Rationale for choosing 65ppu
Some respondents expressed a view that the proposed price of 65 pence per unit (ppu) was correct, or stated that it should be ‘at least’ 65ppu. Over two thirds of respondents who expressed this view were organisations, including coordinated responses from public health organisations and members of the European Alcohol Policy Alliance. Some respondents expressed a view that they supported the proposed increase mainly because inflation had eroded the benefits of MUP.
Some respondents expressed a view that they did not agree with the 65ppu price proposed because it was too high, or they expressed a view that they did not agree with either the rationale or method for arriving at that price.
Summarised reasons for opposing the increase to 65 ppu included:
- The current price of 50 pence per unit is already sufficient, or too high.
- A 30% increase was considered too large or would disproportionately affect those who could least afford an increase.
- The evidence was insufficient to justify the increased rate.
- Inflation had already increased the cost of alcohol and eroded people’s income.
- That a high inflation rate and the higher consumption levels resulting from the pandemic are temporary factors.
The Scottish Government commissioned the University of Sheffield Alcohol Research Group(SARG) to undertake modelling to inform the review of the level of MUP. The principal advantage of a preferred price of 65ppu is it is estimated to achieve the health benefits intended by the policy including mortality and hospitalisations averted and a reduction in years of life lost, at an increased level compared to when first introduced in 2018.
65ppu will impact on a greater share of the market than when MUP was introduced, with an estimated 64% of the off-trade market by volume sold below this average price level in 2022. This impact, however, must be considered within the context of rising alcohol harms as latest alcohol-specific deaths show there has been an increase of 2% in 2022.
On balance, the Scottish Ministers are agreed that 65ppu strikes the appropriate balance of achieving increased health benefits, as part of a range of overall prevention and treatment policies, while minimising unnecessary interference in the market.
A small number felt the proposed increase to 65ppu was too low and argued for this to be increased. Suggested figures were 70ppu, 75ppu and 80ppu. The primary reason for supporting a higher level was to ensure the policy maximised its impact.
Some respondents expressed a view that there potential negative business or economic impacts of the proposals to increase the price to 65ppu. These were expressed by both individuals and organisations and those in favour of and against continuing MUP. Concerns included, the impact on hospitality, smaller retailers, smaller brewers and distilleries, and tourism, suggesting there could be job losses in those sectors.
The Scottish Government Report , which was published 20th September 2023 considered evidence on the operation and effect of MUP over the five years between its implementation in May 2018 up to end April 2023. It draws from the evaluation of the policy led by Public Health Scotland and from the findings of a call for evidence which included Ministerial roundtable events, and engagement with relevant stakeholders and expert groups including public health and business sectors. It 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.
The evidence shows a 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.
Some respondents, primarily health-related organisations stated that initial concerns about potential negative impacts and unintended consequences of introducing MUP have not come to pass.
Details on all the factors, evidence and analysis considered in reaching proposals that were set out and consulted on were informed by the interim Business and Regulatory Impact Assessment., the full BRIA has been updated to reflect information received from the consultation and any other relevant evidence will be published in due course.
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