Minimum pricing - the model for the future?

Ireland, Scotland, Wales, Canada and Russia all have some form of minimum prices for alcohol, and the UK is about to link excise duty to alcoholic strength. Is this a trend that others will follow?

Image: Scott Warman
Image: Scott Warman

The prices of some alcoholic drinks in Ireland have doubled since the introduction by the Irish government on January 4. "This measure aims to reduce serious illness and deaths from alcohol consumption and to reduce the burden of alcohol-related diseases on our health services," said Irish Health Minister Stephen Donnelly.

The minimum price is calculated from the amount of pure alcohol per drink. The decisive factor is 10 cents per gram of alcohol. Sample calculations therefore give the minimum price for a bottle of wine with 12.5% at €7.40 euros.  Irish consumers already pay €3.19 per standard 75cl bottle of wine with less than a strength of15%, the highest duty rate in the EU.

With the new legislation, Ireland may be the first nation in the EU to introduce the minimum price model – but it is not really as much of a pioneer as some might suppose.  As Donnelly pointed out, the regional government in Scotland brought in minimum prices in 2018 and Wales, another devolved part of the United Kingdom, followed its example in 2020. Canada and Russia have also made minimum prices part of their alcohol policies. 

The Scottish model works by making 10 milliliters or 8 grams of alcohol equal to one unit priced at £0.50 (€0.59).  According to the British National Health Service (NHS), a bottle of wine with 13.5% vol. contains 10 units of alcohol, so the minimum price is given as £5 the equivalent of just under six euros. In Scotland, too, health care was seen as the reason for the introduction of minimum prices.

The UK considered the model for its national taxation regime, but recently chose instead to opt for a controversial option that has a sliding scale in which duty rates increase with every 0.5% of extra alcohol content. This model which has been described as unworkable by many UK professionals, is still under discussion, but seems likely to be introduced in some form in February 2023.

The measure reduced alcohol consumption in Scotland by 8% and, according to a 2021 report nu National Records of Scotland, cut the number of alcohol-related deaths by 10%. A separate study, however, found an insignificant impact on crime.

The Anglo Saxon example has attracted interest elsewhere. In 2018, Marlene Mortler, the German government's drug commissioner” told the Funke media group that "We cannot sit back and wait, we must continue to look for suitable solutions for Germany together," detailing that insurance companies agreed that low prices and easy availability were a major problem.

No action was taken at the time, but it is possible that the Irish initiative and indeed the UK model will reignite the discussions in Germany and elsewhere.

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