Alcohol - minimum unit pricing - continuation and future pricing: consultation

We are consulting on whether Minimum Unit Pricing (MUP) should be continued as part of the range of policy measures in place to address alcohol related harm, and, in the event of its continuation, the level the minimum unit price should be set going forward.


Summary

In 2012, the Scottish Parliament passed the Alcohol (Minimum Pricing) (Scotland) Act 2012 (the 2012 Act) which allowed Scottish Ministers to introduce a system of minimum unit pricing for alcohol. Minimum Unit Pricing (MUP) was first implemented on 1 May 2018, with the minimum price of alcohol set at 50 pence per unit (ppu). MUP was introduced to mitigate the significant health harms caused by alcohol consumption in Scotland.

The policy aim of MUP is to reduce health harms caused by alcohol consumption by setting a floor price below which alcohol cannot be sold. In particular, it targets a reduction in consumption of alcohol that is considered cheap, relative to its strength. It aims to reduce both the consumption of alcohol at population level and, in particular, among those who drink at hazardous and harmful levels. In doing so, it aims to reduce alcohol related health harms among hazardous and harmful drinkers[1], and contribute to reducing harm at a whole population level.

People who drink at hazardous and harmful levels in lower socio-economic groups suffer greater harms than those who drink at these levels in higher socio-economic groups due to the impact of multiple drivers of health inequality. MUP is also intended to address alcohol related health inequalities by reducing consumption and therefore harm among hazardous and harmful drinkers as a whole, having a positive effect on health inequalities given the greater harms people in lower socio-economic groups experience in relation to alcohol.

The 2012 Act states that the MUP provisions will expire after they have been in place for 6 years (30 April 2024) unless the Scottish Ministers make new legislation to continue their effect[2].

The Scottish Government is consulting on whether MUP should be continued as part of the range of policy measures in place to address alcohol related harm, and, in the event of its continuation, the level the minimum unit price should be set going forward.

An evaluation of MUP has been undertaken during its first 5 years, led by Public Health Scotland (PHS)[3]. PHS's Final Evaluation Report[4] was published on 27 June 2023, and concluded:

"Overall, the evidence supports that MUP has had a positive impact on health outcomes, namely a reduction in alcohol-attributable deaths and hospital admissions, particularly in men and those living in the most deprived areas, and therefore contributes to addressing alcohol-related health inequalities. There was no clear evidence of substantial negative impacts on the alcoholic drinks industry, or of social harms at the population level."[5]

Following this, the Scottish Government has produced a report on the operation and effect of MUP over the 5 years[6].

Having considered MUP's impact, as well as the views and experiences of individuals and groups with a wide range of perspectives, the Scottish Government is satisfied that there is a strong case to continue with MUP and are consulting on this proposal. More information about engagement that took place with stakeholders can be found in the accompanying Interim Business and Regulation Impact Assessment (BRIA).

On that basis, the Scottish Government proposes, subject to the outcome of this public consultation, laying the necessary legislation to ensure the effect of MUP continues after 30 April 2024. This would be done by Scottish Ministers laying Orders in Parliament by early 2024 to continue MUP beyond the initial six-year period.

The Scottish Government also proposes the level of minimum unit price is revised to 65ppu to provide a proportionate response to tackling alcohol harms. It strikes a reasonable balance between public health benefits against the effects of any intervention in the alcoholic drinks market and subsequent impact on consumers.

Consideration of the range of options available, including not continuing with MUP, are set out below.

The details of how the Scottish Government arrived at this preferred price for the purpose of consultation are set out in detail in the accompanying Interim BRIA at section 6.

The Scottish Government is conducting a public consultation to gather views from people, businesses, public bodies and interested parties on the proposal to continue the effect of the MUP legislation and, if continued, to set a new price of 65ppu of alcohol going forward. This consultation is being carried out in accordance with article 9 of the General Food Law Regulation (Regulation (EC) No 178/2002), which applies to these proposals.

This paper provides some background information for people who wish to take part in the consultation.

What options were considered?

This consultation sets out proposals on two aspects of MUP: whether or not to continue MUP and, if it continues, at what price the minimum unit price should be set in future.

