Minimum Unit Pricing

Alcohol has gradually become more affordable since 1987. This has been most eminent in off-trade premises (supermarkets and off-licenses), where the affordability of beer has increased 188%. British drinking culture is changing, with a rising number of people drinking at home rather than in on-trade premises (pubs, clubs, and restaurants). The devolved administrations have taken different policy approaches to influence alcohol consumption and help to bring about a more benign drinking culture.

The Licensing Act of 2003 abolished set licensing hours in England and Wales. This liberalisation aimed to reduce the problems of drinking and disorder associated with a standard closing time. The evidence suggests that this legislation has had little effect in changing behaviour. Cameron’s ‘Alcohol Strategy’ committed to a 40 pence minimum unit price, back in 2012, suggesting it would reduce binge drinking without having an affect on pubs. This proposal was abandoned in favour of a ban on selling alcohol below cost duty plus VAT. Modelling suggests this reduced consumption by less than 0.1%, while a 45 pence minimum unit price would have had a 40 – 50 times greater impact.

In 2018, Scotland’s devolved administration introduced a 50 pence minimum unit price on alcohol. Minimum Unit Pricing (MUP) involves setting a minimum price below which it is illegal to sell a unit of alcohol – you can no longer sell a unit of alcohol for less than 50 pence in Scotland. This piece will consider the impact of this strategy in Scotland and the lessons for its implementation in England. It recommends that England introduces a 50 pence minimum unit price to close the affordability gap between on- and off-trade drinks, incentivising people to consume a larger proportion of alcohol in licensed venues rather than at home.

Minimum Unit Pricing in Scotland

Scotland is the first country in the world to implement MUP. Public Health Scotland commissioned a thorough evaluation of the policy with four key outcome areas: implementation and compliance, the alcohol drinks industry, consumption, health and social harms.

Implementation of MUP was ‘straightforward’ having ‘little or no adverse effects on small retail business’. Some actually felt MUP improved profit margins and competitiveness with supermarkets. There were high levels of compliance from both small and large retailers and no increase in illegal ‘alcohol-related activity’ within the first year. Public support for the policy increased 8.5% over implementation (2015 – 2019).

MUP is having a small effect on retailer revenues, with increased margins on some drinks compensating for decreased volume sales. It had a negative but small impact on producer revenues; however, no retailers or producers reported closing local units, cutting staff, or reducing investment because of MUP.

On-trade premises were largely unaffected by MUP, with most drinks already priced above the 50 pence rate. Over the first year of implementation, the proportion of off-trade drinks priced between 50 and 64 pence per unit more than doubled from 31.9% to 65.3%, while drinks priced above 65 pence per unit increased in line with recent years. Off-trade alcohol sales fell by 3.6% compared with a 3.2% increase in England and Wales. These reductions were greatest for cider (-19%) and spirits (-4%); both cider (+8%) and spirits (+6%) increased over the same period in England and Wales.

Although MUP has reduced volume sales, it is not yet clear whether this is reducing alcohol health harms. There have been some positive signs, with hospital admissions for liver disease decreasing since implementation. Yet evidence is inconclusive and further research is needed to determine MUP’s wider impact on public health.

There is strong evidence that increasing drink prices decreases crime rates. A recent study found that MUP is having a statistically insignificant impact on alcohol-related crime in Scotland, however, which was already on the decline prior. These data have been challenged for relying on police recorded crime data that are a notoriously inaccurate measurement.

An interim qualitative study into the impact of MUP on alcohol-dependent drinkers found it reduced the proportion of respondents purchasing drinks below 50 pence per unit over implementation, from 59% (6 months prior) to 16.9% (18 – 22 months after). Respondents felt there was a lack of support to help them adjust to MUP before implementation, and many were still not aware of any such services after.

The impact on young people is also dubious. Qualitative data suggests that MUP is having a limited impact on drinking patterns and did little to reduce harms or change the price or availability of favoured drinks. Though this study engages with a narrow sample of young people, most of whom were already drinkers, and does not provide a statistically significant sample.

Drinking Culture & The Decline of Pubs

British drinking culture is changing. The number of British pubs declined by 12,450 (20%) between 2000 – 2017. There has been an increase in the number of people drinking at home rather than licensed premises, since 2000, and an increase in ‘pre-loading’ (drinking at home before going to a venue). Both of these trends have been exacerbated by the pandemic. The number of drink- and food-led pubs fell 5.9% and 9.2% respectively over lockdown and a large proportion of pubs are now managed, branded, or franchised. More people are making cocktails at home; a survey of 6000 people by the Craft Gin Club found 75% of respondents ‘always’ or ‘mostly’ prefer drinking at home rather than in a pub or bar.

This changing drinking culture poses new challenges for policymakers. Drinking at home rather than a licensed premises has been associated with an increased possibility of fighting, drinking to excess, injuring oneself or becoming ill. Moreover, interventions are more difficult when problem drinking is occurring at home rather than in a licensed premise. Pubs provide a social atmosphere where alcohol consumption can be monitored and regulated: drinks stop being served at a point, security is present, and staff can refuse to serve people who are too drunk.

Pubs offer a range of personal and social benefits. Research by the University of Oxford suggests that those who visit a local pub regularly are more socially engaged, content with their lives, and likely to trust others in their community. Pubs strengthen communities by providing jobs to locals, hosting social events, and offering a safe space to socialise. This is particularly true of community-owned pubs, which generate social capital by foster social interaction and civic engagement.

The Institute for Public Policy Research recommends MUP as a way of encouraging people into pubs by increasing off-trade prices. Publicans agree with policymakers on the need to change British drinking culture. A survey of publicans found that: 44% believed the UK has an unhealthy relationship with alcohol, 44% considered off-trade competition as the biggest threat to their pub’s success, and 41% were in favour of MUP compared with 22% against.

Lessons for England

Policy should aim to change drinking patterns by making ‘pre-loading’ and ‘binge drinking’ more expensive, nudging people to drink less at home and spend more in pubs, clubs, and restaurants. The literature suggests that effective and cost-effective strategies for changing drinking behaviour focus on restricting the affordability, and that educating people about alcohol’s harms alone does not produce substantial long-term behavioural changes. Although some argue MUP is regressive (a tax on the poor), modelling suggests that it has the biggest impact on harmful (not moderate) drinkers regardless of their poverty status.

There is overwhelming evidence from Scotland that MUP effectively closes the affordability gap by increasing the price and reducing the sales of high-strength cheap off-trade drinks, without affecting the on-trade. Evidence is inconclusive but suggests that 50 pence MUP is not effectively reducing crime rates or changing drinking behaviour amongst dependent and young drinkers in Scotland. There have been calls to increase the 50 pence rate, which was agreed in 2012, because of the limited impact MUP is having on crime in Scotland. This might have unintended consequences, such as increasing on-trade prices or drug-related crime, however, and further data are needed to justify this increase.

England should implement MUP as part of a strategy to close the affordability gap between off- and on-trade drinks. It must go alongside provisions that support dependent drinkers struggling to adjust to price changes – this has been identified as a problem in Scotland. MUP should be set at a rate of 50 pence in England and include an evaluation with studies that examine its effectiveness at mitigating the harms associated with home drinking and stimulating the British pub industry. It should also include a study providing cost-benefit analysis into increasing the 50 pence rate, which considers how this would impact dependent and young drinkers, on- and off-trade prices, the hospitality industry, and proportion of alcohol consumed at home compared with licensed premises.