Response 194136287

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We invite comments on the proposed minimum price of 50 pence per unit which is set out in the draft Scottish Statutory Instrument at Annex A.

We invite comments on the proposed minimum price of 50 pence per unit which is set out in the draft Scottish Statutory Instrument at Annex A .
Scottish Government consultation on Minimum Unit Pricing of Alcohol: Asda submission 26 January 2018 Overview Alcohol consumption in the UK has been on a sustained downward trajectory for more than a decade, with the most recent ONS data showing that the proportion of adults drinking alcohol at the lowest level on record. Binge drinking and harmful drinking have also declined significantly over the same period, and the proportion of young people who are teetotal has risen. We recognise, however, that more can be done to tackle alcohol misuse and as a responsible retailer at Asda we are determined to play our part. We continue to demonstrate our willingness to act by implementing an extensive package of retail measures and advocacy work to ensure we sell alcohol responsibly and help our customers to make informed choices. In 2010 we made a voluntary commitment not to sell alcohol at a price below the cost of excise duty plus VAT – the only retailer to commit to doing so – and we offer a wide range of low or alcohol-free products to help customers moderate their alcohol consumption. In response to customer demand, in January 2018 we introduced 95 new non-alcohol beer and wine lines. We have voluntarily delisted certain high alcohol products from our shelves and reduced the alcohol content of others. The products we have removed from sale include all strong white cider, including Frosty Jacks (7.5% ABV) and Diamond White (7.5% ABV) and all non-premium, high-strength beers and lagers including Tennent’s Super (9% ABV) and Carlsberg Special Brew (8% ABV). We do not sell any carbonated product with more than four units of alcohol in a single-serve can or 15 units in a PET plastic bottle. We were the first retailer to introduce Challenge 25 in every store and we use an independent verification system (Serve Legal) to ensure that all of our colleagues are applying the policy consistently and appropriately. We support Community Alcohol Partnerships that aim to tackle public underage drinking and alcohol related anti-social behaviour through co-operation between alcohol retailers and local stakeholders. We are a leading funder of alcohol education charity Drinkaware, and this year extended our partnership to deliver alcohol awareness information events to Asda shoppers in 100 of our top alcohol selling stores, including 17 in Scotland. The aim of Asda’s in-store Drinkaware activity is to provide impartial, evidence-based information and practical resources to our customers in a non-judgmental, engaging and fun environment.   MUP Rate We are working hard to prepare our systems and processes for the introduction of MUP on 1 May 2018. We hope to ensure a smooth implementation that minimises confusion and disruption for our colleagues and customers. There is due to be only a very short period of time - around three months - between confirmation of the unit price and implementation of the policy. Given the complexity of the task facing retailers, including managing relationships with multiple suppliers, training colleagues, the process of setting thousands of product prices as calculated by ABV and product size and the introduction of new, sophisticated pricing systems, we would urge the Scottish Government to introduce MUP at the proposed level of 50 pence per unit. Any variance from this rate, which has been the basis of the government modelling and retailers’ preparations to date, would inevitably cause additional complexity for businesses and likely delay legal implementation of the policy. Our preference is that the 50 pence rate should remain for the full review period ahead of the sunset clause evaluation, which would provide welcome business certainty. Any future proposed increases to the rate should be founded on a robust evidence base and should follow a clear and agreed parliamentary process, including formal scrutiny and the publication of a detailed Business and Regulatory Impact Assessment. Retailers must be given early warning of any future increases and a sufficient period for implementation. In considering future rates, we would urge the Scottish Government to take into account the cost of living and wider pressures on household budgets, including price inflation, currency devaluation and rates of wage growth. Guidance We would urge the Scottish Government to publish draft guidance as early as possible to provide clarity for business over how the complex, technical details of MUP are to be administered. It is our preference that the Scottish Government uses as a template the guidance produced by the Home Office for the implementation of duty + VAT. That guidance was the result of detailed engagement between industry and government and the principles have been incorporated into all our compliance processes and systems. Mirroring the provisions of this guidance as far as possible will assist in ensuring a smooth and cost effective implementation of MUP in Scotland, particularly in the context of the tight timetable facing retailers. At Asda we take our responsibilities under the Grocery Supply Code of Practice (GSCOP) very seriously. The Home Office Guidance for duty + VAT specifically states in relation to GSCOP that: “If the retailer believes that they need to vary a supply agreement to comply with new legislation, section 3(2)(a) of part 3 of Code allows retailers to vary supply agreements retroactively to allow for circumstances outside their control. To comply with section 3(3) of part 3 of the Code, the retailer must give the supplier reasonable notice of any variation. A rise in duty rates may be a situation to which this part of the Code could apply.” We would welcome a similar approach in the guidance for MUP to support retailers who may need to change product listings as a result of the legislation. Customer communications MUP will result in increased prices at a time when shoppers are already feeling the impact of price inflation and wider pressures on their cost of living. We would like to see the Scottish Government deliver an appropriate customer communication campaign, both in advance of and post implementation of MUP, to ensure that customers are aware of why retail alcohol prices are changing. The campaign should include in-store communications as well as above-the-line activity. Enforcement We will make every effort to ensure that Asda is fully compliant with the legislation in advance of implementation on 1 May 2018. Given the stretching timetable for preparing the complex new systems and processes, however, we would be grateful for a period of grace post-implementation of at least four weeks to allow any systems glitches to be resolved before formal enforcement proceedings are carried out. We hope that the Scottish Government, and Licensing Standards Officers, will take a proportional approach to issues during this period as retailers adapt to the new legislation, and focus on deliberate breaches of the legislation rather than unintended consequences of the introduction of new systems and processes. Evaluation There is concern that MUP will lead to a number of unintended consequences and it is essential that the Scottish Government’s monitoring and evaluation of the impact of MUP include robust analysis of the following areas: increase in illicit or black-market trade; impact on own-label products and small suppliers; impact on responsible drinkers and low income households, and trade barriers for exports. We would also urge the Scottish Government to gather data from retailers, large and small, of the full costs associated with implementing MUP and to publish a full estimate of the cost of compliance with the new regulations. Redacted text

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Asda Stores Ltd