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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 .
C&C Group plc. has been a supporter of Minimum Unit Pricing since proposals were first put forward in 2011 and formed part of the SNP’s manifesto on which they were elected to Government. As a brewer since 1556 and cider maker since 1935, we are committed to alcohol responsibility, the long term future of our industry and tackling the misuse of alcohol and resulting harms in the markets in which we operate. We believe that the Scottish Government’s preferred minimum price of 50 pence per unit is appropriate and proportionate. This will achieve the stated aim of reducing the impact of alcohol misuse on public health and services, productivity and economy by targeting the cheap, strong alcohol that heavier drinkers tend to drink. Our rationale for supporting a Minimum Unit Price of 50 pence per unit is as follows (1) The Sheffield Model, which is the foundation of the Scottish Government’s thinking on Minimum Unit Pricing, was based on 50 pence. The Model was refreshed as recently as December 2016, and shows that a Minimum Unit Price of 50 pence continues to be at a targeted and proportionate level to achieve the stated outcomes. A Minimum Unit Price above 50 pence, moves away from targeting cheap, strong alcohol and heavier drinkers and would begin to impact moderate drinkers (especially those in poverty). (2) 26% of Beer and Cider is currently purchased in “Large Pack” (18-24) format. Our research highlights that the drop off following the introduction of a Minimum Unit Price of 50 pence is sufficient for this format to disappear within 18 months following introduction as - a. The increased price will see drinkers reduce the amount of “Large Packs” they purchase b. Reduced frequency of purchase will see retailers de-prioritise this format c. With no price per litre (PPL) advantage for buying in bulk, product is consumed closer to time of purchase which will encourage shift to smaller packs. d. Consumption will reduce as drinkers who wish to consume more would have to visit shops more often. (3) Arguments for a higher Minimum Unit Price, are largely justified on inflation since the Alcohol (Minimum Pricing) (Scotland) Act was passed in 2012. However, this is not a valid justification as wage growth has not kept pace with inflation over this period. A recent Resolution Foundation Report, highlights that the decade to 2018 would mark the worst period for wage growth in nearly 200 years. Currently Consumer Price Inflation (CPI) is at 3.1% and Wages Growth at 2.2% (Dec 2017). Also, a. Inflation is likely to continue due to the weak pound that has seen increases in food, drink, petrol and utility prices. This has been compounded by increases in interest rates and Council Tax. b. As a result, Real Wages are set to continue to fall (PWC Predictions for 2018). (4) A Minimum Unit Price above 50 pence would further exacerbate recent declines in beer volumes following duty and inflation increases. Beer is currently minus 5% in Scottish Supermarkets in the 26 weeks to 4th Nov 2017. (5) The Alcohol (Minimum Pricing) (Scotland) Act 2012, comes with “enabling legislation” and the impact following introduction is being closely assessed by the NHS. If 50 pence is failing to achieved the desired outcomes, this will be identified quickly and corrective action can be taken.

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George Kyle

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C&C Group plc / Tennent Caledonian