12 August 2010 | Published by Verdict

The aim of councils in Greater Manchester to introduce a local national minimum price for alcohol has been given sympathetic support by the Prime Minister. However, Verdict believes that the plans are complex, costly and, ultimately, unworkable.

Neil Saunders, Consulting Director of Verdict comments: “This is a typical headline grabbing scheme which is just not workable. To cut down alcohol consumption you’d have to raise the price substantially. If that was just done in Manchester consumers would simply travel further afield to stock up. So ultimately you’d end up with a similar level of consumption and a much damaged retail sector in Manchester – the worst possible outcome for everyone.”

Aside from its impracticality, Verdict has identified five objections to local minimum pricing:

• The significant difficulties it would create for internet suppliers of alcohol which would need to adjust the price depending on where the goods were being delivered.
• The damaging impact it would have on retailers in the affected area as consumers migrated elsewhere to buy alcohol. Big chains would be relatively unconcerned as they may make up the lost sales in other stores; independents without national coverage would not be so fortunate.
• The complexity and cost of local councils reviewing pricing policies when council budgets are already under pressure.
• The unfairness it would create for those, such as the elderly, who are unable to easily travel to unaffected stores, but yet only consume alcohol in moderation.
• The general cost to retailers of adjusting systems at a store level.

“Councils do have a responsibility to look after their local areas, but they also have a responsibility to properly think through the consequences of their proposals. So does the Prime Minister which is why, rather than encouraging this idea, he should firmly reject it”.

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