Alcohol - minimum unit pricing - continuation and future pricing: interim business and regulatory impact assessment

3. Consultation

This BRIA document accompanies a 9 week public consultation on the proposals to continue Minimum Unit Pricing (MUP) and to seek views on the preferred price per unit of 65 pence. The results of that consultation will enable the Scottish Ministers to make a decision, in addition to the wide range of evidence that exists, on whether to continue the intervention and, if so, at what price should the minimum price per unit be.

Engagement has been undertaken with a wide range of internal and external stakeholders in drawing up the two proposals set out in the public consultation.

The New Deal for Business^[32], announced in April 2023, sets out the Scottish Ministers' economic vision for Scotland supporting a wellbeing economy where business and trade can thrive while caring for people and planet, and recognising that becoming a thriving and healthy country that delivers and optimises positive outcomes, requires all sectors to work together. As part of the Scottish Government's commitment to the New Deal for Business, engagement has been undertaken with potentially affected businesses and business organisations in advance of drawing up consultation proposals.

We will continue to work with businesses to ensure the policy implementation, should it continue, is effective and proportionate, while still delivering the beneficial outcomes for population health that are being sought. Generally, feedback from businesses in the PHS evaluation of MUP and the roundtables held by the Scottish Government was that MUP as a policy was now viewed as part of the business as usual approach within the industry.

3.1 Consultation Within Government

The following areas in Scottish Government were consulted in the preparation of this interim BRIA:

• Scottish Government Food and Drink Division
• Scottish Government Business Support Policy & Governance Division
• Scottish Government Tourism and Hospitality Division
• Scottish Government Criminal Justice Division (Licensing team)
• Scottish Government Deposit Return Scheme Division

Within Local Government and Public Bodies:

• COSLA
• Licensing Standards Officers
• Police Scotland

Consultation took place with these policy areas and local government and public bodies given their role in various aspects of policy and delivery that relate to minimum unit pricing including impact on business and hospitality; impact on key sectors of economy in Scotland; future potential interaction with other policies; and the role of enforcement and licensing.

3.2 Stakeholder Consultation

There have been two rounds of consultation, both of which have focused on targeted stakeholders where MUP would potentially impact on their business/ organisation/ community. This consultation was primarily to meet the requirements of the 2012 Act for Scottish Ministers to consult a range of relevant stakeholders in the preparation of a final report on the operation and effect of the minimum pricing provisions. This was also an opportunity, in the event of continuation, to gather views on a potential change of price in order to retain the intended benefits of the policy.

The targeted consultations have taken various forms:

• Targeted stakeholder roundtable events held in summer 2022 and 2023.
• Individual meetings (either instead of the roundtable events or as well as).
• Written responses.
• An online survey to capture views on the level was provided separately in order to feed into the price review.

The first round of targeted consultation took place from August to October 2022, with the second round of targeted consultation events taking place over the summer of 2023, after the end of the 5 year review period and following the publication of PHS's Evaluation Review Report in June 2023. The Scottish Government's final report on the operation and effect of MUP also contains information on the roundtables and written responses.

Price Review Survey results

As part of work to review the level of MUP a survey was produced to ask stakeholders in different sectors their views about the impact of MUP at different levels. The survey was sent in 2022 and was open from 27 July 2022 until 30 September 2022. This exercise was repeated with the same questions in 2023 and ran from 6 July until 23 July 2023. 26 responses were received from a range of individuals, third sector organisations, and businesses in 2022, and received 39 responses in 2023 including three detailed separate responses which were submitted separately but are included within the summary below.

Individuals, Third Sector Organisations, and Service

2022 results – Summary of views from engagement

A reduction in MUP would increase the affordability of alcohol, leading to increased consumption, and therefore harms.

• People with alcohol dependence were unlikely to be motivated to cut down on their drinking through MUP alone.
• The pandemic and inflation have led to an 'erosion' in the policy's ability to deliver as effectively.
• Increasing the level significantly could lead to unintended consequences and wider societal harm.
• The time required for long term interventions such as MUP means it is too early to know fully the impact the policy is having and more time should be given to fully understand the effects of the policy.
• Those who supported the continuation recommended linking the level to an automatic uprating mechanism.

