Over a four year period, Scotland’s minimum unit pricing has cost the equivalent of £59.39 per adult or £71.12 per drinker, according to the Institute of Economic Affairs (IEA).
Minimum Unit Pricing (MUP) was introduced in Scotland on 1 May 2018 at 50p per unit to prevent the sale of ‘cheap’ drinks, with the aim of reducing alcohol-related harm.
However, over the four years of implementation, MUP is estimated to have cost Scottish consumers £270m – significantly more than the £76m projected in models prior to implementation.
According to IEA, there is little evidence the policy has delivered the expected health and social benefits. Most indicators related to alcohol-related health, crime and employment have remained similar or worsened since MUP was implemented.
The cost to consumers is not collected as tax, but mostly accrues as additional revenue to suppliers of alcohol – which seems counterproductive to the Scottish government’s aims.
On the four-year anniversary of MUP, new research from the Institute of Economic Affairs, authored by Christopher Snowdon, John C. Duffy and Mark Tovey, reveals the policy will cost Scottish consumers £270m – over three times what was predicted.
This is equivalent to £71.12 per drinker or £59.39 per adult. The policy was primarily justified on the basis of computer modelling from a team at Sheffield University, the Sheffield Alcohol Policy Model (SAPM). The models projected improvements in various health and social outcomes. Public Health Scotland has not yet published an estimate of MUP’s cost to consumers.
The stated aim of the policy was to reduce alcohol-related harms, including death, crime and unemployment, by raising the price of the cheap, off-trade alcohol, i.e. alcohol purchased from retail outlets rather than hospitality, that is often associated with harmful drinking.
Lacking the power to raise alcohol duty itself, the Scottish government used MUP to drive up prices and lower consumption. It assumed a reduction in alcohol-related harms would follow.
But there is little to no evidence that the introduction of a minimum unit price in Scotland has had a positive impact on employment, crime and health as Sheffield modelled. Most of the indicators seem to have stayed the same or worsened since the introduction of MUP.
The projected impacts of the policy were so small it would be difficult to identify them in aggregate data. This raises the question of whether the projected benefits were ever enough to justify the projected cost – let alone the £270m the authors now estimate.
Co-author of the report, IEA Head of Lifestyle Economics Christopher Snowdon, said:
“Our estimate suggests that minimum pricing has cost Scottish drinkers more than a quarter of a billion pounds. Now in its fifth year, minimum pricing is a reminder that politicians are often responsible for the rising cost of living.
“Although alcohol consumption has fallen slightly in Scotland, we find no evidence that this has led to an improvement in health outcomes. Consumers have simply switched from the most affordable alcohol to mid-range brands, to the benefit of alcohol producers and retailers. The policy could be dropped tomorrow without costing the government a penny.”
