Blog: Cost plus duty? Hear, hear. Or, Yes! Yes! Yes!
Olly Wehring | 19 January 2011
The news yesterday (18 January) that the UK Government is to ban alcohol sales below the sum of cost price plus duty has split the drinks industry, prompted a sea of calls to radio stations and given TV reporters ammunition to hit the streets and ask members of the public what they think of the matter - like they need a reason.
The naysayers claim this will do nothing to alcohol prices as they currently stand in the UK, with binge drinking also widely expected to carry on regardless.
Meanwhile, the majority of our industry - by which I mean drinks producers - has welcomed the move (while the on-trade will see the gap between their alcoholic drinks prices and those in the off-trade stay as wide as ever: BUT, THAT'S NOT THE POINT), with some of these fans of the news meekly suggesting that introducing pricing controls is no substitute for education in the perils of excessive drinking.
Of course, drinks producers will applaud this move; for two simple reasons. Firstly, as I've said, it will change next to nothing when it comes to prices – have you found a litre of vodka for less than GBP10.71 (US$17.11)? Secondly, this looks like at least something is being done about a problem.
Suggesting that a higher minimum price limit would have been a wiser move does not take into account that this could provoke the European courts, who would look seriously at this as a contravention of competition guidelines. Besides, as several senior members of trade organisations in the UK have told me, there's nowhere near enough solid evidence linking cheap alcohol with binge drinking.
The Government's move is a win-win for our industry. Whilst it may be a stop-gap, and a medium-term one at that, I imagine many will nod sagely, breathe a sigh of relief and wink quietly to their colleagues.
This weekend sees yet another “International Day” for a drinks category. Lucky us. Anyway, ahead of Sunday’s International Cachaça Day, here’s a wealth of information on Brazil’s national spirit, cour...
In yet one more sign that The Coca-Cola Co is losing its lustre, the soft drinks maker has, for the first time, fallen out of the top ten of a 'world's biggest brands' ranking....
What a week for stats! Yesterday, the Beverage Marketing Corporation released figures to show the bottled water market had more than doubled over the past 15 years in the US....
The Euro 2016 football tournament is almost upon us....
- The post-Brexit winners and losers - Analysis
- What Brexit means for drinks industry? - Analysis
- What does Brexit mean for AB InBev's SAB deal?
- Why has Heineken made a Formula 1 U-turn?
- Interview - Seedlip founder, Ben Branson
- Carlsberg to close UK distribution arm
- Pernod Ricard exec shuffle - Denis O'Flynn leaves
- Major spirits M&A remains out of sight - analyst
- C&C Group will be a Brexit victim - analyst
- Pernod Ricard to shut down Morris Winery
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Global RTD insights - market forecasts, product innovation and consumer trends
- Spirits and Wine: Corporate Overview