Wednesday 25 April 2012

Minimum Pricing: Sheemed Like A {Hic} Good Idea At The Time

You have to wonder if UK politicians who have been promoting minimum alcohol pricing might have been a bit pissed when they made the decision to go for it.

Consider this response to a parliamentary question tabled by a UKIP member of the House of Lords.
Lord Willoughby de Broke (UKIP) To ask Her Majesty's Government what assessment they have made of whether their proposal for minimum pricing on alcohol is compliant with European Union law. 
Lord Henley (Parliamentary Under Secretary of State, Environment, Food and Rural Affairs; Conservative) The legal advice which the Government have received on this issue is subject to legal privilege. We do not, therefore, believe it appropriate to disclose this advice (or any summary of it). The Government are currently in discussion with the EU Commission on this issue.
You'd think, wouldn't you, that if a government was bold enough to announce such a courageous policy as minimum pricing, someone would have made absolutely sure that it was legal under EU rules.

Lord Henley's inability to disclose even the merest detail of the legal advice they have received suggests they might be having a few problems.

It's the same in Scotland where Nicola Sturgeon is similarly struggling.
[Labour’s Scottish health spokeswoman, Jackie Baillie, said:] “If [Nicola Sturgeon] is so confident, why does she not come clean and finally publish the legal advice, her proposed minimum price, and formally notify the EU?”
One thing is quite clear. The only answer to this apparent dithering lies in Brussels, as Cameron's advisers seem to understand quite clearly.
At a private meeting on March 26, three days after the Prime Minister set out his controversial alcohol strategy, industry sources said that Whitehall officials told representatives it was their understanding minimum unit pricing did raise legal concerns. 
The meeting had been planned prior to Mr Cameron's announcement to discuss more routine tax issues. But minimum unit pricing was raised among the opening remarks, with Treasury officials relaying their view that the policy could have difficulties under European law. 
The Treasury disputes that it said anything more than laying out some of the legal issues, although industry sources said it went further than that.
Oh, it goes a lot further than that. In an answer to Lib Dem MEP George in February, the situation was explained conclusively.

It seems that the EU are quite happy for member states to implement minimum pricing on alcohol, as long as it doesn't unfairly hinder trade from other EU countries. However, the competition law aspect insists on comprehensive impartiality. And that comes with some rather awkward conditions.
From a competition law perspective, the critical factor when it comes to a national measure setting minimum alcohol prices is that the alcohol industry should not be involved in the process in any way whatsoever, since this would render the measure contrary to Article 4, paragraph 3, TEU, in conjunction with Article 101 TFEU. The Court of Justice has held that national measures where a Member State requires, favours or reinforces an anti-competitive agreement or where it delegates to private operators the responsibility for taking decisions affecting the economic sphere will infringe said provisions.
Translated, this means that any legislation would have to be implemented without any company or individual in the alcohol manufacturing or retail industries even being allowed to take part in the consultation exercise. So much as a letter or a phone call would render the whole thing illegal and they'd have to start again from scratch.

North of the border, this puts the SNP in right sticky situation. How do they get their little baby through by wilfully ignoring whisky manufacturers who they regularly talk about in very proud terms, and whose products provide a massive boost to the Scottish economy?

Cameron has even worse problems. He would appear to have driven into a cul de sac from which he is going to find it extremely difficult to reverse. Y'see, he has doggedly defended his decision to include industry in proceedings. In fact, his 'responsibility deal' is a commitment inextricably written through his government public health agenda. It is, quite simply, a major plank of his government's modus operandum.

For minimum alcohol pricing to reach the statute book, every tie with anyone from the drinks industry will have to be cut. They would have to be blackballed at a stroke.

I can imagine some policy formers in the Tory party holding their sore heads and groaning "never again, Lord, I swear!", as the reality of their binge-meddling hits home. Either an embarrassing climb-down beckons or else they'll be picking a fight with major businesses which will never go away in our lifetime.

As if that wasn't funny enough, the fallout - should Cameron be stupid enough to dig his heels in - promises to be even more hilarious.

A minimum price for the off-trade is just the start, as the Sheffield University study which underwrites every single piece of anti-alcohol rhetoric states quite clearly.
Differential minimum pricing for on-trade and off-trade leads to more substantial reductions in consumption (30p off-trade together with an 80p on-trade minimum price -2.1% versus -0.6% for 30p only; 40p together with 100p -5.4% compared to -2.6% for 40p only). This is firstly because much of the consumption by younger and hazardous drinking groups (including those at increased risk of criminal offending due to high intake on a particular day) occurs in the on-trade. It is also because increasing prices of cheaper alcohol in the on-trade dampens down the behaviour switching effects when off-trade prices are increased.
Yes, you read that correctly. A minimum alcohol price for pubs.

And if the precedent has been set for the off-trade, and the medical community states - as it will - that such a move is essential to save lives according to the University of Sheffield, politicians will be faced with the prospect of being forced into implementing that too. What's more, they'd have to do so without engaging in discussion with pub-loving interests in any way whatsoever.

