The UK Government Restrictions on the Sale of Alcohol - Essay Example

UK government restrictions on the sale of alcohol Introduction As per UK government Alcohol Strategy , UK witnessed about 2 million alcohol-associated hospital admissions and 1 million alcohol-associated violent crimes in 2010/11 .Binge drinking among 15-16 year olds in the UK seems to be on the increase, and the levels of binge drinking is too high as compared to many European nations. Further, alcohol is one of the three gravest lifestyle risk factors for death and disease coming closely after smoking and obesity. The cost to UK society as regards to alcohol –associated injury is now projected to cost about £ 21 billion per annum (HC Health Committee 2012:3). As per Royal College of Nursing, the major source of premature death and morbidity rates in the UK is attributed to excessive alcohol consumption. As per WHO, alcohol is the third major risk element for premature death in developed nations besides both blood pressure and tobacco (HC Health Committee 2012:9). As per Alcohol Concern, over one million individual are treated in the hospitals each year due to alcohol associated health issues. While the alcohol driven disorder and crime costs over £ 11 billion per annum, the alcohol costs the NHS £2.7 billion each year. After smoking, alcohol is the second biggest risk factor for cancer. In more than 50% of all child protection cases, parental drink factor is considered to be prime factor. Over 50% of 11 to 15 aged children have tried alcohol in UK. Every day, more than 200,000 people report to work with hangover issues. Over 25% of the adults are taking alcohol in excess of government recommended guidelines (Alcohol concern 2012:1). Over 10 million adults in UK now drink more than the suggested daily maximum whereas 2.6 million of them drinking more than 200% of the above. About 25% of UK adults take alcohol drinks at hazardous levels whereas the figures of dependent drinkers now hovers around 1.6 million. The number of people admitted into hospitals for alcohol related harm increased by 52% between 1996 and 2006 (Alcohol concern 2012:1). NHS is the worst sufferer due to alcohol misuse. In 2009/10, the number of hospital admissions in UK was 1.1 million, a 100% increase is since 2002/03. This figure could reach a historical record of 1.5 million per annum if it is unchecked by the UK government. As per NHS Information Centre (2009), the cost of alcohol to U.K. society is considered to be even mammoth figure which is likely to stand at £ 17 to 22 billion per annum. (HC Health Committee 2012:9). As per Deluca (2009), in an Accident and Emergency Department (A & E), about forty percent of weekend attendances and about seventy percent of early hour’s attendances are caused by alcohol. This research essay will make an earnest attempt to evaluate whether UK government restrictions on the sale of alcohol is fair or not. 2- UK government restrictions on the sale of alcohol- An Analysis Alcohol policy developments under erstwhile Labour Government in UK From April 2010 onwards, a code of practice including statutory conditions for the marketing of alcohol was introduced. A public consultation exercise was made in 2009 and the authority to introduce the same was sanctioned through the Policing and Crime Act, 2009. Although 2010 code prohibited reckless alcohol promotions, it is silent about minimum pricing of alcohol products in UK. A member of Liberal Democrat party unsuccessfully introduced an amendment which would have offered the licensing officials authority to initiate action against alcohol shops and supermarkets which untiringly marketed alcohol at below cost price. The earlier UK government argued that it would be prejudicial if responsible drinkers was asked to pay more for their alcoholic drinks due to a small minority of people who drink recklessly. The Chief Medical Officer (CMO) of U.K. in his 2009 annual report suggested fixing a minimum price for alcohol at 50p per unit. As per the CMO report, this would aim “binge drinking” while not touching the moderate drinkers. The above report further states that there is a clear correlation between consumption and price of the alcohol. As per demand theory in economics, if the price increases, the demand decreases, although not correspondingly across all drinkers. Thus, the alcohol price increase will generally minimise the heavy drinkers consumption to a greater magnitude than they minimise the consumption of moderate drinkers. In case of increase in prices of alcohol, those who consume more seem to select cheaper drinks. Thus, announcing a minimum price per unit alcohol would hence impact heavier drinkers for more than those who drink in moderation. The then Opposition Leader David Cameron was of the view that he preferred to impose high tax on all alcohol drinks preferred by binge drinkers. The Health Select Committee weighed the two options between to declare minimum pricing to levy higher taxes to minimise alcohol abuse. The Committee in their January 2010 report buttressed the levy of minimum pricing to minimise alcohol abuse thereby by introducing increase in