John Shearer, SLTA President, discusses MUP in his new column for Trade Talk
MINIMUM Unit Pricing (MUP) is a significant move by the Scottish Government in the sale of Alcohol. The SLTA supported MUP on the basis that the industry had got out of line with licensing and the sale of alcohol.
Supermarkets have used alcohol sales as loss leaders which has resulted in a complete change in the basis of sales. Pubs, clubs, hotels and corner shop retailers used to make up 70% of sales – this has flipped on its side and now supermarkets make up 70%-plus of alcohol sales.
Scottish Government statistics show alcohol-related problems now cost the economy approximately £2 billion.
The introduction of MUP should stop the loss leading by supermarkets. In fact, this has now moved to meat products.
I think the Scottish Government can go further in helping the on-trade get much of its business back. Pubs, clubs and hotels are making huge strides in training and other initiatives to create a safe and social environment for the sale of alcohol.
This can be further enhanced by government support in making the on-trade more productive by reducing taxes and duty. A good place to start might be matching VAT on accommodation and food at 9%, as is the case in Ireland.
The government has lost control of alcohol sales and giving the on-trade and small retailer more incentives will go some way to retaking control. The trade would also argue that it is not just about the price but about the price relative to wages and income.
But we should throw in a note of caution. Our export markets of products such as whisky are very important and it is imperative we do not affect international competitiveness of these products.
MUP is one tool to control sales of alcohol but the Scottish Government must also look to support an industry which provides a huge number of jobs and GDP.
Prohibition does not work, we only have to look at Chicago in the 1930s!
The SLTA is looking to support the approximately 19,000 personal licence holders due to extend or renew their licences in 2019.
We support MUP and charities such as Alcohol Focus Scotland but we also want to see a vibrant industry become stronger in the 21st century.
Introducing MUP was a brave move by the Scottish Government and I’m pretty sure England will not be far behind.