Measuring the effectiveness of minimum unit pricing of alcohol in reducing alcoholism in Scotland

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November 2020

The Alcohol (Minimum Pricing) Act was passed into Law by the Scottish Parliament on 24th May 2012, with later implementation arriving on 1st May 2018 after years of “industry-initiated legal challenges” (Katikireddi et al. 2014, p. 1) by those opposing the legislation (Christie 2017). The act stipulated a minimum charge of £0.50 per unit of alcohol which is sold throughout the country (BBC News 2018). While this bill targeted the selling price of alcohol in all industries, off-license stores such as supermarkets and corner shops faced the brunt of this legislation as these stores were the operators who were commonly selling alcohol at the low prices which would now be illegal under the new legislation (Jiang et al. 2016, p. 226–227). While the intention of the legislation was clear, curbing the rampant culture of alcohol abuse throughout the country, critics of the bill argued that these measures were not relevant to their ambitions of quelling alcohol abuse. In this essay I will detail the case for introducing minimum alcohol pricing in Scotland and continue to explain the goals and expectations of this legislation, before concluding on the effectiveness of this bill and where the legislation belongs in the overall discussion of reducing alcoholism in Scotland.

The evolution of alcohol policy throughout the UK in the late 20th century has led to the redefining of what is the popular meaning of ‘binge drinking’ (Berridge, Herring and Thom 2009, p. 597–599). Initial definitions began appearing in the post-war era with the idea of the binging alcoholic who was a ‘periodic drinker with periods of sobriety in between’, as famously depicted in hit novel and subsequent movie The Lost Weekend (Jackson 1944). This definition has evolved over time, while retaining the initial designation, to also define those who consume copious amounts (“≥7 units in a day in the last week for women and ≥10 for men”) of alcohol in the one sitting (Emslie et al. 2009, p. 12), despite perhaps keeping sober the remainder of the week. This shift in definition has led to a deeper study into how the public consumes alcohol. While many countries struggle with controlling the populaces intake of alcohol, the UK nations are notorious for their drinking problems above and beyond the norm, leading to certain groups being defined the worst binge drinkers in the world (Dobson, Goodchild and Woolf 2006). This behaviour is consistent across all gender and age groups, fuelled by a culture where binge drinking is considered ‘harmless fun’ by students (Guise and Gill 2007, p. 895–906), an attitude which can lead to widespread alcohol related issues later in life. Extensive studies have shown a correlation between adolescent (10–24yrs) drinking and a binge drinking habit later in life (Jefferis, Power and Manor 2005, p. 543–549), as well as earlier onset issues of increased alcohol‐related problems whilst undertaking studies (Jennison 2004, p. 659–684). While research has shown higher prevalence of binge drinking within certain faculties (Newbury-Birch, Lowry and Kamali 2002, p. 646–649), in general UK students binge drinking habits “exceed those of their peers in the general population and their US counterparts” (Gill 2002, p. 109). Unfortunately, this issue is not one which is known to be unique and exclusive within the UK to just students. The Scottish population in general hold a “reputation” for the excessive consumption of alcohol (Smith 2018) with two thirds of participants in a survey stating that ‘Drinking is a major part of the Scottish way of life’ (Bromely and Ormston 2005, p. 15). Part of this is due to the drinking culture not remaining exclusively within students but expanding across groups throughout all walks of life and is engrained into the culture. For some, excessive drinking is considered to be “central to socialising” (McKenzie and Haw 2006, p. 29). One of the primary causes for this was the extremely cheap alcohol available in Scottish retail outlets. This low priced alcohol has had many negative social consequences as a result of the gradual lowering of prices, ranging from the quadrupling of alcohol related admissions in hospitals, to half of all crimes now being attributed to the consumption of alcohol (Christie 2012). Such effects are greater suffered within “deprived groups” (Johnston, Ludbrook and Jaffray 2012, p. 729). With around one in five Scots exceeding recommended weekly consumption limits (Gill et al. 2010, p. 398), it is not incorrect to define the issue as an “epidemic” (Healy and Connolly 2008, p. 177) which is costing the health services an estimated £3.6 billion a year (Hillen 2018, p. 172). “The average annual quantity of alcohol bought in Scotland…is 40% above recommended safe drinking limits” (Christie 2018).

The Scottish government responded to this crisis with a variety of “ambitious” (Wright 2019, p. 1) efforts resulting in varying levels of success. The ‘Alcohol etc (Scotland) Act 2010’ came into force on Oct 1, 2011 and stipulated a “ban on multi-buy discounts of alcohol in Scotland’s supermarkets and off licences” (Robinson et al. 2013, p. 17). The implementation of this bill resulted in a very minimal change as shown in Appendix. 1. A decrease of only 2.6% was shown in consumption throughout Scotland in comparison to England & Wales, an essentially insignificant change and not at all reflective of the desired intention of the government (Robinson et al. 2014, p. 2035–2043). This legislation, while showing some effect, was not successful in its intentions as it did not bare the expected or required outcome. “Banning multi‐buy promotions for alcohol in Scotland did not reduce alcohol purchasing in the short term. Wider regulation of price promotion and price may be needed to achieve this“ (Nakamura et al. 2014, p. 558–567). Such further regulation came into place within the Alcohol (Minimum Pricing) Act 2012 which integrated further regulation of alcohol sales throughout Scotland. Such regulation will be the focus of this essay. This act stipulated a minimum price per unit (stipulated in the UK as 10ml of ethanol (Chandla 2015, p. 77)) of alcohol in a beverage, initially set at £0.50. By doing this, Scotland became the first nation in the world to integrate a government mandated “strength-based floor price which applied to all alcohol sold in or through licensed premises” (Beeston et al. 2020, p. 1). Such regulation targets “high strength, low cost products, that cause the most health harms” (J. Mooney and Carlin 2019) specifically in off-licence venues, as alcohol which is sold is licensed premises (bars, restaurants etc.) is priced at such a point that minimum alcohol pricing (MUP) should be nowhere near the current prices charged (O’May et al. 2016, p. 2).