Continuing or ceasing MUP

The Scottish Government is consulting on whether it should continue the MUP scheme beyond the current date it expires on 30 April 2024.

PHS published an evaluation of MUP which found that, in relation to the core policy aims:

  • The policy has had a positive impact on health outcomes, including addressing alcohol-related health inequalities.
  • MUP was associated with an estimated 13.4% reduction in deaths wholly attributable to alcohol, compared to what might have happened if MUP had not been in place. This was estimated to be equivalent to an average of 156 deaths averted by MUP per year over the study period (May 2018-December 2020).
  • Overall, it is likely that MUP has reduced wholly attributable hospital admissions in Scotland compared to what would have happened in the absence of MUP.
  • There was strong and consistent evidence of a reduction in population-level alcohol consumption following MUP implementation, as measured by retail sales. Total retail sales of alcohol reduced by 3% driven entirely by a reduction in sales through the off-trade (supermarkets and other shops).
  • Evidence from alcohol purchasing data suggests that the greatest reductions in alcohol purchases were among those households purchasing the most alcohol prior to MUP implementation, and the majority of households were not affected, meaning the policy was well targeted at people who drink at hazardous and harmful levels.
  • The fact that MUP is estimated to have decreased alcohol-attributable deaths and hospital admissions related to chronic conditions suggests that MUP has, by definition, reduced consumption in those that drink at hazardous and harmful levels;
  • The estimated reductions in deaths and hospital admissions were largest among men and among those living in the 40% most deprived areas in Scotland – indicating that MUP contributed to addressing alcohol-related health inequalities.

The evaluation did not find any consistent evidence that MUP impacted other alcohol-related health outcomes such as ambulance callouts, emergency department attendances and prescribing of medication for alcohol dependence. There was also no consistent evidence of either positive or negative impacts on social outcomes, such as alcohol-related crime or illicit drug use at a population level.

While the evaluation did find some indication of a small estimated increase in deaths wholly attributable to alcohol consumption from acute causes, such as alcohol intoxication, there was considerable uncertainty around this finding, in part due to the relatively small number of deaths due to acute causes. There was also some evidence of an estimated increase in hospital admissions wholly attributable to alcohol consumption due to acute causes, although these findings were less certain than the estimated reductions in hospital admissions due to chronic conditions. The evaluation found overall, it is likely that MUP has reduced hospital admissions wholly attributable to alcohol consumption in Scotland, compared to what would have happened in the absence of MUP.

The evaluation noted that there was limited evidence to suggest MUP was effective in reducing consumption for people with alcohol dependence. There was also evidence that some people with established alcohol dependence with limited financial or social support, may have experienced harm, such as withdrawal, reduced expenditure on food or increased intoxication possibly from switching to spirits as a consequence of MUP. The evaluation noted, however, that people with alcohol dependence are a particular subgroup of those who drink at harmful levels and have specific needs. People with alcohol dependence need timely and evidence-based treatment and wider support that addresses the root cause of their dependence.

The Scottish Government acknowledge whilst there is limited evidence that MUP was effective in reducing alcohol consumption for people with alcohol dependence it's important to note that MUP is a whole population policy with a particular focus on hazardous and harmful drinkers. People with alcohol dependency fall within the highest consumption end as a subset of the harmful drinking category. Given the clinical needs of this particular group, MUP alone was not intended as a key intervention to address the needs of this group – treatment and care services are critical for this group. Increased investment from the national mission on tackling drug-related deaths is being used by Alcohol and Drug Partnerships across Scotland to support people facing problems because of both alcohol and drug use. Further details on the Scottish Government's alcohol treatment priorities can be found in Annex C. This includes the review into Alcohol Brief Interventions and working with the UK Government on developing new UK-wide clinical guidelines for alcohol treatment.