duties, which is facilitated by an enhancement in the minimum alcohol duty rates which was set across the EU. The Cabinet Office in 2003 projected an aggregate of annual cost of alcohol misuse to the UK economy at about £ 20 billion per annum. As per the National Social Marketing Centre, the cost for the reduced quality of life was projected at £55.1 billion per annum. Long run alcohol abuse can result in numerous health issues, including kidney and liver diseases, chronic and acute pancreatitis, high blood pressure, heart diseases, stroke, depression, cancers and foetal alcohol syndrome. Between 1989 and 2002, alcoholic liver disease admissions to hospitals enhanced by 100%. In 2010 alone, there were about 8790 deaths due to alcohol. As per Alcohol Concern (2011), alcohol is found to be cause for 45% of the suicides, 6% of the breast cancer deaths and 50% of self-harm deaths in UK. Consumption of alcohol is governed in UK by an intricate mixture of government administration that function within country-oriented political and legal background. In UK, the local government is directly accountable for administering the alcohol supplies through licensing, scheduling and trading norms. UK government is planning to introduce a ban on cheap alcohol and this will come into force before the commencement of the football World Cup finals as part of UK government’s measures to minimise problems created due to drinking. From April 6, 2014, supermarkets and other liquor shops will be prohibited from marketing booze at below cost price under the UK government new licencing restrictions. The Home Office made a reasoning on the clampdown by referring to a research study demonstrating low-price alcohol offers by vendors were often correlated with major sporting events like football World Cup finals, Olympic Games, etc. Home office is of the view that this move will slice down on youth “pre-loading “on low-price alcohol drinks , minimising the chance of injury and violence during major sport events. The research study estimated the probable savings to the law and order department in UK to the extent of£3.6 million per annum, savings to NHS is likely to be at £5.3 million per annum and likely savings in reduced absenteeism from work is estimated at £ 500,000. However, activists protested against UK government move to shelve the strategies to impose a set of minimum price for alcohol and also its plan to bar multi-buy offers. A watchdog review carried over in the year 2008 exposed that six out of seven giant supermarkets in UK were offered alcohol less than cost price – an aggregate of 220.2 million litres per annum. Under the UK government’s new restriction on the use of alcohol, a floor price is fixed at the excise duty payable on the alcoholic products along with valued added tax (VAT). It connotes a 440ml can of beer with a strength of 5% cannot be marketed for lower than 50p, and a bottle of wine with 12.5% strength for not less than £ 2.41 and a 750ml bottle of vodka cannot be sold less than £ 10.16. However, there are exemption for duty free sales on aircraft, ships, airports, trains and ferry terminals and also there is exemption for beer with a strength of 1.2% or less. Thus, UK government recent initiatives on placing restriction on sale of liquors might be affecting the problem drinkers and however, there would be only a partial effect on responsible consumers who consume moderate quantum of alcohol. According to Home Office impact assessment, individual’s alcohol consumption is anticipated to fall by 0.04% in aggregate which the critics claim that it is comparatively small quantum. The supporters of UK government’s move are of the view that there is a risk that alcohol consumers in UK could either reduce or maintain their present levels of consumption to a greater magnitude than the available corroboration indicates. As per research study, individuals who consume huge quantity of cheap alcohol at home before going out which is known as pre-loading and these people are about 2.5 times more probable to involve in violence. The present UK coalition government is decided to contain alcohol-driven crimes which costs about £ 11 billion per annum to UK. Thus, UK government is attempting to stop harmful and cheap drink by banning the sale of alcohol below duty plus VAT. Further ¸the present UK Coalition government has delegated the authority to local governments to ban the sale of alcohol in the early morning hours and also to make sure that those who derive income from a late night licence should pay for the costs of policing in the late nights. Critics argue that UK government’s initiative would have a direct effect of just 1% of alcohol products marketed through supermarkets and shops thereby not touching the majority of those alcohol drinks that are so manifestly targeted young people. Critics have further argued that UK government is implementing fruitless policies while the international experience demonstrates that minimum unit pricing is what we require to not only to reduce crimes but also to save precious lives (PA/AOL Money 2014). Wine and Spirit Trade Association (WSTA) opposed the UK government