An economist has told MCA that the on-trade should be wary about the Welsh Government’s plans to introduce a minimum price per unit of alcohol.

Chris Snowdon, of the Institute of Economic Affairs, warned that while Minimum Unit Pricing (MUP) may well reduce how much alcohol is bought from supermarkets, if customers are forced to trim their alcohol budget they are more likely to economise on their on-trade spend.

Snowdon was speaking to MCA following the introduction of The Public Health (Minimum Price for Alcohol) (Wales) Bill to the Welsh Assembly. While the approach is based on a 2014 modelling of 50p per unit, Snowdon pointed out that if legislation was passed the authority was likely to take inflation into account.

Wales would also be unable take its ideas forward until the Supreme Court has ruled on Scotland’s planned introduction of MUP.

Snowdon said the situation in Wales would differ because its border with England was much more densely populated than Scotland’s.

He told MCA: “I can understand why operators in the on-trade might see this as ultimately a good thing for their businesses but I think they would be supping with the devil.

“If the prices in supermarkets go up, people might simply drink less, but what is much more likely is that they will look to cut down on the area of highest spend – which is likely to be in the on-trade. What you will see is the bottom layer of cheap alcohol will disappear but that new level will become the new norm and will still be considerably cheaper than the on-trade. Drinkers on a budget are more likely to economise on one less pint in the pub on a Saturday than to cut out three or four from the supermarket.”

He added: “The industry also has to remember who is pushing for these changes – it is the temperance lobby. They are targeting supermarkets at the moment because that is where the bulk of the alcohol is sold but that won’t always be the case. Once the Government starts setting prices for one part of the market, the genie is out of the bottle.”

Association of Licensed Multiple Operators chief executive Kate Nicholls also urged caution, saying: “Minimum Unit Pricing is a very blunt measure and we would encourage the Welsh Government to continue to explore a more nuanced approach to alcohol-related harm. The trends over the last decade or more are clear – fewer people are consuming less alcohol, and this is particularly true of young people. We would welcome measures that encourage a shift back towards consumption in the responsible environment of pubs, bars, restaurants and clubs. This approach, rather than reducing the disposable income of all who consume alcohol in the home, would help continue to boost Welsh businesses as well as tackling perceived areas of harm.”

Welsh Public Health Minister Rebecca Evans said: “Alcohol-related harm is a significant public health problem in Wales. The 463 alcohol-attributable deaths in 2015 were all avoidable, and each of these deaths would have had a devastating effect on the person’s family and friends. Alcohol-related harm also has a big impact on public services such as the NHS.

“There is a very clear and direct link between levels of excessive drinking and the availability of cheap alcohol. So we need to take decisive action now to address the affordability of alcohol, as part of wider efforts to tackle alcohol related harm.”

Chief Medical Officer for Wales, Dr Frank Atherton said: “As alcohol has become more affordable, consumption has increased. As consumption increases, harm increases. All alcohol-attributable deaths are avoidable deaths, demonstrating the urgency for further preventative action.

“Increasing the price of alcohol through the introduction of a minimum unit price provides us with an effective and efficient way of reducing excessive alcohol consumption and alcohol-related harm.

“It will have a small impact on moderate drinkers. The most substantial effects will be experienced by harmful and hazardous drinkers, who are more likely to consume cheaper and higher strength alcohol products.”