Impact of Minimum Unit Prices on alcohol prices
MUP does not increase the price of all alcoholic drinks – it is the price of alcoholic drinks that are currently sold at less than 65 ppu that would have to rise if a new increased price at that level is introduced. The table below gives some examples of the lowest possible price that alcohol could be sold for if a Minimum Unit Price of 65 pence comes into effect.
|Strength: Alcohol By Volume (ABV)
|65 ppu Minimum price i.e. cannot be sold for less than this price
If an alcoholic drink is already selling at a price which is higher than its minimum price, there will be no need for that price to change. For example, the minimum price for a 700ml bottle of whisky with an ABV of 40% will be £18.20 at 65ppu. In this example, if a bottle of 40% ABV whisky is already priced at £20 then the price won't have to change after the preferred price is introduced.
Who will be affected?
The PHS evaluation found that MUP at 50ppu led to a reduction in consumption across the population, with the greatest reductions observed in households that purchased the most alcohol, with very little or no impact on those purchasing at lower levels. The analysis of alcohol sales data found that the greatest reductions were consistently reported for cider and spirits compared to other types of alcohol.
In 2021, the Scottish population bought enough alcohol for everyone aged over 16 to drink 18.1 units every week (9.4 litres of pure alcohol in a year). This is equivalent to around 36 bottles of spirits, or around 90 bottles of wine, per adult each year.
Positive impacts such as reduced alcohol-related harm would impact individuals and communities, including people who currently consume alcohol at levels considered to be harmful or hazardous. Setting a new minimum unit price would impact all people who purchase alcohol, however the pricing impact would likely be greatest on people who purchase (and, in many cases, consume) larger quantities of alcohol. The impact on people purchasing and consuming alcohol within the Chief Medical Officers' recommended guidelines is anticipated to continue to be small.
There is a risk that people with alcohol dependence may be negatively impacted by an increase in MUP because the increased price of alcohol that is cheap relative to strength is likely to increase the cost for them to maintain their current levels of consumption. Scottish Government wider policy on alcohol harm treatment aims to support those with alcohol dependence to reduce their levels of consumption, given the risk it poses to health. We will liaise with alcohol treatment services in advance of any change. Further information about how the Scottish Government is working to improve access to alcohol treatment is outlined in Annex C.
There would be impacts on businesses from the continuation, or the increase, of the price per unit. This would be as a result of the price of some products rising to meet a new minimum unit price, which may reduce consumer demand, but would increase the sale price of the product. This includes off-sales (retailers such as supermarkets, convenience stores, off licences) and producers. The PHS evaluation suggested that there was no consistent evidence that MUP had had a positive or negative impact on the alcoholic drinks industry as a whole.
How do you work out what the Minimum Unit Price is?
If Minimum Unit Pricing is continued, it will continue to apply to the price of all alcoholic drinks in Scotland. All licensed premises in Scotland will have to continue to ensure that alcoholic drinks are not sold below their minimum price according to the units contained in each drink.
The minimum price for an alcoholic drink is calculated as follows:
- price per unit of alcohol (£) x strength of alcoholic drink (ABV) x volume of alcoholic drink in litres
For example using the format from the original policy notes for the 2012 Act:
A standard size (700ml) bottle of spirits with an ABV of 37.5% would have a minimum price of:
- 0.65 x 37.5/100 x 0.7 x 100 = £17.07
A standard size (750ml) bottle of wine with an ABV of 12.5% would have a minimum price of:
- 0.65 x 12.5/100 x 0.75 x 100 = £6.09
What effect would an increased minimum unit price have?
At 50ppu, the PHS evaluation found strong evidence that MUP was associated with an estimated 13.4% reduction in deaths that were directly caused by alcohol consumption, and an estimated 4.1% non-significant reduction in hospital admissions that were directly caused by alcohol consumption, relative to England. These estimated reductions were largely made up of reductions in deaths and hospitalisations due to chronic alcohol-attributable conditions (e.g. alcoholic liver disease). Increasing the minimum unit price to 65ppu is estimated to achieve greater levels of benefits to those that the evaluation found.
One study from the PHS evaluation considered data from over six years pre-MUP, and over two and a half years of MUP implementation. The Scottish Government is aware that for some illnesses that are associated with drinking alcohol, it will take a long time to see the full benefit of drinking less. It may take 20 years for all the benefits of the policy to be realised.
Further details are in the Interim BRIA.
If MUP continues and the price is increased, the unit price will be kept under review to ensure it remains effective and proportionate.
As set out in the Interim BRIA it is the Scottish Government's assessment that the alcohol industry is likely to be impacted by the proposal to continue MUP and increase the minimum unit price. This impact is an accepted consequence of the decision to pursue the public health benefits associated with the intervention.
1. Do you think Minimum Unit Pricing (MUP) should continue?
2. If MUP continues, do you agree with the proposed Minimum Unit Price of 65 pence?
3. We invite comments on:
- the Scottish Ministers' proposal to continue MUP, and
- the proposed Minimum Unit Price of 65 pence.
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