The evaluation also found no clear evidence overall of substantial negative impacts on the alcoholic drinks industry as a whole in Scotland, although the evidence was more mixed around the impacts to specific types of business. Little evidence was found of MUP having had an impact on key business performance metrics of number of enterprises and business units; employment and turnover. Case studies with retailers and producers of alcoholic drinks, conducted after implementation as part of the evaluation, found that participants had come to consider MUP as business as usual, but were concerned that increasing the minimum price would cause disruption, and about the potential for new policies such as Scotland's Deposit Return Scheme (DRS) to interact with MUP. Roundtable events with producers, retailers and representatives on on-trade and off-trade bodies in July 2023 found repeated themes by participants of MUP now being considered 'business-as-usual' for the sector.

The evaluation also sought to address whether some businesses were more affected positively or negatively than others. It found the decline in alcohol consumption following MUP was driven particularly by reduction in the sale of alcoholic drinks in the categories most affected by MUP price increases. The products that experienced the largest price increase, namely cider, perry and own-brand spirits, had the largest fall in sales. Large retailers did not report any change in revenue or profits due to MUP, but convenience stores were more likely to have noted a decrease in revenue and profits, particularly if they previously relied on high-strength; low-cost alcohol products.

The Scottish Government has considered the evidence from the evaluation, including the impacts on business and industry and the fact that the evidence base indicates MUP has achieved and is continuing to achieve its core policy objective of reducing alcohol-related health harms, in particular amongst harmful and hazardous drinkers.

On balance, the Scottish Government considers that MUP delivers public health benefits proportionate to the potential impacts of the policy on business, industry and the alcoholic drinks market. The Scottish Government is therefore proposing that MUP is continued beyond 30 April 2024.

Preferred Minimum Unit Price

The Scottish Government are also consulting on the appropriate level for a minimum unit price going forward, in the event of MUP continuing as part of the range of policy actions to reduce alcohol related harm. The Scottish Government has assessed a range of options, summarised below. For the purpose of presenting the range of options, these are set out in 5p bandings. It would, however, be open to Ministers to set a price outwith those set out below.

The Interim BRIA published alongside this consultation includes information about the modelling Scottish Government commissioned the University of Sheffield Alcohol Research Group to undertake which informed our review[7]. SARG is a world-leading centre for research on alcohol harms. Their work is widely used by policymakers, practitioners, and the general public. Further detailed information on the advantages and disadvantages of each price, and explanation of the Scottish Government's proposals can be found in the Interim BRIA. Below is a summary of the different price options and the conclusion Scottish Government has reached: to propose a new level of 65ppu.

Lowering the minimum unit price below 50 pence per unit

Lowering the minimum unit price threshold is estimated to increase alcohol consumption compared to the control of 50ppu in 2019 prices[8], and increase alcohol related health harm, with the greatest increases in the most deprived groups. Whilst MUP sets a minimum level for prices, in theory, prices at or just above 50ppu would not need to change. It is likely, however, that some of those products which are constrained by the current 50ppu MUP level would decrease to the new lower level. Products that were de-listed for the Scottish market at a minimum unit price of 50ppu might be reintroduced at a price lower than 50ppu.

The impact of lowering the minimum unit price below 50 pence per unit is counter to the intention of the policy to reduce alcohol related harm and contribute to reductions in alcohol related health inequalities. This option would be counter to the Scottish Government's ambition to reduce alcohol related harm and health impacts and is, therefore, not being proposed.

Further information used to come to this conclusion can be found in the Interim BRIA.

50 pence per unit

There is evidence from the PHS evaluation that 50ppu has been an effective price. However, its effectiveness will reduce as a result of the effects of inflation. The PHS evaluation final report referred to this as a consideration for policymakers: the evaluation of MUP was conducted at 50ppu and, if MUP continues, it is likely benefits realised will only be maintained at similar levels if the value of MUP is maintained relative to the prices of other products. The report also mentions that increasing the level of MUP would potentially increase the positive impact on consumption and harms, but that any negative or harmful impacts might also increase. Maintaining MUP at its current level of 50ppu in cash terms is estimated to increase alcohol consumption and hence alcohol harms, because alcohol would become more affordable relative to other products due to inflation. This is not consistent with our policy aim of reducing alcohol-related harm and is therefore not being proposed.

Further information used to come to this conclusion can be found in the Interim BRIA.

