The recent order on alcohol pricing has finally put an end to a five-year-long discussion on the minimum pricing for alcoholic beverages. Even though the Alcohol (Minimum Pricing) Act was approved already in 2012, it was challenged by the Scotch Whisky Association for breaching EU law. The UK Supreme Court cleared the challenge in November last year, paving the way to application of the Act from May 1, 2018.
The Act provides the formula for calculation of the minimum pricing of alcoholic beverages:
MPU x S x V x 100
MPU is the minimum price per unit, S is the strength of the alcohol and V is the volume of the alcohol in liters.
From May 1, the minimum unit price will be set to 50p (about $0.7), and when the above-given formula is applied to the prices of some of the popular drinks, the minimum price for lager will be set to £1, for cider to £2.50 and for whisky to £14.
This will be a significant change, having in mind the estimation of the Institute for Fiscal Studies that roughly 70% of shop-bought alcohol in Britain is priced at below 50p a unit. The new legislation will mostly hit the cheapest, strongest drinks. On the other hand, the drinks whose prices are already above the threshold will remain unaffected. Same applies for pubs and bars, as they usually charge above the prescribed minimum.
The legislation will remain effective for six years, unless renewed.