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Dublin: 2 °C Wednesday 16 January, 2019
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12 cans of Heineken for €20? This is how minimum pricing could affect your pocket

Each unit of alcohol will be required to cost €1 under the Public Health (Alcohol) Bill.

The new Public Health (Alcohol) Bill has been under consideration by the government since late 2015 but has not yet been enacted.

It is a far-reaching bill with new legislation on aspects such as minimum pricing, advertising and product labelling.

Last week, we took a look at the impact the law’s advertising restrictions would have and, this week, we’ll look at the issue of minimum pricing on alcohol.

SITTING ATOP THE lengthy Public Health (Alcohol) Bill is the provision that will allow the Minister for Health to increase the minimum price per gram of alcohol that can be charged in Ireland.

Minimum pricing has support from across the political spectrum, but what would it actually involve? And how will it work in practice?

So what’ll change?

TheJournal.ie picked a supermarket at random, checking out its promotions to see if these prices would be possible when minimum unit pricing comes in.

This 12-pack of cans of Heineken is on sale for €20.

IMG_3152 (1) Source: TheJournal.ie

Under minimum pricing, this case of Heineken would need to cost at least €20.35.

This bottle of Huzzar vodka, above the brands of Absolut is on sale for €19.

IMG_3154 (1) Source: TheJournal.ie

It would need to cost at least €20 under the new legislation.

And this 12 pack of cans of Guinness, at €18, would need to cost at least €19.90 under minimum pricing.

IMG_3153 Source: TheJournal.ie

These increases listed here are small, but minimum pricing would certainly have an effect on much cheaper alcohol.

So what’s the big deal? Let’s take a look.

What the legislation says

Under the terms of the legislation, the minimum price per gram of alcohol would be set at 10 cent.

To find the minimum price for a particular alcohol product, you find how much the drink weighs and multiply it by 10 cent.

In practice, this would mean that the average pint of beer of two units (around 20g) would be required to cost at least €2.

Anyone who has bought a pint of beer in a pub recently would say that there’s little chance of a pint costing less than €2, anyway. But it is the sale of beers at supermarkets and off licenses where this will have a major impact (more on this later).

The rationale in implementing this measure is that, as the government continues to tax alcohol heavily, problem drinkers will increasingly opt for cheaper, and higher-purity, brands of alcohol.

Unlike a tax increase which the retailer can choose to absorb themselves or pass onto the customer, this minimum price will be compulsory across the board.

Also included in this part of the legislation is the provision that the Minister for Health can, three years after the legislation is brought in, increase the minimum price.

The Minister will then be able to adjust the minimum price every 18 months.

Any decision to increase this price will be required to take the latest up-to-date research available on societal figures such as the rate of alcohol consumption, patterns of alcohol consumption, the health related risks and societal harm.

In response to a written question in the Dáil, Minister of State for Health Promotion, Marcella Corcoran Kennedy, explained how the bill should work: “MUP is a targeted measure, aimed at those who drink in a harmful and hazardous manner, and designed to prevent the sale of alcohol at very cheap prices.

90432515_90432515 Minister of State Marcella Corcoran Kennedy Source: Sam Boal/Rollingnews.ie

“MUP is able to target cheaper alcohol relative to its strength because the minimum price is determined by and is directly proportional to the amount of pure alcohol in the drink.

The MUP is set in the Public Health (Alcohol) Bill at 10 cent per gram of alcohol, which equates to a minimum price of €1 per standard drink.

In practice, the government hopes that this will reduce the effect of harmful drinking among those that drink the most.

Corcoran Kennedy added that the measure will have a positive impact on rates of heart disease and cancer, and will also have some immediate effects on “health costs, crime costs and loss of productivity due to absenteeism”.

The price of a pint?

To find out how much an alcohol product weighs, for the purposes of this legislation, the following formula is used.

alcohol bill Source: Oireachtas.ie

So, for a 750ml bottle of wine at 12% strength, you would derive its grams like this

  • 750 x 0.12 x 0.789 = 71.01 grams

To then get the minimum price for that product, then you would multiply that figure of 71.01 by €0.10.

Thus, retailers would be obliged to charge at least €7.10 for this bottle of wine.

For a bottle of vodka, meanwhile, at 700ml and 37.5% volume, you would use the same method:

  • 700 x 0.375 x 0.789 = 207.11 grams.