2023 results – Summary

• Increase in MUP could lead to a reduction in services use (e.g. liver clinics and in-patient hospital services) due to a reduction in alcohol-related harm.
• Additional resources and investment are needed to provide treatment and support for alcohol dependent people. People with alcohol dependency are unlikely to reduce their drinking through MUP alone.
• A significant increase in MUP could negatively affect people with alcohol dependency and their families as they may prioritise spending on alcohol over necessities.
• A decrease in MUP could lead to anti-social behaviour, increased staffing due to an anticipated increase in alcohol-related harm and death and additional pressure for the health and social care system.
• A reduction in MUP would send the message that the policy has not worked despite MUP being seen as being overall effective in targeting harmful drinkers.
• Supporters of MUP suggested setting an automatic uprating mechanism with a price which varies depending on inflation levels.
• An increase in MUP (e.g. 65ppu) could counter the effect of inflation and continue the benefits of the original 50ppu level. However, there is a risk that such increases could impact on spending power away from more deprived communities or families.

The views of stakeholders in the two sets of roundtables, written submission and online survey have been taken into account when considering the preferred policy option on continuation, and on price, for the purposes of consultation.

This interim BRIA accompanies a further full public consultation which seeks views on the Scottish Government's preferred policy option on continuation, and on the Scottish Government's preferred price.

Business

Businesses were a key group for the stakeholder roundtable events, as detailed above. They were also asked to fill in an online survey about the impact of any change in price in the event of continuation of MUP and how this might impact their business.

Business price review survey results

Businesses were asked to consider the impact of changes to MUP on different products and any potential positive or negative impacts this would have on revenue, profits, and additional costs.

2022 Results – Summary

• The current level of 50ppu seems to have had minimal impact on businesses, excluding cider.
• Respondents didn't support an increase for MUP, and were neutral regarding a decrease or removal of MUP.
• Retailers were generally seen to benefit the most from any potential increase in revenue as a result of an increase in MUP.
• There would be some potential costs associated with changing MUP mainly due to administrative changes.
• Majority of producers felt 3 months was sufficient lead time, retailers felt up to 12 months was required for any changes to MUP being implemented.
• DRS was raised as a serious concern for businesses and how this interacts with MUP.
• Treatment services were seen as a more targeted measure for helping those with alcohol dependence and MUP alone was too blunt a tool for all aspects of prevention and treatment required.

2023 Results – Summary

• Some businesses were critical of MUP, while others were in favour of keeping the current level of MUP (50ppu) as it will be "business as usual". For those who supported an increase in MUP, 60ppu was viewed as appropriate.
• Some respondents were worried about the risk of unintended consequences, such as shoplifting, staff abuse, black market selling, shift to illicit drugs, if alcohol was made more unaffordable.
• Respondents believed that other methods of tackling alcohol harm would be more impactful than MUP, and there's a need to address societal problems which may lead to higher levels of consumption through targeted measures rather than a blanket approach.
• MUP is only one aspect of addressing harmful and hazardous drinking. Respondents believed more effective campaigns to shift Scottish people's attitudes towards alcohol and appropriate treatment for people with alcohol dependence is needed.
• Complex issues, including the interaction between the new duty changes, DRS and MUP, were discussed.
• It was believed that retailers are likely to retain the profit of MUP if the level is increased, however, this will not be straightforward, and it should not be assumed that any additional revenue becomes profit in the supply chain.
• The time needed to implement any changes varied between three and 12 months.

Additional Engagement with Business

In addition to the roundtable events and price review survey, meetings were held with the following groups/ businesses to help understand how MUP has impacted them specifically and what a change in price might mean for them:

• British Beer and Pub Association
• Diageo
• Heineken
• Molson Coors
• Scottish Hospitality Group
• Scottish Licensed Trade Association
• Scottish Wholesale Association
• Treasury Wine Estates

Main issues raised during targeted consultations and SG response

This section will also be updated following the public consultation.

