Commission prefers higher alcohol tax to combat binge drinking

Binge drinking alcohol.JPG

This article is part of our special report Reviewing Europe’s alcohol harm strategy.

The European Commission is more favourable to raising taxes on alcohol over setting a minimum price level following intense debate in Britain over Prime Minister David Cameron's proposed crackdown on binge drinking, a Commission official told EURACTIV.

The UK government on 27 March proposed a minimum price of 40 pence per unit of alcohol in England and Wales – a bottle of wine contains 10 units – in an effort to “turn the tide” against binge drinking. Similar proposals are already under consideration in Scotland.

Under such price proposals, retailers are prohibited from offering alcohol at cheaper rates, though some in the British alcohol industry suggested minimum pricing would face a court challenge on competition grounds.

Commission set to evaluate its alcohol strategy

The UK government on 27 March proposed a minimum price of 40 pence per unit of alcohol in England and Wales – a bottle of wine contains 10 units – in an effort to “turn the tide” against binge drinking. Similar proposals are already under consideration in Scotland.

Under such price proposals, retailers are prohibited from offering alcohol at cheaper rates, though some in the British alcohol industry suggested minimum pricing would face a court challenge on competition grounds.

Commission set to evaluate its alcohol strategy

A Commission spokesman told EURACTIV the EU’s alcohol strategy will be "evaluated" later this year. “From the EU’s tax policy angle, the Commission believes minimum tax rates to be preferable to minimum pricing for alcohol.”

Minimum excise rates “put all products on an equal footing from a market perspective, whereas minimum prices can increase the profit margin of products with the lowest production cost,” the spokesman said.

Making alcohol more expensive was only "one of the possible measures to reduce alcohol-related harm”, the spokesman aid.

Price measures should form part of a comprehensive approach to alcohol abuse and fall mainly under the responsibility of member states, the spokesman added. He said that in relation to its evaluation of its informal alcohol strategy, which the EU executive is finalising later this year, “the Commission has been discussing pricing issues with industry, member states and NGOs”.

UK proposal would benefit supermarkets

The UK move came as part of a general strategy document on alcohol, which plans to “change the drinking culture, from one of excess to one of responsibility”, and to “end the notion that drinking is an unqualified right”.

The UK government’s plans to impose a minimum unit price could bring an annual £850 million windfall for the drinks industry, according to a leading think tank, the Institute for Fiscal Studies.

The IFS said the UK would be better to introduce a “floor price” for alcohol through the duty system instead so that the revenue raised went to the Treasury rather than manufacturers.

Consumption of alcohol in the UK has doubled since the 1950s and there are now 10 million adults drinking more than they should, government figures show.

“Binge drinking isn't some fringe issue, it accounts for half of all alcohol consumed in this country. The crime and violence it causes drains resources in our hospitals, generates mayhem on our streets and spreads fear in our communities,” according to UK Prime Minister David Cameron.

He added: “We're consulting on the actual price, but if it is 40p that could mean 50,000 fewer crimes each year and 900 fewer alcohol related deaths per year by the end of the decade.”

“The government needs to make sure it does not just create a cash windfall for the supermarkets, instead of lowering prices of other goods or supporting better prevention and treatment of alcohol abuse to cut crime further and save lives,” said the shadow UK Home Secretary, the Labour Party’s Yvette Cooper.

“I think one has to be quite sceptical,” said Gavin Partington, interim chief executive of the Wine and Spirit Trade Association. “Only a few months ago you have got two ministers saying they understand it to be probably illegal, and suddenly now they are advocating it - I don't think the legal position has changed any.”

“Irresponsible drinking has cultural causes and retailers have been hugely engaged in information and education to change attitudes to drinking,” according to Andrew Opie, of the British Retail Consortium. “It's a myth to suggest that supermarkets are the problem or that a pub is somehow a safer drinking environment. Effectively, a minimum price is a tax on responsible drinkers,” Opie added.

“Health care workers who struggle every day to cope with the impact of our nation's unhealthy drinking will welcome tough new policies in areas such as price and licensing that are based on evidence and should bring about real benefits,” said Eric Appleby, of Alcohol Concern.

“Europe’s brewers are opposed to further punitive tax hikes that harm the brewing sector, kill off further jobs and thereby damage Europe’s growth prospects. Beer consumption in the EU already declined by 8% in the two years following the start of the economic crisis, whilst 260,000 jobs were lost, primarily in the bars, pubs and cafés that depend on beer,” according to Pierre-Oliver Bergeron, secretary-general of The Brewers of Europe, the trade confederation of European brewers associations and breweries.

“As to whether tax and price increases are an effective way of addressing alcohol-related harm, we can only draw people’s attention to the fact that the highest prices and taxes are to be found in Scandinavia and the British Isles, the countries that interestingly also have the highest levels of binge drinking in Europe,” Bergeron concluded.

“Price plays an important part in consumption levels. And minimum pricing is a very equitable way to curb binge drinking and alcohol related harm as it will primarily affect young people and heavy drinkers,” said Monika Kosinska, secretary-general of health NGO the European Public Health Alliance (EPHA).

"There is a pressing need for a wide range of measures to tackle excessive alcohol consumption. A minimum pricing scheme supported by a number of other measures, such as restrictions on the volume of adverts promoting alcohol, will help turn back our increasingly damaging patterns of consumption. The European Commission is to propose a new European Alcohol Strategy. We look forward to strong proposals that will ensure a level playing field across EU countries," concluded Kosinska.

Europeans have the highest per-capita consumption of alcohol and drinking causes nearly 1 in 10 of cases of ill health and premature death. 

EU rules on excise duties fix minimum tax rates for different categories of alcoholic drinks. Member states must apply at least this minimum, but there is nothing in EU rules prohibiting countries from setting minimum prices for alcohol, so long as these prices are compatible with EU rules, such as no discrimination between imported goods and domestic goods, and no restriction on the free movement of goods.

The Commission’s informal alcohol strategy will be evaluated later this year. The policy objective of the strategy is to reduce the health and social harm due to alcohol consumption.

By end of 2012: Commission set to complete evaluation of informal alcohol strategy.

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