The Scottish government does not expand, and despite the social consultation from the beginning of December to the end of January, it seems to be a fact to consider raising the mandatory minimum price of alcoholic beverages from 1 May. The measure is backed by the reduction of alcohol consumption, but according to a report, the government can even overcome the target, it is anticipated that such an increase will take place.
On average, the consumer prices of alcoholic beverages may increase by up to 35 percent from May 1, if the Scottish Government has come up with a government regulation on raising the minimum price – the BBC writes on several other online portals. The change would affect 70 percent of alcoholic beverages. Though the decision is basically a welcome goal, some people are warning that price expansion can cause consumption so much that it may have budgetary implications.
The Supreme Court of the United Kingdom in its earlier decision found it legitimate for the government to set a minimum selling price on alcohol based on the percentage of alcoholic strengths of the products. Manufacturing companies lost this important battle against the state, which
with the drastic increase in the number of deaths associated with alcohol consumption,
to partially offset market conditions, you want to control the prices.
The Scottish Government has now decided to raise the minimum price to 50 pounds based on the percentage of alcoholic strengths of the products.
1 percent alcohol content would be at least 50 pennies from 1 May, instead of the present value, other than the beverage.
However, this can increase the consumer price of products even more than before a similar step – warns the Institute for Fiscal Studies (IFS), a London-based, prestigious economic research institute. However, IFS says,
it is not guaranteed at all that decision-makers will not be well-offed by increasing margins and gaining more profits.
Analysts believe that the price regulation issues of alcohol should be reconsidered in line with the provisions of the tax reform. In the absence of this, the budget can not rely on the expected revenue.
The Scottish government argues that the introduction of the minimum unit prices had previously tangible results. In the past five years, with the manufacturers coming to war for their decisions, the number of alcohol-related deaths decreased by 392, and 8254 less hospital admissions were registered in the context of drinking. IFS believes that,
it is highly probable that the current unit price increase currently planned is aimed at the group of addicts or large drinkers.
Several studies have shown that cheaper and higher alcoholic beverages are preferred.
Manufacturers, in any case, are worried because of the considerably rising consumer prices due to the decision that the demand for products will be reduced.
According to some calculations, the price of cereal drinks may rise up to 90 percent, while cheaper beers will have to pay up to 44 percent. Tesco’s own branded sherry drink would cost 20 percent more from May.
The minimum unit price is determined on the basis of the alcohol content of the product, so the Scottish government wants to standardize the price thus far, which would dramatically toss the cashier’s display on the cash register display.
The situation is further complicated by the fact that the tax content of the products is not the same, and that it is incorporated into EU regulation.
For example, 1 liter of 7.5 percent beer tax is three times higher than the price of one liter of cider of the same strength as 1 liter. According to an analyst at IFS, government should approach the tax content of the two product groups. Additionally, there is a need to settle in the rather confusing tax rules if you expect revenue from alcohol consumption and hope for a reduction in the number of alcohol-related issues.
Between the alcohol producers and the Scottish government, there has been a decisive battle for price formation in the form of court proceedings for years.
Manufacturers are afraid they will significantly reduce their revenue due to the new provision. Not least because of the fact that Scotch whiskey can even be pushed up within the country from other areas of the United Kingdom, now the introduction of a minimum unit price for alcohol in Wales.