UK: Minimum pricing will decimate Whyte & Mackay - CEO
The CEO of Whyte & Mackay has warned that the Scotch whisky group may "cease to exist" if Scotland's Government pushes ahead with plans to introduce a minimum price on alcoholic drinks.
If a minimum price of GBP0.50 (US$0.76) per alcoholic unit were introduced, Whyte & Mackay has calculated that it would be forced to cut 300 jobs from its 480-strong workforce, group CEO John Beard has warned.
Minimum pricing will "decimate" the own label Scotch whisky market, to which Whyte & Mackay is the leading supplier in the UK, Beard told the Scottish Parliament's Health Committee this week.
"Whyte & Mackay, a company established in 1844, would essentially cease to exist in anything but name only," he said, adding that the firm's Grangemouth bottling plant would almost certainly be forced to close.
The ruling Scottish National Party (SNP) remains committed to introducing a minimum price on drinks to combat alcohol misuse in the country, but it has so far failed to gain political support for the move.
SNP documents have referenced a minimum price of between GBP0.40 and GBP0.50 per unit.
Whyte & Mackay, which is owned by Indian spirits giant United Spirits, said that a GBP0.50 per unit base price would see the price of own label whiskies rise by 37.5% to GBP14 in retailers.
"At that level, quality own label loses its competitive advantage and would be competing in the same price range as premium brands such as Famous Grouse and Bell’s Whisky," said Beard.
"We have had it on good authority that supermarkets would likely delist own label products if the competitive advantage was lost and demand shifted to premium whisky," he said.
Beard said that Whyte & Mackay, which also owns the Dalmore single malt brand, shares concern at "unacceptably high levels of alcohol abuse in Scotland".
But, he told the Health Committee: "Minimum pricing would penalise the majority of consumers who drink alcohol responsibly, and will have little or no impact on the minority who have alcohol dependency issues."
He also warned of further "unintended consequences" of the policy, particularly the development of "organised black market businesses".
The Scotch Whisky Association has repeatedly argued that minimum pricing would be illegal under European Union law.
The Scottish arm of the UK competition watchdog, the Office of Fair Trading, has also briefed the Government that it opposes minimum pricing, industry sources told just-drinks late last year.
Opposition parties to the SNP remain opposed to a base price.
However, drinks industry insiders believe that some kind of action on pricing looks increasingly likely in both Scotland and in the UK more broadly. Action against below-cost selling by retailers is one alternative under consideration by the main political parties.
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