Minimum price for alcohol is illegal: Europe's warning to Cameron as he pushes ahead with price hike
Prime Minister wants to ban the sale of alcohol for less than 45p a unit
He has been told this will contravene laws of the free movement of goodsWine-producing nations such as France,
Italy and Spain are planning to take Britain to court for breaching EU lawTypical family's drink bill set to soar by 100 a yearResearch found 59 per cent of alcohol costs less – meaning price will go upGovernment say plan will cut crime and health problems
10:48 GMT, 29 November 2012
Putting a minimum price of alcohol is illegal, the European Commission has warned David Cameron.
The nine-page letter from Brussels to the Prime Minister says the scheme would break laws governing the free movement of goods.
The Home Office proposal is to ban the sale of alcohol for less than 45p per unit in an effort to target heavy drinkers.
'Turn back': The European Commission warned Cameron that minimum pricing contravenes laws governing the free movement of goods
It will mean that wine cannot be sold for less than about 4.05 a bottle, beer will be at least 90p a can and a stand-size bottle of vodka will cost at least 11.70.
The average family drinks bill will soar
by almost 100 a year under the Government’s plan for minimum pricing
for alcohol, it was revealed last night.
In the leaked letter, the European Commission advised the Treasury to increase duty on alcoholic drinks if it wishes to raise the price, the Scottish Daily Mail revealed.
The Government appears to be ignoring the legal warning, however, and is forging ahead with the plan, claiming it will save hundreds of lives and millions of pounds of public money each year by cutting crime and
health problems linked to binge drinking.
Wine-producing nations such as France,
Italy and Spain are planning to take Britain to court for breaching the
EU law on free trade.
Research has found that 59 per cent of all alcoholic units sold in off-licences and supermarkets cost less than 45p per unit – meaning their price will go up.
Increase: An average family's drinks bill will rise by almost 100 if Government plans to increase the minimum price of alcohol
A couple who drink the average amount will see their annual grocery bill rise by around 94 a year.
The finding by the respected Institute for Fiscal Studies (IFS) is a blow for the Government’s claim that the plan will target only binge drinkers.
European officials have already written to Alex Salmond, the Scottish First Minister, to warn that Scotland’s 50p minimum price plan may contravene EU rules.
The UK Government had gone to court to keep the embarrassing letter to Mr Salmond secret – now it emerges that they have had one of their own.
Catherine Day, of the European Commission, explained that supermarkets would simply sell more alcohol to boost profits, and she said the plan would create ‘market distortions’.
Miss Day said: ‘The UK authorities are invited to abstain from adopting the draft legislation at issue.’
The Government believes imposing a 45p minimum unit price will reduce total alcohol consumption by 3.3 per cent, and cut the number of crimes by 5,000 per year and hospital admissions by 24,000.
There will be 700 fewer alcohol-linked deaths annually, according to the predictions.
However, the IFS said that while ministers are right to say the heaviest drinkers will be the most affected by price rises, there will also be an impact on moderate drinkers.
Those who drink less than seven units a week will see grocery bills rise, because 48 per cent of the units they buy tend to be less than 45p.
The IFS research also found that one of the drinks most associated with binge drinking – alcopops – will hardly be affected by the minimum price at all, because it almost always costs more than 45p a unit anyway.
Clash of opinion: Home Office minister Damian Green, right, said cheap alcohol contributes to 'harmful levels of drinking' while Catherine Day, left, of the European Commission, said the plan would create 'market distortions'
In contrast, 72 per cent of the units
in lager sold in shops, 70 per cent of the units in spirits and 46 per
cent of units in table wine cost less than 45p and will therefore be
They found that
if no one changes their habits in response to the price rises, the
minimum price will simply transfer 1.4billion from consumers to
off-licences and supermarkets.
Miles Beale, of the Wine and Spirit Trade Association, said: ‘Minimum unit pricing and the proposed restrictions to promotions are wholly untargeted and will unfairly punish millions of consumers and businesses in the UK, while doing nothing to tackle the root causes of alcohol misuse or associated crime and disorder.
‘Alcohol misuse is a serious and complex problem for a small number of people in this country.’
The report confirms that low-income families will see the largest increases in prices, because they are most likely to buy cheap alcohol.
And they say there is no evidence the plan will actually reduce harmful drinking.
‘The most important issue in determining the impact of minimum pricing will be whether those who generate the greatest social harms from their consumption drink less as a result of the policy,’ the report said.
‘That will depend on how well targeted on those drinkers a minimum price is, and how their consumption responds to price rises – something we know relatively little about.’
Home Office minister Damian Green told BBC Radio 4’s Today programme: ‘The evidence is clear – the availability of cheap alcohol contributes to harmful levels of drinking. It can’t be right that it is possible to purchase a can of beer for as little as 20p.
‘Too many of us have seen city centres on a Friday and Saturday night often become a vision of hell. A lot of this is fuelled by very cheap, very strong alcohol.’