So the Scotch Whisky Association’s challenge to minimum pricing has failed and the last good reason to stay in the EU has disappeared. For the people of Scotland, the court case had become almost an academic exercise. With Brexit on the horizon, minimum pricing had become inevitable one way or the other. The SNP’s victory today means that their pet policy will, perhaps, be introduced a few months before March 2019 instead of a few months after it.
And then we will finally have an opportunity to see whether it works. No longer will we have to rely on silly computer models and junk science from Canada. Economists will be particularly interested in seeing what happens to the bottom of the market. The UK’s lopsided alcohol duty system currently favours beer and cider over wine and spirits. A unit of alcohol in strong cider is taxed at 7p while a unit of alcohol in a bottle of vodka is taxed at 28p. This is why street drinkers tend to consume strong beer and cider.
Advocates of minimum pricing might hope that their policy will put an end to alcoholism and street drinking, but the reality-based community knows that isn’t going to happen. The question is what will the heaviest drinkers turn to? With every unit of alcohol costing the same amount at the bottom end of the market, I suspect that Scotland will see a big fall in the sale of strong beer and cider, to be replaced with spirits, illicit alcohol and – for the very poorest alcoholics – methylated spirits. Others may turn to drugs such as Spice, the formerly legal high that is currently ravaging the homeless community.
It is not obvious that any of this will improve people’s health, nor is there any obvious mechanism by which the recovery of alcoholics is made easier by making them poorer. I was on the radio this morning with a gentleman from the Kenward Trust, a fine charity that helps people with substance abuse problems. Like me, he was sceptical about any approach that targets the product rather than the person, but he was hopeful that some of the money raised by minimum pricing would go to organisations like his. I had to break it to him that there will be no revenue. Minimum pricing is not a tax. It does not involve a transfer of wealth. It merely makes products needlessly expensive.
For the people of Scotland (and Wales), minimum pricing offers nothing but a higher cost of living. It is a myth that the policy will only affect the very cheapest drinks. In reality, a 50p unit price will raise the cost of most of the beer, cider and spirits sold in the off trade and will raise the price of about a third of the wine. The only categories of alcohol that will be totally unaffected are alopops and sparkling wine. Doctors and the MPs can rest assured that the price of champagne at their Christmas parties will not be going up.
Some people say that minimum pricing is a policy that clobbers the poor, and so it is, but it will also clobber those on average incomes. It would be more accurate to say that minimum pricing is a policy that exempts the rich. For that reason, we should raise a glass to the Scotch Whisky Association today. Their legal action was justified and had a good chance of success (minimum pricing for other products had previously been ruled illegal by the EU courts), but even in defeat they have delayed the implementation of this pernicious policy by five years, thereby saving Scottish drinkers hundreds of millions of pounds.