Can you imagine the horror on minimum price advocate CAMRA's faces if that were to materialise? Not to mention all those MPs who currently fall over themselves to defend pubs despite their policies having crushed them.

Stock up on popcorn boys and girls, this could turn out to be the best political laugh-fest since David Mellor shagging in a Chelsea shirt.


Jay said...

Random late night thought:  Any chance of the drinks industry instituting a "voluntary" minimum price in order to [foolishly] curry favour with gov't, thereby avoiding the legal issues and any possible drawn-out legal battles?  I know that sounds far-fetched, but then again, what isn't these days?  

Smoking Hot said...

Has a 20 year wait for a new PiL album mellowed John Lydon? What do you think? Yep, the biggest gob in music is back, and he’s just as pissed off and antagonistic as ever. On the government: “Two cunts for the price of one” (NME)

Dick_Puddlecote said...

You forgot the link. 

Interestingly, the vid froze halfway on the first watch so I reloaded. The first preceding ad was for Jack Daniels with a thumping soundtrack, the second for Cobra beer ... with a thumping soundtrack.

Advertising to the youth element one might say. They'll be on it soon, no doubt. Plain packaging of booze for the children? More inevitability than pipe dream now. 

Smoking Hot said...

Indeed l did :)

…Zaph said...

A minimum alcohol price for pubs, you say?

Oh man. I hope, with all my heart and soul, that they try to get that passed. I've always lived in hope that one day the government would go too far with the nannying* and that may be the point where it all falls down about their self-righteous ears. (Oi! Cameron! NO!!!)

*personally, I feel they reached that point years ago, and I'm sure you'd agree. 

Curmudgeon said...

Nah, that's illegal on two levels - colluding on price-fixing, and manufacturers seeking to control the retail price of their products.

On the wider issue, looks like I'll have to stock up on popcorn, Dick :-)

Jay said...

Yes, perhaps it would be.  Still, if you're voluntarily colluding with government, then you get a pass.  It will passed off as a responsible health initiative, you see... like voluntary age ratings on video games, before that became mandatory.  It's all the same to me...

theprog said...

Alcohol was always the prime target of the puritans and reducing pub numbers has to part of the denormalisation agenda. Clearly, the smoking ban was a precursor. 

Carpe Zytha said...

That#s the bit that will wind the beards up "differential minimum pricing". Can't say they have not asked for it.

Curmudgeon said...

I have warned them. But will they listen?

Jeffsmith92 said...

80 p a unit, that's only about £1.60 a pint, half the average now. What's the problem?

JonathanBagley said...

"It is also because increasing prices of cheaper alcohol in the on-trade dampens down the behaviour switching effects when off-trade prices are increased."

Usual error of logic. If the off trade minimum is increased from 40p tp 50p, why would that encourage switching to the on trade with typically around an 80p unit price? In fact exactly the opposite would take place. To reach the same level of inebriation for the same cost, drinkers would consume a greater proportion of their units at home.

Michael J. McFadden said...

So the advice was "subject to legal privilege"?  

Correct me if I'm wrong, but my understanding of such phrasing would indicate that the "privilege" refers to the right t keep such advice private.  It does NOT forbid making the advice public.

If I am correct in that, then Lord Henley's decision NOT to make the advice public is pretty much completely and totally an admission that the advice was indeed that there were at least substantial legal difficulties.  Otherwise what possible motivation could he have for refusing to say "Our advice showed no conflict/problem." ?

It's sort of like being on a trial for murdering your wife.  The prosecution lawyer asks you, "Did you shoot your wife?"  and you answer, "My lawyer has advised me not to answer that question."

Well, duh, how many lawyers would tell their client not to answer that question if indeed the client did NOT shoot his wife?


Dick_Puddlecote said...

Jeff, that's the suggested minimum price for where it is 30p in the off-trade. The suggestion is 100p for where the off-trade is set at 40p. If we follow that upwards, it means the suggestions being made by politicians recently - anywhere up to 60p so far - mean the on-trade level would be set at up to 140p, meaning it would be illegal to sell a pint of Carling for less than £3.26 a pint. 

Dick_Puddlecote said...

The answer is what prompted the curiosity to look into it more, with more than a little help from Gawain. ;) 

Curmudgeon said...

But if the objective was purely to consume alcohol units as cheaply as possible, you wouldn't go out in the first place. You do that to socialise with friends, to celebrate etc.

And, accepting the logic of minimum pricing, relatively cheap prices within the on-trade are likely to encourage "irresponsible" consumption even if considerably higher than off-trade prices. Once you're in the bar, going to the offie is no longer an option. And you can't save on-trade drinks to consume the next day.

Ian R Thorpe said...

Not pissed Dick, just confused and bewildered as usual, they're politicians and tax eaters remember.
Trying to price tobacco out of people's range did not work, they just buy contraband now. Same will happen with booze, plus ... expect a rush of prople taking up home brewing.

frankc130 said...

Must seriously consider restarting the home brewing. Made some lovely beer which only cost about 30p per pint.