Driven by the Scottish National Party’s recent parliamentary victory, the long-running battle around minimum pricing is gathering momentum, with dramatic potential, says Jon Collins, chief executive of CGA.
Does the Scottish National Party’s (SNP’s) surprise securing of an outright majority in the Scottish Parliament mean that, finally, we are coming to the end of the phoney war on minimum pricing and moving into actual real-world testing of the concept (and its legality)?
If it feels like we have been debating the potential risks, benefits and legality of minimum pricing for many a year, it is because we have – I wrote my first paper on this in the last century. Noctis (then BEDA, the Bar Entertainment & Dance Association) in Scotland had sought a QC’s opinion on the legality of bringing forward a minimum price condition under the 1976 Act.
While this was unequivocal in its assertion that this would be legal as the social good delivered (and the fact it was imposed by lawful authority) meant it would be exempt from the Competition Act 1998, and this was part of the reasoning that saw minimum price conditions briefly appear in a number of licensing board policies across Scotland, it was but one opinion.
These Scottish schemes were seen by many as beneficial as they moved operators away from competing at a very cheap price point, quickly labelled ‘deep discounting’. These were the days when the legendary Bonkers in Glasgow thrived on bottles of Budweiser at 50p. But a successful legal challenge was brought, founded on the claim that the 1976 Act did not provide the necessary lawful authority for a licensing board to intervene on price.
Since then the debate on minimum pricing has been all but completely hypothetical. Supporters believe it would reduce the differential with the supermarkets and allow operators to compete on quality of offer.
Opponents feel any move on price would be illegal (leaving them open to substantial fines), would give Government too much influence over our industry, and be a red herring as the real issue is delivering a consistently excellent experience across the on-trade.
The SNP’s stunning election result means we will, in the months to come, most certainly see the concept thoroughly tested and then, in all probability, witness a minimum price regime in action.
The ’76 Act has been replaced by the Licensing (Scotland) Act 2005, with supporters of minimum pricing believing that the wider remit of this Act (including a specific objective to protect and promote public health) provides the necessary lawful authority. In addition, the SNP’s previous work, when leading a minority Government, sets out the social good that will come from action on price.
Such a move will be promoted as the latest strand in the SNP’s continuing efforts to tackle Scotland’s relationship with alcohol – a minimum-price regime complimenting the new Alcohol Act which contains further measures to tackle irresponsible promotions, end bulk discounting and introduce a Challenge 25 proof-of-age scheme.
The SNP’s attempts to introduce a minimum price per alcohol unit were thwarted last summer by a lack of votes in Parliament. The party, though, never waivered in its support for such a policy, noting in its manifesto for last month’s election: “Opposition parties regrettably put party politics ahead of public safety by voting against minimum pricing, which was supported by the police. We will re-introduce this vital policy in the next Parliament to eradicate the cheap booze that fuels so much crime in Scotland.
“An SNP government will introduce a Minimum Pricing Bill as a priority in our first legislative programme and we will seek to build a coalition of support for it in Parliament to match the one that already exists outside of Parliament.”
That need to build a coalition is no longer the case, so expect swift action early into the new Parliament. Last time the SNP was looking at a minimum price per unit of around 40p-45p. This time, confident in their majority, a minimum price of 50p per unit might well be proposed.
As with other areas of public policy (such as the smoking ban), neighbouring administrations will await the public reaction to and impact of a minimum price regime with interest. Should it prove a success, the Westminster health lobby will no doubt press for the Coalition to go further than its current proposals to ban below-cost sales.
