Economists reject minimum pricing benefits
Published:  08 March, 2009

Minimum alcohol pricing will not have a major impact on problem drinkers, according to a study by the Centre for Economics & Business Research.

The study was commissioned by SABMiller and assumes that the Scottish Government will introduce a 40p-a-unit minimum price, although the level has not yet been set. Some campaigners have called for a 50p minimum.

The research found that consumers would end up paying over £80 million per year more for alcohol products – the equivalent of £35 per household per year.

The study does concede that the value of benefits of improved health and job prospects for individuals would be £38 million, and a further £10 million would be saved through lower police and NHS costs.

Ben Read, one of the report’s authors and managing economist at CEBR, said: "Despite the Scottish Government’s proclamations to the contrary, the published research on minimum alcohol pricing does not present a compelling case once you factor in the substantial additional costs to consumers.

"In fact, with direct financial costs to consumers in the region of £80 million per year and additional economic costs of £45 million per year, the potential benefits start to seem pretty small in comparison.

"We can only hope that the Scottish Government will undertake a full regulatory impact assessment which considers both the costs and benefits of this proposed policy, instead of the relatively one-sided case that has been presented to date."

CEBR managing director Mark Pragnell added: "A key problem with minimum pricing is that heavier drinkers – those that the policy is supposed to be targeting – are least responsive to price changes.

"This means that minimum pricing is an incredibly blunt instrument which imposes significant costs across large sections of society, whilst having very limited benefits in terms of curbing the excesses of the minority."

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