decision to introduce a policy of minimum unit pricing both in practice and in principle. There is no corroboration to demonstrate that it will resolve alcohol misuse and yet it will increase the prices for consumers who do not have an issue with alcohol. The poorest 30% of the households in UK will be affected by the 40p minimum unit price. It is also incompatibility with the operation of the free market for the government to interrupt on alcohol price. Thus, it is alleged that minimum pricing could hence symbolise a barricade to free trade and can be declared as illegal under EU law. (HC Health Committee 2012:19). As per Alcohol Health Alliance (AHA), as per research study carried out in Canada which indicates that a 10% increase in the price of alcohol drinks resulted in 33% reduction in alcohol related deaths. Further, it also noted that death rate due to liver disease caused to binge drinking increased to 65% over the last two decades. Local pubs in UK also welcomed the UK government move on MUP stating that MUP will assist local pubs that are being affected due to cost below price drinks offered by the supermarkets (Royal College of Physicians 2013). Binge Drinking in UK As per Brainjuicer Labs, binge drinking is costing about £ 2.7 billion per annum presently which is expected to increase to £ 3.7 billion by 2015 and up to £ 55 billion per annum for the whole UK economy if one include crime and road accidents expenditures. Binge drinking is often related to drinking with an aim of becoming intoxicated and occasionally, with drinking in large groups. It is occasionally connected with social and physical harm. Drunkenness due to single , heavy drinking incidents has been demonstrated to have a number of social and health outcomes on the drinker or on the other individuals ,like: Sustaining body injuries mainly from falls. Aggression and violence, including alcohol-associated disorder and crime and domestic violence increase due to drunkenness and with over-all heavier drinking. If the binge drinking is practiced by parent, this can result in a variety of childhood behavioural and mental disabilities. In about 16% child abuse cases, alcohol has been found to be contributory factor. Enhanced risk of heart arrhythmias, stroke, and unexpectedly death due to coronary issues, even in individuals with no corroboration of earlier history of heart-ailments. Binge drink may result in harming of marriage or home life. Binge drinking may result in restricting the young adolescents’ educational attainments (Healey 2011:10). As per London Health Improvement Board, it has been observed that there has been increased long-run risk for high blood pressure, heart diseases, metabolic disorders and type 2 diabetes, due to heavy binge drinking by young adults and adolescents. A UK research study found that binge drinking in the young days was linked with enhanced peril of social, health, economic, educational and economic adversity which is likely to continue to later adult life. The issues included enhanced risk of alcohol dependency and harmful drinking in adulthood, poorer educational results, illicit drug use, lower socioeconomic status and criminal convictions (Healey 2011:10). Opposition to Minimum price for Alcohol The minimum price policy for alcohol was opposed heavily by the supermarkets and by the alcohol industry whereas the Campaign for Real Ale was supported the policy. According to the office of Fair Trading, it is so significant to differentiate between the present proposals for a statutory minimum price one-sidedly enforced by the UK government and the substitute of a voluntary agreement between retailers to consent on prices. Thus, a voluntary agreement on price would no doubt definitely violate the European competition law and the Competition Act 1998. As per Alcohol Concern, corroboration highlights that spurt in alcohol prices are associated to decrease in health injuries pertaining to alcohol consumption. However, there are other factors also like social, cultural and situational factors which are likely to influence the alcohol consumption. There may be restraints on minimum pricing law emanating from broader European law. For instance, the minimum pricing law may result in issues of harmony with European free movement rules. The OFT was of the view as the enforcement takes place at the European level, it does not have jurisdiction over these provinces of law (Woodhouse & Ward 2014:6). The Scotch Whisky Association (SWA) initiated legal action in the UK and in Europe against the minimum unit pricing (MUP) legislation introduced by Scottish government. SWA also made complaint to the European Commission and also initiated legal action through the Scottish courts. In its opposition efforts, SWA was also joined by European Union and other UK beer, wine and spirits manufacturers and companies. The allegations against MUP by the SWA were that it would be not effective in tackling alcohol misuse; it would place more pressure on household budgets and is likely to penalise the responsible drinkers; it would unleash harm to the Scotch whisky industry and is also illegal initiative perused