UK: Minimum pricing could cost Scotch whisky GBP600m
A minimum price on alcoholic drinks in Scotland could cost the Scotch whisky industry up to GBP600m (US$937m), with authorities in key export markets likely to follow Scotland's lead, the Scotch Whisky Association (SWA) has warned.
During a hearing at the Scottish Parliament's Finance Committee yesterday (10 February), SWA's CEO Gavin Hewitt warned of the knock-on effects of minimum pricing in Scotland.
Authorities in export markets will be more inclined to maintain high tariffs on Scotch if Scotland's Government presses ahead with its minimum pricing plan, said Hewitt.
"I have personal experience of people coming to watch what is happening in Scotland and asking, "Why should we reduce the price, which is protected by protectionist measures, when your Government is increasing the price?," he said. "I use India as an example."
"Taking those two elements together - current practice and what our share of the market is in our major markets, as well as the potential that exists in other markets - we believe that we could lose as much as GBP600m, which is about 20% of our exports."
Scotland's ruling National Party still hopes to introduce a minimum price per unit of alcohol - around GBP0.40 ($0.625) per unit - to help tackle alcohol misuse in the country.
The minority Government has so far failed to gain support from other major political parties, however.
The SWA has maintained that minimum pricing will only harm the majority of responsible drinkers and would, in any case, be illegal under EU law.
If a GBP0.40 base price is introduced, around a third of Scotch currently sold in Scotland, would fall below the threshold of GBP11.20 per bottle.
Meddling with the price of alcohol is going to be tricky for a Government that instinctively recoils from policies which might jeopardise free market competition....
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