Cider industry warns of ‘unintended consequences’ over tackling alcohol misuse

The UK cider industry has cautioned that an over reliance on price as a means of tackling problem drinking could have ‘unintended consequences’ that might damage the industry – in particular the craft scale producers.

In the June Budget the Government said it was ‘reviewing the taxation and pricing of alcohol to ensure it tackles binge drinking without unfairly penalising responsible drinkers, pubs and important local industries,’ and invited interested parties to submit their views and comments.

It is undertaking the Alcohol Taxation and Pricing Review under three broad headings:

Licensing – a Home Office consultation on reforms to the Licensing Act.

Pricing – a government commitment to a ban on below-cost sales of alcohol. Pricing forms part of the Home Office consultation, and 

Taxation – an HM Treasury review to consider tax-based measures to address problem drinking.

‘We welcome the recognition that those who consume alcohol in moderation will not be unfairly penalised as it has always been our position that there are not problem drinks, only problem drinkers but we have concerns that there are pressures for alcohol pricing, whether in the form of measures on sales or on the duty regime to be increased, which could have adverse and unintended consequences for our industry,’ said Bob Price, NACM Director General.

In its response the NACM said the panoply of powers already available to the police and local authorities should be used much more effectively both against individuals who misuse alcohol and those who wilfully seek to break the law in obtaining alcohol underage, as well as against those retailers who sell alcohol irresponsibly.

‘It has become apparent that no effort has been made by those wishing to introduce further legislative controls on the availability and the price of alcohol to identify and deal with the real causes of alcohol misuse (and indeed substance abuse in general),’ said Mr Price.

‘It is short-sighted to focus on the availability and affordability of alcohol as the sole and root cause of misuse and this means that the real causes of such behaviour remain in operation and are therefore ignored and not acted on.

‘The real drivers behind harmful drinking, binge drinking behaviour and under 18’s alcohol misuse are overlooked as a consequence. Failure to get this right means that behaviour does not change, misuse and harmful drinking continues but the general public are penalised as a result of failed policies built on false premises.’

The NACM also tackles the issue of alcohol promotion.

Said Mr Price: ‘We are aware of reported concerns over the way prices for alcoholic beverages are reduced for promotional activity. However, this is a directly legitimate and effective way to introduce consumers generally to new products and product variants as well as securing brand market shares.

‘The unintended consequence of, for example, blanket bans or restrictions on price promotions will be to inhibit new product introductions: before any product is put on sale more widely it is usually trialled and promoted in a limited number of on and off-retail outlets.

‘Without the ability to promote such new products, producers will not be able to introduce them to the public at large. Inevitably the market will stagnate and will become characterised by lower quality and cheaper products, he said.’

Mr Price said that any proposals should take account of the special nature of the cider industry and its importance to the rural economy.

He pointed out that the industry’s commitment to self-reliance is shown by NACM estimates that, in 2009, cider apple orchards already accounted for more than 45% of total UK orchard area and will be the majority by the end of 2010.

‘This significant need brings real risk to rural economies should the cider industry suffer reverses,’ he said.

Owing to its small relative size, the cider industry lacks economies of scale. Stemming from this are demands from distributors and retailers for higher margins on cider than on the larger volume and value sectors of the UK drinks market. The rural base of the industry compounds this effect.

‘We welcome the opportunity to take a constructive role in this important debate and to point out the need not to damage the deep rooted rural traditions that the cider industry encapsulates - and with it the fragile economy of the countryside,’ he said.

The full response can be accessed here

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