Public health and the price of alcohol
Sir, – Sean Barrett writes (Letters, July 10th) that the Public Health (Alcohol) Act will boost the profits of retailers and calls for independent research by the Irish Government Economic Evaluation Service and the Comptroller & Auditor General to examine the loss to the exchequer from excise foregone. This would be a very valuable exercise.
The Act’s impact on alcohol consumption should also be independently assessed. Such an evaluation would take account of broader contexts and key variables, including the background long-term trend in alcohol consumption, economic and demographic change, and existing and emerging patterns in drug and alcohol use. For example, many people working in disadvantaged areas fear that at-risk young people will simply switch from cheap alcohol to cheap drugs, the latter being freely available and subject to no controls whatsoever.
If impact assessment is left to public health managers they will measure according to a narrow metric that “proves” the success of the Act. But if, for example, it simply displaces sales from cheap alcohol to illegal alcohol and drugs then it is a failure. Only independent research that takes account of the wider contexts and variables can give the full picture. – Yours, etc,
Dr DERMOT STOKES,
Sir, – The National Off-Licence Association, representing the independent off-licence owners throughout the country, would like to respond to a recent letter by Prof Sean Barrett. The argument that minimum unit pricing will lead to a boost in profits for retailers is based on a fundamental misconception and a failure to account for the uniquely high levels of excise duty levied in this country. Rather than resulting in profiteering, commercial realities will dictate that minimum price points will be aggressively fought over by mixed traders in order to maintain or increase market share.
Although minimum unit pricing will significantly reduce the scale of deep-discounting in Ireland, it will not eradicate the problem of using alcohol as a loss-leader, given that it will still be legal to sell alcohol at below net invoice cost. This will involve retailers in the mixed-retail sector discounting premium brands to minimum unit pricing prices and using these products as a loss-leader; not the price inflation of previously cheaper products.
Furthermore, the margin for profit in the retail sector is significantly reduced through the combination of high excise duties and minimum unit pricing, considering that minimum unit pricing is based on a “per alcoholic gram” basis. For illustrative purposes, the margin for profit for a retailer on a bottle of 38 per cent ABV (alcohol by volume) spirits would be just 3 cents, were excise duties to be increased by 30 cents in Budget 2020.
This is a far cry from profiteering, and shows that our punitive excise regime all but eradicates any commercial incentive for the independent off-licence sector.
The National Off-Licence Association, which is made up of independent specialist retailers, has long supported the implementation of minimum unit pricing as a means of reducing irresponsible retailing of alcohol. Our membership has overwhelmingly called for the immediate commencement of minimum unit pricing and is fully supportive of the Minister for Health’s ambition to do so in the near future. – Yours, etc,
Sir,– Sean Barrett argues that it is illogical to seek to reduce alcohol consumption by increasing the profits of those who sell alcohol. This is to misinterpret the intentions of those public-health advocates who campaigned long and hard for the introduction of minimum unit pricing, and whose intention was to reduce consumption by getting rid of very cheap alcohol.
If minimum unit pricing is finally introduced in this country, it may increase profits for some retailers while reducing profits for others. Understandably, public-health lobbyists are less interested in how this strategy will affect industry profits than in how it will affect public health; and preliminary results from Scotland indicate that this is a very effective public health measure.
It should also be noted that drinks industry umbrella bodies have consistently campaigned against minimum unit pricing and may well mount a legal challenge to its use in this country. – Yours, etc,