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OFT warns UK minimum pricing could backfire
The UK’s competition watchdog, the Office of Fair Trading, has warned the government that plans for a minimum price for alcohol could backfire badly.
The Office of Fair Trading believes a minimum unit price could encourage retailers to sell more, rather than less, alcohol. In written evidence to the Health Select Committee, the OFT says that because retailers would keep the extra revenue from minimum priced drinks, there’s an incentive to promote their cheapest brands more heavily.
“At worst”, said the OFT, “such an incentive could dull the effectiveness of the minimum price in reducing alcohol sales.”
The OFT suggests that changes in the way alcohol is taxed would be more effective than a minimum pricing regime in achieving the UK government’s aims of reducing alcohol abuse.
The Scottish government is already close to imposing a 50p minimum price per unit, but faces an ongoing legal challenge from the Scotch Whisky Association over the policy.
[The full text of the OFT’s submission to the Health Committee can be read HERE.]