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.
Would the thought of working in a morgue stop you from drink driving? ...
You would be forgiven for thinking that the US cider boom is over. Sales growth of as much as 90% in the past few years has shrunk to double figures. ...
The drinks industry could do more to benefit from new technology. ...
The soft drinks world is abuzz today over what an executive shake-up at PepsiCo might mean to on-going speculation over CEO Indra Nooyi's successor....
- SABMiller in Cent'l & E Europe - What is for sale?
- A-B InBev and its SABMiller divestments - Focus
- Where does AB InBev see the future of beer?
- Brown-Forman's march on premium whisk(e)y -Comment
- Are consumers getting tired of consuming?
- Private equity poised for SABMiller Europe buy?
- AB InBev to sell SABMiller Cent'l, E Europe assets
- Leonardo DiCaprio joins Runa drinks board
- Remy Cointreau names new Travel Retail exec
- Pernod Ricard to widen Our/Vodka sales reach
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Carbonates in India
- What Next for Beer and Brewers Following the MegaBrew Deal?