Blog: Double Diamonds are Forever

04 December 2012

 

CGA chief executive Jon Collin's gives us his thoughts on the Government's recent alcohol consultation papers and their likness to James Bond films...

standard opening: majority of people drink responsibly;

over stated bad guy: binge drinking turning town centres into no go areas;

shiny new gadgets: for ADZ, LNL and EMRO read health objective for CIPs; and 

a sense that the franchise will never end.

Foreword

The Home Secretary’s introduction delivers the familiar one-two of responsible majority and excessive alcohol-fuelled crime and disorder in the opening paragraph.  Going on to note the multiple steps this Government has taken to tackle binge drinking (in just two and a bit years in office).  The foreword concludes by meeting head on the accusation that elements of the strategy, in particular minimum unit pricing (MUP), are too scatter gun with the Home Secretary stating that the measures “are targeted explicitly at reducing harmful drinking”.  No doubt the veracity of that statement will be much debated in the months ahead.

The reduced consultation time of 10 weeks is a clear indicator that the Government is committed to legislation in the Spring.  That would suggest the internal target for the introduction of MUP remains October 2014 – not much more than 6 months ahead of the next General Election.  As an aside, it could be that the inevitable legal challenges which might well delay the introduction of MUP could be an electoral positive for the coalition.

Introduction

There is nothing unexpected in the consultation in terms of subject matter.  The items under consultation (detailed below) have been heavily trailed and featured in the alcohol strategy itself earlier this year.  

As with the strategy itself, once you get past the politicking at the start, the consultation contains a number of potentially positive developments for the on trade.  MUP may divide the on trade but measures such as a ban on multi-buy promotions, extension of a ‘no irresponsible promotions’ condition to the off trade and the removal of the need to advertise licence applications/variations should all secure unanimous support.

Minimum Unit Pricing

The assertive tone of the foreword is, unsurprisingly, carried through to the dedicated chapter on MUP.  The political will behind MUP remains strong with the belief that:

“a minimum unit price will ensure – for the first time – that alcohol can only be sold at a sensible and responsible price”

5.2

Again, in recognition that this policy will be hotly contested, the consultation seeks to be on the front foot, noting that:

“Crucially, evidence enables researchers to estimate in a statistically robust way that harmful drinkers in particular reduce their consumption as a result of a minimum unit price”

5.3

The Government suggests that a 45p MUP would deliver an additional £1bn to business in the first year.  That is a big number.  So big, it is bound to catch the attention of the health lobby who might then bid to have some of this gain clawed back and used to treat alcohol related health and social problems.

And, of course, the MUP, if introduced, would not stay at 45p forever.  At present, the choice is between an annual increase in line with inflation or a review after a set period.  Either route would be cause for concern for those who oppose MUP on the grounds that it is the thin end of the wedge.  An annual increase could become subject to an escalator.  A review after a period of years could mean pressure builds up in the system and the resultant increase is sizeable.

Ban on Multi-Buy Promotions

The consultation seeks to tread a fine line - banning promotions that encourage bulk purchasing while making clear that the consumer could still access bargains through deep discounts on individual products.  

At first it makes the case for action based on the contribution such promotions make 

“to the availability of irresponsibly priced alcohol, particularly through promotions which encourage large volumes of alcohol to be purchased”.

6.3

But immediately follows this up with a guide to acceptable promotions e.g. half price offers or £x off any individual item.  One can understand why the Government is pushing this message, to demonstrate this is targeted intervention.  However, it does leave the perception that the Home Office are advocating potentially irresponsible promotions as long as they are not linked to a multi-buy.

“A case of wine can be priced at any level if the items are not available to buy individually”

6.4

This perception is reinforced when it is made clear that any intervention would not prevent retailers from requiring their consumers to purchase a minimum quantity.  It appears that, under these proposals, the current promotion of four bottles of ale for £5 would be illegal but a new promotion of a range of ales at £1.25 (minimum purchase four bottles) would be legal.  

Tackling cheap off trade alcohol, particularly in the current economic climate, was always going to be a difficult task.  The Government believes action is necessary but does not want to penalise the general population.  It appears this has created a rather two-headed approach which might deliver minimal change on the ground.

Reviewing the mandatory licensing conditions

At one point, prior to the 2010 election, it had looked like a Conservative government would scrap the mandatory licensing conditions.  This policy shifted in power to one of reviewing the conditions.  At the time it was thought this could mean review with a view to removal.  This paper makes clear that the review is to assess effectiveness.  In truth, the conditions have had little or no impact on the vast majority of operators as the sort of activity they prevent was only ever practised by a tiny number of outlets.  

There is the potential that this review will extend the application of the mandatory conditions to the off trade.  That, potentially, would have more impact on how supermarkets promote alcohol than MUP or a ban on multi-buy promotions.  The current condition banning irresponsible promotions could be interpreted at a local level in a way that impacts a supermarket’s ability to price and promote alcohol.

Health objective for cumulative impact policies (CIPs)

A similar power already exists in Scotland and, it is fair to say that health bodies are still getting to grips with this new responsibility.  Should this become law, it will be another barrier to a successful licence application.  Whether you view this as an unfair restriction on trade or a sensible step back towards the need demonstrate ‘need’ will depend on your current operating plans.

Freeing up responsible businesses

The proposal to allow florists to sell wine need not detain us.  Although it could be quite a challenge for the Government to identify the dividing line between ancillary sales and business norm.

There is a saving to be had from the proposal to remove the need to reapply for your personal licence every 10 years.  The Government feels any risks of removal are manageable.  Local authorities will be relieved to avoid the large spike in renewals that would have come with the tenth anniversary of the implementation of the 2003 Act (in 2015).  Though some authorities might also be saddened at the loss of all those associated fees.

Increasing the number of TENs possible at a single premises from 12 to 15 or 18 would not seem to be contentious.  

Conclusion

So perhaps if alcohol consultation papers are like Bond films, then this latest in the series has been directed by M Night Shyamalan.  The director of The Sixth Sense is known for his love of a hidden twist.  While we are all distracted by MUP and multi-buys, this paper might just deliver that twist through the relatively innocuous suggestion that relevant mandatory conditions should apply to the off-trade.

 

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