UK: Supermarkets close to Scotland report increased alcohol sales after minimum unit pricing introduction

Supermarkets close to Carlisle and Berwick reported a surge in alcohol sales after minimum unit pricing was introduced in Scotland, The Guardian reported on October 2.

A study for NHS Scotland found that alcohol sales jumped by 40% in one English supermarket close to the border and 25% in another, in the three months after cheap alcohol sales were banned in Scotland.

Minimum unit pricing (MUP) came into force in Scotland on 1 May 2018, in an attempt to cut Scotland’s higher-than average alcohol consumption and high death rates from alcohol-related diseases.

It bars retailers from selling alcoholic drinks, including beers, wines, spirits and ciders, at less than 50p per unit of alcohol. The Welsh government is also introducing minimum pricing and its cross-border effects will be closely studied by ministers in Cardiff.

The NHS analysis of the impact of MUP on retailers found this meant sales of cut-price drinks such as ciders or own brand vodka fell in Scotland, while overall consumption of alcohol fell slightly.

A study in the British Medical Journal last week found that MUP led to alcohol consumption falling by 1.2 units per person per week, equivalent to a measure of spirits or half a pint of beer. The impacts were greatest on the heaviest drinkers, whose consumption fell by 2 units.

The study, carried out for NHS Scotland by Frontier Economics over the first eight months of minimum pricing, found MUP had some impact on sales and profits, but that was cushioned heavily by a growth in sales of premium drinks with higher margins.

Some shops saw their profits go up, but none cut prices of other products to compensate customers.

The study found there was no evidence of so-called “white van runs” where vans were stocked up in English supermarkets with cheaper drinks for sale in Scotland, despite the fears of some retailers’ bodies before MUP came into force.

However, there was evidence that Scottish residents who work in or visited English towns close to the border appeared to buy far more alcohol in some stores than before.

That was not uniform: three of the five unnamed supermarkets near the border who were interviewed reported no change in their sales, and there was no evidence of a substantial fall in sales for Scottish shops near the border.

Two reported a “substantial increase” in sales, which tailed off slightly later last year but were “still well above normal”. Morrisons owns the supermarket closest to the border north of Berwick and Asda the supermarket nearest Scotland north of Carlisle.

The study said that could have been due to the hot weather last summer and the football World Cup in Russia, but it found comparable stores in other parts of England did not see such rises.

Andrew Leicester, from Frontier Economics, said a far more robust picture about the effects of MUP on businesses would take some time.

“The short-term impacts of MUP on the Scottish alcoholic drinks industry seen in this study are difficult to differentiate from other factors affecting the market – such as one-off events like the World Cup and periods of good weather,” he said.

E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at marketing@castlemalting.com .