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Would a 50p drink tariff be good for pubs?

Jennifer Thomson asks the food and drink industry if they favour all alcohol having a minimum price per unit

Published on March 18th 2009.

Would a 50p drink tariff be good for pubs?

Chief Medical Officer Sir Liam Donaldson’s plans to introduce minimum prices for alcohol have met with a mixed response. But there may be something in them if rather than simply looking at the health benefits of making binge drinking harder we look at the effect they may have on keeping alive the country’s pubs and bars.

The initial idea - to set a minimum price of 50p per unit of alcohol - was shunned by some ministers and will undoubtedly annoy the discerning taxpayer, but it could benefit the catering industry.

With an estimated 39 pubs a week closing at the hands of beer tax, smoking ban, home drinking and the economic downturn, a minimum price tag could be just the boost the ailing trade needs in their David and Goliath battle against loss-leading supermarkets.

Under the proposed system, an average six-pack of lager would cost at least £6 and a bottle of wine, £4.50.

Roger Ward, Proprietor of Sam’s and Mr Thomas’s Chop Houses welcomed the suggestion:

“At long last the government is addressing the real issue - the problem of binge drinking lies with cheap booze in supermarkets.

“It is sheer madness that a pint of Stella costing £3.50 in a bar or pub can be bought for as little as a quid in Tesco.”

But he also raised concerns that the plan would do little to reverse the damage already done to the pub industry. Referring to the 33% beer tax imposed on pub landlords, he said:

“In principle minimum pricing is a sensible idea, but will it be used to reimburse those who have forked out extortionate levels of duty for years? It is an absolute outrage that duty is essentially just another name for income tax.”

William Lees-Jones of Manchester brewers JW Lees was more sceptical. He criticised the proposal as a further attempt to nannify the industry.

“What the government is doing now is somewhat reminiscent of post-war Germany, it's another example of them trying to legislate in an area where they have limited knowledge.”

He said that the new plan would do little to stop those most at risk from binge drinking. A 2 litre bottle of cider would still only be £5.50.

“If the government really wanted to do something, they should ban the practice of loss leading.

“Landlords are still going to lose out, because there will still be tanked up people who’ve drunk at home first going into pubs who they're unable to serve.”

But the general consensus among licensees, it seems, is one of cautionary approval. A minimum charge for alcohol might be a start, but it’s a long way from hitting the big, bad supermarket chains where it really hurts.

Unless you’re an ardent Tokyo Project reveller, 50p per unit might not seem unreasonable in licensed premises – in fact we already pay that and more anyway - but it’s yet another regulation for landlords, says Phil Burke, spokesman for the Manchester Pub and Club network.

“Landlords are already legislated to the hilt with the smoking ban and beer tax, we don’t need further restrictions. Any new measure will just be another burden.”What about the devil incarnate themselves? Would supermarket chains be willing to impose a minimum charge, even if it meant watching alcohol sales tumble off a cliff?

A spokesman for Tesco said the firm would be willing to cooperate, but only if the new measures were industry wide.

“If government comes forward with a package of proposals including minimum alcohol pricing, we would enter into discussions positively.”

But he also shared the concern of PM Gordon Brown who this week has said that raising the cost of alcohol in the middle of a recession would just be another kick in the teeth for consumers.

“It needs to be done carefully to ensure we do not hit the vast majority of people who buy and consume alcohol responsibly.”

Tesco would say that wouldn’t they? They’re bound to make great play of being a member of the big happy retail family whilst indiscriminately using loss leader alcohol brands.

Critics will accuse the government of merely throwing pub landlords a crumb, and making all the right noises before the budget. But while the gesture does fall short of solving the problem, any measure that targets the aggressive tactics of supermarkets shouldn’t be ruled out if helps preserve the pub.

After all what defines us more as a nation: a good boozer or an efficient supermarket?

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M30March 18th 2009.

The price increase in booze is fine for those who can afford it. CHEAPER BOOZE NOW!

Craig LanlubberMarch 18th 2009.

The 50p idea is a great idea. The most pernicious problem at present is the ready supply of cheap booze from shops

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