by UK and Scottish governments. SWA argued that the minimum pricing policy of the Scottish Government’s is misguided and it argued that Scottish Government own modelling demonstrated that MUP will not minimise the figures of hazardous drinkers and instead, it will compel the responsible drinkers to pay high. The allegation by SWA in the EU against MUP focussed that MUP infringed the EU trade rules as the minimum pricing of alcohol would unnaturally distort EU trade in alcoholic drinks market which is contrary to the EU law. The SWA main concern is that the other nations also would follow the tunes of UK and Scottish government’s MUP policy and will peruse “safeguard of health” rationale to focus imported products. Such imitation policy measures will likely to cost the Scotch whisky industry about £500 mn exports revenues. Such policy would definitely like to cause injury to Scottish Government’s own ambitious policy of export-footed economic recovery as Scotch whisky is crucial to the Scottish economy as whisky exports accounted for about 80% of Scotland’s food and drink exports. SWA also applied for a judicial review in the Scottish Court of Session of the Scotland’s MUB legislation on the footing that the law on minimum pricing is in violation of the UKs EU Treaty commitment and also in violation of the conditions of the Scotland Act 1998. On 3 May 2014, the Scottish court rejected the SWA’s petition. It was held by the Scottish court that the MUB 2012 Act was not outside the legislative capability of the Scottish Parliament and that the MUB was within the authority of the Scottish Ministers. Scottish court also held that MUB initiative was not dissenting with the EU law. On appeal by SA, in April 2014, the Scottish Court of Session held that the case should be sent to EUs Court of Justice for its reference. (Scotchwhiskyorguk 2012). Ban on below cost sales of Alcohol In several EU Member States like Spain, France, Poland, Belgium and Italy, there is already in existence a ban of sales of alcoholic beverages less than its cost. By barring the sale of alcohol drinks at a price lesser than a specific threshold, the policy intends to forbid predatory (anti-competitive) pricing, thus, safeguarding small producers and retailers from the market power of large retailers like supermarket chains and thus facilitating new entrants into the market (Priscilla 2010:19). In a Competition Commission enquiry held in 2007, ten grocery retailers including Big Four supermarkets in UK acknowledged that they involved in below-cost sales in the UK and that it symbolised ,by sales value , about 3% of each retailers aggregate revenue.(Peter 2008:94). Supermarkets in UK cite the reasons for selling below cost as the way of employing temporary sales promotions as a guise of attracting clients into the supermarket and enhancing its aggregate sales, a practice which is known as “loss leading.” Tesco accredited this to major seasonal periods – normally lasting anything 8 to 25 weeks – which represented the start of acute competition among retailers in UK for the sale of alcoholic drinks. The two chief product groups in which some products are marketed below cost across all ten grocery retailers in UK by sales value are alcohol and dry groceries. This corroboration added more concrete proof to the research findings of Chevalier et al, of a “loss-leader” example of rivality in the off-trade, which is found to offer advantages to retailers since shoppers buy more of other articles for which the offer price has not been amended (Ias.org.uk 2014). Impact of MUP As per Sheffield University research study (2014), introduction of minimum price for alcohol by UK government would likely to result in 29,900 fewer hospital admissions, and 850 fewer deaths per year among heavy liquor consumers while having only a small impact on moderate drinkers. The study points out that due to minimum pricing, manufacturing stronger drinks will be costly now, through a price of 45p per unit of alcohol and this would definitely impact those who used to drink heavily and those who are coming under the low income groups. Due to high pricing of alcohol drinks in UK, alcohol addicts will minimise their consumption thereby attaining much health benefits. As per new modelling study carried over by Lancet medical journal , the heavy drinkers who are at high risk of accidents and worsening health conditions would be most impacted by a 45p minimum price. Heavy drinkers will have huge quantum of low-cost alcohol, while moderate drinkers will not prefer cheap liquor and they will go for a luxurious product with a higher price label. The impact would be high among the five percent of the drinking population who are labelled as harmful drinkers. Thus, under this category, those male drinkers who consume in excess of 50 units a week and those women drinkers who consume in excess of 35 units are labelled as harmful drinkers. The worst affected category would be harmful drinkers who are hailing from low income group. These harmful drinkers on an aggregate likely to spend around £2,700 per annum on alcohol , 40% of which is likely to cost less than 45p a