Alcohol minimum pricing: a wholesaler’s view

A leading wholesaler this week voiced his views about the potential pitfalls of alcohol minimum pricing following the story in the December issue of Wholesale News.

The piece (http://bit.ly/RIFQtH) detailed the Government’s plan to introduce a 45p minimum unit price for alcohol in a bid to cut down on excessive drinking. The wholesale industry has broadly welcomed the proposals, believing they will help prevent the supermarkets’ aggressive discounting. However, there is also some concern that the same measures could fuel the growing illegal trade in duty-avoid beers and wines.

This week Greg Suszczenia, trading director for AG Parfett told Wholesale News: “I`m not really sure how the market becomes¬†more¬†appealing to fraudsters at this stage as this initiative does not mean a rise in duty.

“I do worry that eventually it will as the government may use this sell price discipline to treat alcohol in a similar way to cigarettes. In theory retailers will just make even more money on duty frauded stock, though sales may drop. Fraudsters may have to extend their ranges as different lines become bigger sellers in the light of forced high selling prices on high strength lager for example. It would be nice if suppliers didn’t allow this to happen.”

Suszczenia does believe minimum pricing will contribute a little more towards the shift to more responsible drinking, but added: “We are already heading that way anyway. Sales are in decline and abv levels are falling. However, we will continue to witness pre loading, binge drinking and alcoholism.

“How it effects our business is difficult. We have established that duty fraud will be as prevalent as it is now, but we already work well with our customers in the more differentiated aspects of alcohol such as world beer, ales, low strength beer and wine, broad range spirits etc. I would expect this to continue to grow. The most interesting part is that the incentive for the consumer to bulk up at supermarkets will be substantially reduced which could provide a real opportunity for increased sales in the convenience channel.”

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