No matter what brand it is, this bottle of vodka would be required by law to cost at least €20.71 under the new minimum pricing laws.

And, again, the same would apply to a 500ml can of beer at 5% alcohol volume.

  • 500 x 0.05 x 0.789 = 19.725 grams

Each can of beer would then be required to cost at least €1.97.

Will this be a major change?

Almost certainly, but not for every alcohol product and often not in a manner which drastically raises the price.

Discounted alcohol is commonplace across every supermarket and off license in Ireland.

Minimum pricing has the potential to hit the cheapest spirits, such as vodka, and some of the cheaper wines on the market but it doesn’t appear as if it will have an impact on some of the more popular beer brands, for example.

90246445_90246445 Source: Sasko Lazarov/Rollingnews.ie

In one of Ireland’s biggest supermarkets at the moment, eight cans of Guinness are available at a discounted price of €13.

When you do the sums (for a 500ml can at 4.2%), this breaks down to a minimum pricing requirement of €1.65 per can.

At the moment, the discounted price offers the Guinness at €1.62 per can. In this case, minimum pricing won’t constitute a major change.

In a different supermarket, another special offer has a special offer with a 20 pack of bottles of Heineken for €20.

Again, when you calculate the minimum price under the government’s proposed laws (330ml bottle at 4.3%) this works at €1.12 per bottle.

This special offer would mean this promotion could not run its current state, as it is 12 cent a bottle over the minimum pricing threshold.

While perhaps not a major change in these areas, it would affect cheaper brands the most.

One brand of rum is currently being sold at a discount retailer at €12.29 for a 700ml bottle at 40% alcohol.

Under minimum pricing, this would be required to cost at least €22.10.

In that same retailer, a 750ml bottle of red wine (12%) is currently listed for sale at €4.99. This would be required to cost at least €7.10.

Will minimum pricing work?

It’s a big question with no clear answer.

In the FactCheck referenced above, TheJournal.ie found that evidence put forth by Minister Corcoran Kennedy when citing a study from British Columbia in Canada as insufficient to show that minimum pricing has been “proven to work”.

In fact, according to the 2013 study from British Columbia, the number of alcohol-related deaths and hospital admissions actually rose between 2002 and 2013.

Another commonly cited study in support of these measures is a study from the University of Sheffield, which says that minimum pricing would lead to an “immediate reduction in consumption” of alcohol in Ireland, with moderate drinkers affected the least in terms of how much they consumed and spent on alcohol.

shutterstock_71202661 Source: Shutterstock/val lawless

The study estimated that the most harmful drinkers would be affected most by the measures.

It suggests that minimum unit pricing would save the lives of 197 people per year who would have otherwise suffered alcohol-attributable deaths.

It also estimates that it would save €1.7 billion over the next 20 years, through reductions in health, crime and workplace harms.

Study co-author Professor Petra Meier said: “Our study finds no evidence to support the concerns highlighted by government and the alcohol industry that minimum unit pricing would penalise responsible drinkers on low incomes.”

The problem with proving that minimum pricing will work at reducing alcohol-related harm is that there is not a great deal of research completed with actual real-life data to back it up.

The Sheffield study used a statistical model to suggest that minimum pricing should yield better health outcomes for the general population, but that does not necessarily prove that the measure working in reality.

In Ireland, the prevalence of alcohol use disorders is much higher for men than women.

20170208_Alcohol Source: Statista

One Irish study, from the Royal College of Surgeons in Ireland and the Health Research Board, yielded similar findings to the Sheffield study, which said that minimum pricing of €1 per unit would target only the “heaviest drinkers”.

It involved a national survey of 3,187 respondents who completed a diary of their previous week’s alcohol consumption.

This report found that one in seven (14%) Irish adults who drink alcohol, purchase it at less than €1 per standard drink which is below the minimum unit price.

The majority of this low-cost alcohol (69%) was purchased in supermarkets.

Lead researcher Dr Gráinne Cousins said: “Some opponents of minimum unit pricing are concerned that consumers using alcohol in a low-risk manner will be punished with higher prices.

Our findings do not support these concerns, as unlike tax or excise measures, the introduction of a minimum unit price would affect less than 14% of the population.