unit. The above model estimates that high price of alcohol will bring down about 300 units per annum. As per the above study finds that the aggregate of minimum unit price policy on moderate drinkers would be very negligent despite of their income level. MUP will impact badly the harmful drinkers as it is the harmful drinkers in the low income group would be consuming liquor in spite of the increase in price or not. Thus, the policy makers is required to balance higher reductions in consumption by harmful drinkers on a low income as against the large health related benefits that could be witnessed in this cluster from reduction in alcohol-associated death or illness. Sheffield Alcohol Research Group study found that there exist no corroboration to support the concerns buttressed by the alcohol industry and the government that minimum unit pricing would punish responsible drinkers who are on low incomes . Hence, the minimum unit pricing is a strategy that is aimed at those who drink huge quantities of cheap alcohol. By poignantly minimising rates of premature deaths and ill health in this group, it is probable to contribute to the decrease in health disparities. (Boseley 2014). Findings and Conclusion As per Alcohol Health Alliance (AHA), as per research study carried out in Canada which indicates that a 10% increase in the price of alcohol drinks resulted in 33% reduction in alcohol related deaths .UK government recent initiatives on placing restriction on sale of liquors might be affecting the problem drinkers and however, there would be only a partial effect on responsible consumers who consume moderate quantum of alcohol. According to Home Office impact assessment, individual’s alcohol consumption is anticipated to fall by 0.04% in aggregate which the critics claim that it is comparatively small quantum. The present UK coalition government is decided to contain alcohol-driven crimes which costs about £ 11 billion per annum to UK. Critics argue that UK government’s initiative would have a direct effect of just 1% of alcohol products marketed through supermarkets and shops. It is argued that MUP will not only reduce crimes but also to save precious live. However, critics argue that MUP will impact the poorest 30% of the households in UK who will be affected by the 40p minimum unit price. Critics argue that MUB will symbolise a barricade to free trade and can be declared as illegal under EU law. Supporters argue that MUP will assist local pubs that are being affected due to cost below price drinks offered by the supermarkets. The allegations against MUP by the SWA were that it would be not effective in tackling alcohol misuse; it would place more pressure on household budgets and is likely to penalise the responsible drinkers. SWA also alleged that MUP infringed the EU trade rules as the minimum pricing of alcohol would unnaturally distort EU trade in alcoholic drinks market which is contrary to the EU law. This research essay is concurring with findings of Priscilla that the policy intends to forbid predatory (anti-competitive) pricing, thus, safeguarding small producers and retailers from the market power of large retailers like supermarket chains and thus facilitating new entrants into the market. List of References Alcohol concern. (2012). Briefing Paper – the Government Alcohol Strategy. [online] available from [accessed 4 June 2014]. Boseley, S. (2014). Minimum alcohol pricing would save 860 lives a year, study finds. [online] available from http://www.theguardian.com/society/2014/feb/10/minimum-alcohol-pricing-save-860-lives-study[accessed 4 June 2014]. Deluca, P. (2010). Survey Finds only 15% of emergency departments have formal intervention and treatment for trauma patients. Evidence Based Nursing, V 3 (4). HC Health Committee. (2012). Government’s Alcohol Strategy. [online] available from http://www.publications.parliament.uk/pa/cm201213/cmselect/cmhealth/132/132.pdf > [accessed 4 June 2014]. Healey, S (2011). Alcohol and Binge Drinking. New York: Spinney Press. Ias.org.uk. (2014). Ban on Below Cost Sales. [online] available from http://www.ias.org.uk/Alcohol-knowledge-centre/Price/Factsheets/Ban-on-below-cost-sales.aspx#_edn3 > [accessed 4 June 2014]. PA/AOL Money. (4 Feb 2014). Government Announces Ban on Cheap Alcohol. [online] available from < http://money.aol.co.uk/2014/02/04/government-announces-ban-on-cheap-alcohol/> [accessed 3 June 2014]. Peter, F et al., (2008). The Supply of groceries in the UK market investigation. Competition Commission, p.94. Priscilla H, Lila R, Ben B. (2010). ‘Preliminary analysis of the economic impacts of alcohol pricing policy in UK. RAND Europe p.19. Royal College of Physicians. (2013). Health bodies say government must stand firm on minimum unit pricing. [online] available from [accessed 3 June 2014] Scotchwhiskyorguk. (2012). Scotch whisky Industry Challenges Minimum Pricing of Alcohol. [online] available from http://www.scotch-whisky.org.uk/news-publications/news/scotch-whisky-industry-challenges-minimum-pricing-of-alcohol/#.U44KZLGi9io > [accessed 3 June 2014] Woodhouse J & Ward P. (2014). Alcohol: Minimum Pricing. London: TSO. Read More