter to the Telegraph from the Greene King chief executive Rooney Anand.

The report sets out that the IFS pricing report is a 'high quality and useful contribution', but outlines three key areas of further analysis:

1. Using HMRC estimates of the UK price elasticity of demand for the off-trade implies little or no transfer of revenues and profits to alcohol producers and off-licence retailers.
2. A minimum price may be a more targeted and effective option than a tax rise if the main policy objective is to deter problem drinking.
3. Either the minimum price or a tax increase could result in more legal and illicit crossborder trade, although the scale of the problem might be expected to be greater with the tax option.

The report did not consider whether minimum pricing would be legal under EU law. Recently the Government announced changes to alcohol taxation on low and high strength beers. An announcement is also soon expected on a form of below cost ban whilst MPs continue to raise the issue of cheap alcohol. See our table highlighting the main pricing policy differences.

HMRC alcohol pricing elasticities reports have been released:

• Econometric Analysis of Alcohol Consumption in the UK
• Econometric Models of Alcohol Demand in the United Kingdom

In Scotland attention on price continues following the passing of the recent Alcohol Bill without the hotly debated 45p minimum price proposal. A recent study looking at drink type and price impact on health made the news in The Herald.