55 pence per unit

Similarly to maintaining the 50ppu rate, increasing the rate of the minimum unit price to 55ppu, whilst higher than the current rate, would be unlikely to maintain the value of MUP against inflation. Over time this will likely diminish the level of public health benefit that is expected to be gained from MUP as a result of its continuation as an intervention.

There are other factors that need to be taken into account when setting a new price, but how the price compares with inflation is a significant element in maintaining the effectiveness of MUP.

Further information used to come to this conclusion can be found in the Interim BRIA.

60 pence per unit

This option is estimated to be closest to maintaining the current benefits of the policy and would uprate the minimum unit price in line with the most commonly used measure of inflation[9]. It would likely result in a small increase in the share of products captured by MUP compared to when it was first introduced, and therefore might increase the potential for adverse impacts to businesses. At the time the Scottish Government originally intended to introduce a minimum unit price in 2012, the proportion of the off-trade market that a 50ppu would impact was 60%. In the year prior to MUP being implemented (2017), 45% of alcohol sold in the off-trade market in Scotland was below 50ppu.[10] 60ppu (estimated at 2023 prices) would impact on 52% of the off-trade market.[11]

The principal advantage of a preferred price of 60ppu is it is estimated to achieve the health benefits intended by the policy (for example, of mortality and hospitalisations averted and years of life lost reduced) on a broadly comparable level to when MUP was first introduced in 2018.

On balance, it is considered necessary to capture a slightly higher share of the market given the importance of the policy aims, and the worsening situation of overall population health and inequalities in Scotland, and alcohol related health harm as measured by mortality trends in recent years.

The principal disadvantage to 60ppu is that it is not estimated to achieve the health benefits in terms of mortality, hospitalisations and years of life lost as 65ppu (or higher thresholds).

Given the level of alcohol related harms in Scotland, Scottish Ministers are seeking a MUP level which will result in additional public health benefits compared to the original level. This option is therefore not proposed.

Further information used to come to this conclusion can be found in the Interim BRIA.

65 pence per unit

65ppu provides even greater positive health benefits than 60ppu, with modelling showing it could avert an additional 60 deaths in the first year and 774 fewer hospital admissions compared to 60ppu. The number of hazardous drinkers is estimated to fall by 15,742 and the number of harmful drinkers fall by 11,403, compared to 60ppu. The health benefits would be experienced most acutely by those in the most deprived groups of the population on average, with 22 fewer deaths in the most deprived SIMD quintile and 6 fewer deaths in the least deprived SIMD quintile in year one of the policy compared to 60ppu.

However, it would have an increased impact on industry and market interference. This impact, however, must considered within the context of rising alcohol harms as latest alcohol-specific deaths show there has been an increase of 2% in 2022.

As Scottish Ministers are seeking a level which will derive greater benefits than the current policy, raising the level to 65ppu is proposed as the preferred position on price for the purposes of this consultation. This strikes an appropriate balance of achieving increased health benefits while minimising unnecessary interference in the market.

Further information used to come to this conclusion can be found in the Interim BRIA.

Above 65 pence per unit

Whilst a higher price per unit would further reduce alcohol harms, the Scottish Government recognises that the impact this would have on consumers and the alcoholic drinks industry would be greater than at lower rates.

Increasing the minimum unit price to 70, 75 or 80ppu would represent a considerable increase compared to inflation and impact on up to 80% of the market, including some premium products. This could be seen as a more significant distortion to the market.

Minimum unit prices above 65ppu are therefore not being proposed on the basis of the impact it could have on the alcohol industry and alcohol market.

It is considered that levels above 65ppu are not preferred in relation to the Scottish Government's view of balancing the harms caused by intervening with the public health benefit of doing so.

Further information used to come to this conclusion can be found in the Interim BRIA.

Conclusion

Ensuring MUP continues to deliver a significant public health benefit is central to the Scottish Government's policy. The Scottish Government proposes setting a price of 65ppu, which would not only maintain the value of the unit price relative to other products, goods and wages but would likely achieve greater public health benefits than have been seen at 50ppu. The Scottish Government is therefore proposing continuing MUP and setting the minimum unit price at 65ppu.

Contact

Email: MinimumPricingConsultation@gov.scot

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