ACS Submission: Public Health (Minimum Price for Alcohol) (Wales) Bill
ACS (the Association of Convenience Stores) welcomes the opportunity to respond to the National Assembly for Wales Health, Social Care and Sport Committee’s consultation on the Public Health (Minimum Price for Alcohol) (Wales) Bill. ACS is a trade association, representing 33,500 local shops across the UK including Co-Op, One Stop, McColls Retail and thousands of independent retailers. In Wales, there are 3,185 convenience stores, employing 20,380 people[1].
Convenience stores provide a range of products and services, including Post Offices, bill payment services, and ATMs to local communities. Alcohol is an important product category for convenience retailers, with 80%[2] of stores in Wales holding an alcohol licence, and an average of 14.3% of store sales represented by alcohol[3]. ACS supports the Welsh Government’s aims to tackle alcohol related harm and is an active member of the Welsh Government Alcohol Industry Network.
Convenience stores have a role to play in addressing alcohol-related harm and are taking action to reduce underage sales and promote responsible retailing. We acknowledge that there is more work to be done to reduce alcohol-related harm. ACS will continue to work with convenience retailers to promote responsible retailing and encourage retailer engagement with local partnerships.
ACS is not convinced that the introduction of Minimum Unit Pricing (MUP) will have a significant impact on alcohol related harm. We believe that tackling alcohol related harm is more complex than the introduction of an increase in price. Instead, tackling alcohol-related harm must be done in partnership with all stakeholders to instigate long term change in drinking behaviours.
Alcohol consumption and alcohol related harm is in long term decline. The proportion of people who drank in the last week fell from 64.2% in 2005 to 56.9% om 2016[4] and the proportion of people that have binged in the last week has fallen from 29% in 2005 to 26.8% in 2016[5].
ACS previously responded to the Welsh Government’s consultation on minimum unit pricing in 2015. Our submission can be found here. In our submission, we raised concerns about the additional administrative and financial burdens that the introduction of minimum unit pricing would have on retailers and recommended that instead the Welsh Government continue to focus on using existing powers under the licensing system and targeted funding at a local level to tackle alcohol related harm.
Impact on Retailers
We expect that there will be a limited business impact on convenience stores in terms of the price of the alcohol products sold in store. However, we agree with the Impact Assessment’s conclusion that “that considerable uncertainty exists regarding retailers’ responses to the introduction of an MUP. Retailers and producers may make a range of additional changes to both prices and products which may impact on resulting revenue changes to the Exchequer and retailers and other modelled outcomes”. As MUP has yet to be introduced elsewhere, we will not be aware of the full impact on retailers until the legislation has been introduced. Therefore, we encourage the Welsh Government monitor and evaluate the introduction of minimum unit pricing in Scotland before implementing the legislation in Wales.
What we do expect from the introduction of MUP is a significant impact in relation to implementation and compliance. MUP will bring a training burden for retailers to ensure staff aware of the new law and its implications for them and the business. It is not simply about ensuring the prices on the shelf are not in breach of the law, but also how they handle more complex customer transactions such as promotions, vouchers or refunds - all of which will require a procedural overhaul. National retailers will also incur additional costs with having a different pricing and promotion regime in Wales.
Cross-border sales will also impact retailers. The Bill's Impact Assessment currently estimates that 4.91% of the total Welsh grocery spend is spent in England and not anticipated to increase following the introduction of MUP. However, as MUP has yet to be introduced elsewhere, and without understanding Welsh consumers' current alcohol spend in England the full impact of cross-border sales is unknown.
Moreover, while the Bill's Impact Assessment recognises that cross-border sales will have an impact on retailers, it states "the cross-border issues are further mitigated by the fact the target population for minimum unit pricing mostly do not live close to the Wales- England border.". As stated above, minimum unit pricing is a blunt instrument and affects all consumers. Therefore, the impact of cross-border sales cannot be mitigated by the fact the target population do not live on the border. We would welcome further assessment of MUP's impact of cross-border sales.
Given that the Scottish Government intend to introduce MUP in 2018, and that it is still under consideration in England, we would welcome assurances from the Welsh Government that they will ensure consistency with the Scottish MUP legislation. National retailers will incur additional costs with having a different pricing and promotion regime in Wales and Scotland. Consistency will ensure that these retailers do not face further burdens by being required to comply with different minimum unit price legislation in each country.
Legal Issues
We seek clarification that the provisions in the Public Health (Minimum Price for Alcohol) (Wales) Bill are within the legislative competence of the Welsh Government[6]. While the Presiding Officer has confirmed that the Bill is within the Welsh Government’s powers to introduce legislation for the ‘promotion of health’, minimum unit pricing relates directly to the sale and supply of alcohol, which the Welsh Government do not have the legislative powers for.
We would also welcome further clarity on the legality of these proposals and their interaction with the Licensing Act 2003. Currently the Bill intends to amend the Licensing Act 2003, for example, making it a relevant offence to breach the Public Health (Minimum Price for Alcohol) (Wales) Bill. If the Welsh Government are to introduce minimum unit pricing under their powers for the ‘promotion of health’, the Bill should be independent of the Licensing Act.
Tackling Alcohol Harm
As set out above, we believe that minimum unit pricing would act as a blunt instrument instead of focusing more on drinkers who would need more support to curb their consumption. We instead recommend that the Welsh Government prioritise work that is already being done to reduce alcohol-related harm, through partnerships with industry, and increasing enforcement action against irresponsible retailers.
Tackling Illicit Alcohol
The Welsh Government should consider tackling the illicit alcohol trade as part of its strategy to tackle alcohol-related harm. The illicit trade poses a significant threat to legitimate sales and we do not agree with the Welsh Government’s view in Paragraph 229 of the Explanatory Memorandum which states that illicit alcohol is “not currently a significant problem in Wales”. The cost of the illicit alcohol trade to the Exchequer was £1.3 billion in 2015-16[7] and undercuts legitimate retailers by driving footfall away from their stores
We have concerns that MUP will only add further pressure on already limited enforcement resources. We believe the police and other enforcement bodies, including trading standards, should focus on tackling the non-duty paid and illicit alcohol trade. The Licensing Act 2003 provides licensing authorities with powers to remove alcohol licences from retailers who participate in the sale of non-duty paid alcohol, however this power is not often used. In a survey of independent convenience retailers, 67% agreed that retailers that are found selling illicit alcohol or tobacco should have their alcohol licence removed[8]. ACS supports the introduction of tougher penalties for retailers that engage in the illicit market and greater funding for police, HMRC and trading standards to tackle this issue.
Industry Action
Retailers have taken proactive action to tackle alcohol-related harm and have been heavily engaged with a number of age verification schemes including ‘Challenge 25’[9] which has reduced underage access to alcohol. Polling of ACS members in 2012 showed that 70% of retailers had an age verification policy in store and it was found that more than a quarter of retailers refused age restricted sales more than ten times a week[10]. Serve Legal, an independent test purchasing company, found in 2015 that convenience stores had an 83% pass rate[11], an increase of 18% since 2008.
The industry has also taken proactive action to promote responsible retailing amongst the off-trade. Most notably, the industry set up the Retail of Alcohol Standards Group (RASG)[12], Proof of Age Standards Scheme (PASS)[13], and Community Alcohol Partnerships (CAP). ACS continues to promote the work of CAP which are locally based projects that tackle underage sales and anti-social behaviour by bringing retailers. We would welcome further engagement with the Welsh Government on how we can work together to promote CAP in Wales.
For more information about this submission, please contact Julie Byers, ACS Public Affairs Manager by emailing XXXXXXXXXXXXXX or calling XXXXXXXXXXX.