It is important to note the differentiation between MUP and any similar taxation schemes such as volumetric tax. Volumetric tax refers to government taxation “whereby all alcoholic beverages would be taxed at a common rate according to alcohol content” (Carragher and Chalmers 2011, p. 13). Volumetric taxation provides “somewhat less reductions in heavy consumption than a MUP, and would result in relatively greater increases in the cost for light, moderate and heavy consumers” (Sharma, Vandenberg and Hollingsworth 2014, p. 12). Further conclusive studies demonstrated that “to achieve the same reduction in alcohol-related deaths among hazardous and harmful drinkers as a 50p MUP, a 28% increase in alcohol taxation would be required” (Angus et al. 2016, p. 87). This system therefore has its merits such as the government collecting the resultant increased revenue to be spent elsewhere rather than increasing the profits of private businesses, as is with the case with MUP. As shown in Appendix 2, a £0.50 MUP is expected to result in a reduction (-1.3%) in alcohol related taxation, compared to a large expected (+18.4%) increase in revenue from such a 28% increase in taxation. To compare, the same £0.50 MUP is expected to increase private business revenue (+2.5%) while a 28% tax rise would reduce it by nearly twice as much (-4.6%) (Angus et al. 2016, p. 75). Because of this, the MUP vs taxation argument is more complex than may seem as it can be seen as a decision between allowing further retailer profits or increasing public income as a result of said price increases, of which said income can be reinvested in other initiatives. However, MUP is the clear choice for policy which seeks to quell troublesome drinkers while not impacting those who are defined as light, social drinkers, while also reducing “alcohol consumption and alcohol-related harm” (Boniface, Scannell and Marlow 2017, p. 12) across the board.

The economic argument for MUP can be seen to centre around the study of the elasticity of demand for alcohol. For this concept to be used in relation to MUP, the study of both the own-price elasticity of demand and the cross-price elasticity of demand is important as while reducing the consumption of specific beverages is critical, it is important to also ensure that ‘harmful’ drinkers do not just settle for an alternative. As shown in Appendix 3, with values on the diagonal representing own-price elasticities and remaining values representing cross-price elasticities (Meng et al. 2013), when considering off-licence beverages, the own price elasticity of demand for each individual beverage indicates a fairly sizable drop in demand when price is increased. The cross-price elasticity for many beverages also shows a drop in sales following a price drop in alternatives, however some do show the substitution effect in play and demonstrates an increase in demand. However, it is important to note that these figures indicate that there is no price increase for any other variables other than the beverage in question, which is not how MUP will play out as MUP “applies a uniform minimum price per unit across all beverage types” (Katikireddi et al. 2019, p. 2). Within these uniformed price increases, changes will be especially noted for the cheapest option of each type of drink as these are the common offenders which tend to promote binge drinking. Because of this, the own-price elasticity is considered to be more noteworthy in simulations such as the Sheffield Alcohol Policy Model (Meng et al. 2013) in which these figures are taken from. Further analysis from the Sheffield Alcohol Model can be seen in Appendix 4 which details the estimated reduction in consumption based upon MUP price points to specific classifications of drinkers. Alternative modelling by the Scottish Government indicated that MUP would lead to the saving of “almost 400 lives in the first five years of implementation” (Christie 2019). Economic modelling is also useful (however never completely accurate) to predict other social side effects as a result of the increased price of alcohol. One of the most prevalent of these side effects is the concern over increased drug consumption (Duffy 2019), however reliable models suggest that such trade-off are “unlikely to be important” (McCartney et al. 2016, p. 24–32) as to effect the general populous as a whole.

While economic modelling is an important tool to pre-emptively analyse the success of future policies, now that such legislation has been passed into law, we are able to begin to analyse the actual result of such regulation. Studies have shown that “immediate reduction [in sales] were most notable for beer, spirits, and cider, including own brand spirits and high strength white ciders” (J. Mooney and Carlin 2019), of which items were considered to be the products which spurred on the legislation in the first place. Overall sales of alcohol dropped “4–5% in the year after minimum pricing was introduced” (Christie 2020), indicating the initial success of the initiative with immediate analysis of the implementation indicating that “reductions of purchased alcohol only occurred in the households that bought the most alcohol” (O’Donnell et al. 2019, p. 1). Such success has led to calls for the legislation to set as an example for the rest of the UK to take up similar legislation and follow “Scotland’s lead” (Graham 2019), expanding the MUP across the whole of the UK. Public opinion on the back of the implementation was narrowly positive which mirrors the views of the overall British population who would favour a MUP being implemented (Wright et al. 2019, p. 5). Such success has led to the World Health Organization citing Scotland’s progress in creating a MUP as a factor for their support for such measures, “The evidence to support the introduction of MUP is very strong” (World Health Organization 2020).

To conclude, the implementation of a £0.50 minimum price per unit within Scotland has been a widely successful initiative which has had numerous positive outcomes so far when real world data is analysed. This success is concurrent with economic modelling which predicted such outcomes, showcasing that said results are truly the consequence of the MUP legislation and not a lucky set of results. These results can be seen as effective substantiation for the implementation of a MUP elsewhere for nations with similar issues.

Appendix. 1

(Robinson et al. 2014, p. 2035–2043)

Appendix 2

(Angus et al. 2016, p. 75)

Appendix 3

(Meng et al. 2013)

Appendix 4

(Meng et al. 2013)

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