However, with no definitive long-term study proving that without doubt proves that it works, minimum unit pricing remains open to criticism.

Court Case

What does appear certain, however, is that it has the potential to face a legal challenge here after a case at the European Court of Justice had raised doubts it could be implemented at all.

Last December, the European court decided that introducing such a measure proposed in Scotland was illegal, but left it up to the Scottish courts to make the final decision.

With the judgement by the EU court in Scotland, Ireland is similarly open to a legal challenge on minimum pricing.

Lobbyists for the alcohol industry, however, may be dissuaded from taking such action as the final decision from Scotland’s highest court ruled that minimum unit pricing does not contravene national and European law.

However, the Scotch Whisky Association has not yet given up in its attempts to block minimum pricing and is bringing the case to the UK Supreme Court.

Ross Mac Mathúna, from the Alcohol Beverage Federation of Ireland (ABFI), told TheJournal.ie that his group would have no desire to bring a similar case against the Irish government here.

Having said that, the group are opposed to minimum unit pricing. He said: “We have seen no evidence to prove this works. We would propose bringing in a ban on low-cost selling as an alternative to this at the moment.”

Support

In terms of political support, minimum pricing has been largely welcomed.

In the Seanad last week, Fine Gael’s Jerry Buttimer made the comment: “We all support minimum unit pricing.”

Fianna Fáil TD Jack Chambers said that the provisions of the bill would be “very important” in addressing the currently “unsustainable” health impacts of alcohol in this country.

Fine Gael Senator Catherine Noone said: “Minimum pricing will help because there is a clear correlation between the price of alcohol and the amount people drink. Addressing price would be a step in the right direction.”

Doctors are on side as well, with a statement from the National Association of General Practitioners (NAGP) expressing their support for the provisions of the bill last week.

Its president, Dr Emmet Kerin said: “This is an important bill, legislating for the first time on alcohol consumption as a public health measure.

Our health system is overwhelmed. Health promotion initiatives such as the Public Health (Alcohol) Bill are critical to reducing preventable diseases and keeping patients well.

Groups raising awareness around the dangers of alcohol are also supporters of the provision.

Alcohol Action Ireland reject the claim that a ban on below-cost selling would be more effective as it cannot “target strong, cheap alcohol” while MUP is “able to target cheaper alcohol relative to its strength because the price is determined by and directly proportionate to the amount of pure alcohol in the drink”.

A statement from Alcohol Action Ireland said: “MUP sets a “floor price” beneath which alcohol cannot legally be sold, but will not increase the price of all alcohol products sold in Ireland, instead targeting the products that are currently very cheap relative to their strength in supermarkets.”

shutterstock_190084901 Source: Shutterstock/Radu Bercan

One issue of contention on MUP, away from the perceived health benefits, is the presence and proximity of Northern Ireland.

Currently, there are no concrete plans to introduce a similar measure there, and with the falling price of Sterling already acting as an incentive to shop up North, Mac Mathúna said this could drive more consumers north of the border to access alcohol at lower prices.

Labour Senator Ged Nash expressed similar concerns, pointing out that the synchronisation between the Irish government and the Northern Irish Executive on this issue is “extremely important if we are to achieve the ambitions of this legislation”.

Mac Mathúna adds that there will be “unintended consequences” of setting a floor price for alcohol, as setting a floor price means that the floor can then be raised further.

Indeed, Finance Minister Michael Noonan has said he will not implement his planned sugar tax until the UK does the same – to ensure symbiosis between the two jurisdictions.

Conclusion

MUP will not raise the price of many drinks in supermarkets and off-licenses, but it undoubtedly targets some of the cheaper, stronger products on the market.

The studies that have been completed to date suggest that it will benefit the health of the general population, without penalising casual or low-risk drinkers.

Having said that, there is no definitive proof that it will reduce alcohol-related harm across society.

With the government set to plough on with this top line provision of the Public Health (Alcohol) Bill, Ireland could be the first country to find out if minimum pricing works.

Next week, we’ll take a look at the issue of alcohol labelling, the state of Ireland’s relationship with alcohol and how that could evolve under the new bill.

What do you think?

So, what are your thoughts? Do you support the introduction of minimum unit pricing on alcohol in Ireland?


Poll Results:





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About the author:

Sean Murray

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