Floor price for alcohol will hit poor hardest

THE GOVERNMENT yesterday unveiled plans to introduce minimum prices for alcohol, despite concerns that such a move will penalise ordinary drinkers.

The home office proposals include a ban on multi-buy promotions and a minimum unit price of 45p in England and Wales. As a result a one litre bottle of Gordon’s gin – currently available from ASDA for £14 – will have a minimum price of £16.88. Meanwhile a bottle of wine would cost a minimum of £4.22.

Tim Martin, chairman of pub chain J D Wetherspoon, told City A.M. that the proposals are “purely a tax on people who don’t have a lot of money”.

“For people in London it’ll open up the booze cruise again and once that bandwagon starts rolling then the chancellor starts to lose a lot of income from VAT, employment and alcohol duty,” he added.

“It’s bad for the poor and it’s bad for the sensible but it won’t affect dinner parties in Notting Hill.”

Analysis by the Institute for Fiscal Studies found that the price floor would not just affect the very cheapest alcohol, as 60 per cent of off-licence units now cost less than 45p. It would also hit certain drinks, such as ciders, hard while alcopops would be relatively unaffected. Low income households would see the largest price increase.

Research from Sheffield University suggests a 45p minimum unit price would reduce the UK’s alcohol consumption by 4.3 per cent.

The government says that minimum pricing will cut hospital admissions by 24,600 after 10 years and result in 714 fewer drink-related deaths over the same period.

But British Retail Consortium food director Andrew Opie said the government “should recognise the role of personal responsibility”. “It should not allow interfering in the market to regulate prices to become the default approach for public health policy.”

Clare Thomas of law firm Addleshaw Goddard also warned that the changes “could breach the EU single market legislation”.