Drinks firms break rank on minimum pricing

Drinks firms break rank on minimum pricing

The drinks industry is showing signs of division on minimum pricing after the head of Tennent's lager, Scotland's biggest selling lager brand, publicly backed the policy to curb alcohol misuse.

Mike Lees, managing director of Tennent Caledonian Breweries, said that minimum pricing "could be part of the solution" to problem drinking in Scotland and "may contribute to an improvement in society".

His comments were published today (25 January) by the ruling Scottish National Party (SNP), which is pushing for opposition politicians to support its plan to set a base price per alcohol unit on drinks.

Excess drinking costs Scotland between GBP2.5bn (US$4bn) and GBP4.7bn annually, the SNP has said.

Lees' view goes against lobbying efforts by all drinks trade bodies in the UK, including the British Beer & Pub Association and Wine & Spirit Trade Association, which have strongly criticised minimum pricing plans. They argue that the policy will not target the minority of drinkers misusing alcohol.

Lees said: "We recognise that there is an issue of over-consumption of alcohol among a minority of consumers.

"We believe that, if implemented appropriately, minimum pricing could be part of the solution by increasing the price of alcohol, particularly of high strength products and is one way of addressing the alcohol abuse issues that we face in Scotland."

It was not immediately clear whether Tennent's new parent firm, Ireland-based C&C Group, agrees with Lees' stance. His comments, however, point to a split on minimum pricing within the drinks industry, particularly among brewers.

Molson Coors UK, which brews Carling lager, went public last July to back minimum pricing "in principle". Molson already works under minimum pricing systems in its native Canada.

Group marketing head Simon Davies told the House of Commons Health Select Committee: "In principle, Molson Coors would support further investigation of minimum pricing; we believe that it may form part of a solution."

just-drinks understands from sources that some other leading companies in the UK drinks sector, including at least one other major brewer, would also be willing to accept a base price on alcohol.

However, other companies, including Diageo and SABMiller, have backed trade bodies in their opposition to the policy.

Calls for minimum pricing across the UK have so far gone unheeded by the Government and have been rejected by the main opposition party. However, Scotland has devolved power to set its own policy and it is thought that authorities will take some action on pricing, potentially on below cost alcohol in retailers.

One senior drinks industry source today accused those in the industry who support minimum pricing of using "the veneer of care for the nation's health" to push a "commercial agenda".

"This support is driven by commercial reasons," the source told just-drinks. "What they need to remember is that no one has ever talked about minimum pricing without talking about tax." Minimum pricing would include higher tax on products, the source added.