Deposit Return Scheme's interaction with MUP:

Many businesses were concerned about the potential interaction between Scottish Government's deposit return scheme (DRS) and MUP and whether this would be counter to the aims of MUP.

Their concern centred on the effect of a flat rate, per container deposit which could make multipacks of lower strength alcohol products more expensive at the point of sale compared to a single container of a higher strength alcohol product, or a larger single container of equivalent strength alcohol product.

When introduced, the deposit will be fully returnable and retailers will be required to display information clearly about returns. Under the Deposit Return Scheme, it is expected that most people will use returned deposits to cover future deposits on drinks containers. Evidence from other deposit return schemes on purchasing behaviours suggests that, once refunds are taken into account, the impacts are likely to be low, and was not expected to cause consumers to change their choice or preference for a certain brand.^[33]

Given the change in timescales for DRS and the ongoing work with other nations on interoperability ongoing consideration will be given to the interaction of MUP and DRS and will update impact assessments appropriately.

The scheme is not expected to launch until October 2025 and work will continue to ensure that the combined impact of DRS and MUP are proportionate and deliver the aims of both policies.

Improved awareness raising amongst those most impacted by MUP – those drinking the most alcohol and alcohol support and treatment services:

Although MUP is not the sole intervention intended to target people with alcohol dependence, it is recognised that they will be impacted by any changes to the level given that they form a subset of hazardous and harmful drinkers.

In the event of continuation of the policy, work will be done in advance of any change to the level to ensure that treatment services are aware of a new price so they can prepare to provide support to people with alcohol dependence.

Response from alcohol support and treatment services on potential increased number of people seeking their services:

Those who work to provide support and treatment felt that when MUP was first introduced there was little warning for people with alcohol dependence who were more likely to be impacted by MUP.

Work with Alcohol and Drug Partnerships will be carried out in advance of any change to the level of MUP so services are prepared for any change in demand.

Perception that Scottish Government is focussing more on drugs than alcohol:

The perception that tackling drug deaths was more of a priority to Scottish Government than tackling alcohol harms was raised.

Alcohol and drug-related harms are equally important as are related public health issues in Scotland. In March 2023 the First Minister moved responsibility for Alcohol Policy to the Ministerial portfolio which had previously focused on Drugs Policy. The creation of a Minister for Drugs and Alcohol Policy signals our recognition of the need to address both public health emergencies together.

In addition, the Scottish Government's alcohol and drug strategies have a shared aim to improve and save lives, at the core of which is ensuring that every individual is able to access the treatment and recovery they choose.

Work is ongoing to ensure people with alcohol use disorder continue to receive the same quality of care as those with drugs misuse. The forthcoming UK-wide Alcohol Treatment Guidelines will include advice for alcohol treatment services and will form the basis of new Scottish treatment standards aligned with the existing Medication-Assisted Treatment Standards for drug treatment. There is also ongoing development of alcohol treatment targets alongside Stage Two of the Drugs Targets Implementation in 2024.

Perception that MUP becomes the only policy to tackle alcohol harm – what other major policies are being pursued? MUP is more about prevention long term, what is being done about those needing treatment now?:

Scottish Ministers remain committed to the Alcohol Brief Intervention (ABI) delivery programme, which has been in place for ten years. Work is ongoing with Public Health Scotland (PHS) to review the evidence on current delivery of ABIs to determine how the system could better meet the needs of individuals.

Work is ongoing to support the UK Government on reviewing and updating clinical guidelines for alcohol treatment. The guidance will look to introduce new approaches to treatment and will apply to a broad range of settings including primary care, hospital and justice settings. Development of the guidance is supported by a UK-wide expert group, which includes Scottish representatives.

In the Cross-Government Plan published in January 2023 (in response to the Drug Deaths Taskforce recommendations) the Scottish Government has committed to develop Alcohol and Drug Treatment and Recovery Standards, effectively expanding the Medication-Assisted Treatment standards currently being implemented for drugs. Those wider standards will encompass the UK alcohol treatment guidelines as appropriate.

