Monday, 29 March 2010

Blackballing the Black Stuff

In the ongoing debate about alcohol it should now be obvious that the so-called 'drinks industry' has no common purpose as regards its approach to the SNP Government's minimum pricing proposal, and a proper appraisal must distinguish various competing interests.

These nuances have been mentioned here once or twice before. Most obviously, the profit motive dictates that where a drinks industry player stands on minimum pricing will depend on its position in the market. A distiller of a premium whisky, for example, would have no objection, because minimum pricing could stifle competition from cheaper brands, while the latter are clearly less likely to be in favour.

Since the pub trade tends toward higher pricing than off-sales outlets, the former will find the proposal more attractive than the latter. But it should be recalled that when several local authorities introduced minimum pricing for licensed premises in their areas it was other pubs that mounted a legal challenge which resulted in the policy being declared illegal. What matters is the level the minimum price is set at and where the business competes in the market.

And yet more evidence of the heterogeneous nature of the drinks industry comes via a story in yesterday's Sunday Post, which says that some Scottish pubs are threatening to boycott several brands - including Smirnoff vodka, Whyte & Mackay whisky and Guinness - because the drinks companies involved do not support minimum pricing.

And it's perhaps instructive that there's little talk from the publicans about the social responsibility aspect of the proposals, and their complaints seem largely about competition issues, as per the publican in Newburgh who (unsuccessfully) asked Fife Council to review the licenses granted to supermarkets.

Of course, despite the SNP doing the publicans' bidding for them, it seems unlikely that we'll be hearing the politicians beating the drum for pub profitability, although of course that goes hand in hand with minimum pricing.

And I wonder if the pubs themselves might be in breach of competition law if they get together to organise a boycott?

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