Impact of an increased level of MUP when businesses are recovering from COVID-19 pandemic and the current cost crisis:

This criticism was made mainly by alcohol drink producers and retailers rather than hospitality organisations due to the fact MUP does not directly impact on-trade businesses' price points.

As part of PHS's evaluation, they found MUP impacted on the price of some products more than others, particularly some ciders and spirits. This was reflected in alcohol sales, with the greatest reductions in sales observed among these products. Retailers found that loss in sales was generally offset by an increase in price; the impact on profits overall is not clear.

Short timeline last time for implementing MUP criticised by businesses:

The short implementation time was a criticism made by businesses when MUP was implemented in 2018. Further consideration is being given to how best to update business and work to give as much advance notice as possible should a new Minimum Unit Price be introduced.

Impact of cost crisis on drinkers:

The current cost crisis was an important consideration in deciding whether MUP as a policy should continue and at what price. Further detail on how we have considered the cost crisis can be found in the section on setting a preferred price.

Banded approach to MUP

An alternative mechanism raised by one business was to introduce a 'banded approach' where there is a higher level of MUP for higher strength products, and a lower level for lower strength. This was felt to be a more targeted approach that could have better outcomes for harmful drinkers.

The Scottish Government response to this is that a MUP targets the amount of pure alcohol in a product. It is the alcohol that causes the harms and it is these harms that we are trying to reduce. In doing this, MUP treats all products equally in terms of the amount of alcohol present – the higher the alcohol level, the more units of alcohol a product would contain at equal volume and therefore the higher the minimum price would be.

3.3 Public - Public Attitudes Surveys

As part of the PHS evaluation of MUP, a study^[34] was carried out on public attitudes to MUP in 2019 and then compared to attitudes to MUP prior to it being implemented. Data were drawn from the 2013, 2015 and 2019 waves of the Scottish Social Attitudes Survey with the same questions on MUP being asked in each wave.

The key findings were:

• In 2019, respondents were almost twice as likely to be in favour of MUP (49.8%) than to be against it (27.6%).
• Comparing public attitudes to MUP in 2015 (41.3% in favour, 33.4% against) to 2019 suggests that attitudes have become more favourable during the same time frame in which MUP was implemented.
• The most common reasons for being in favour of MUP were concerned with alcohol as a problem in Scotland in general.
• The most common reasons for being against MUP were concerned with whether or not MUP will work in reducing alcohol-related harm.
• Reasons for being for or against MUP tended not to change over time.
• All sub-groups by deprivation, sex, and age had more in favour of MUP than against.

The study concluded that the public is generally more in favour of MUP than against it in 2019, and that attitudes appear more favourable between 2015 and 2019 – the same time frame in which MUP was implemented.

Further public attitudes research was commissioned by the Scottish Government in 2023, which asked the same questions as in previous surveys but used a different methodology so findings are not comparable.^[35]

The 2023 survey found that:

• 43% of respondents were in favour of MUP, while 38% were against it.
• The most common reasons for being in favour of MUP was to help tackle problems caused by alcohol in general.
• The most common reasons for being against MUP was that it punishes everyone for what some drinkers do.
• Men, people aged 55-64 and 75+, and people from the most deprived areas were more likely to be against MUP than in favour.
• People from the lowest income households (up to £25,999) were most likely to be strongly in favour of MUP and least likely to be against MUP compared to other income groups, but were less likely to be in favour of MUP overall than average.

Conclusions from consultations

It has been concluded from the feedback given to date, that MUP has not had a significant negative impact on the majority of businesses, that there are mixed views from the business sector on the continuation of MUP, with not all in support. Public health stakeholders have been positive about the impact of MUP on alcohol-related harms and support the continuation of the policy.

Consideration has been given to the views of businesses and public health stakeholders in regard to a change in price. It is clear a careful balance must be met when deciding on a potential new level in order to ensure that it does not negatively impact businesses whilst also be high enough to have a positive impact on health. This balance is considered further in the 'Options' section.

This BRIA will be updated following the conclusion of the public consultation.