Buckie or Bruichladdich? You Pay the Price

Scotland’s relationship with fags and booze has been one of the main foci for this government.  It is, as I’ve argued before, the fig leaf behind which hypocrisy, sorry modesty, is preserved, as in the laughably titled ‘health levy’.

But recent announcements, north and south of the border, have caused me to ponder how we are differentially treating cigarettes and alcohol and how this is going to impact retailers trading across the border.

Cigarettes are taxed to the hilt by the UK government, leaving the Scottish government to pioneer the smoking ban and now the licensing and display of tobacco products.  Retailers in Scotland and England will have to alter their displays accordingly and differently.  More open in England perhaps?

Alcohol is not taxed to the same extent but the sale of alcohol is different in England and Scotland in terms of time of sale and promotional possibilities.  So Majestic advertises cheaper prices in Scotland than England due to the operation of the promotion ban up here.

But the recent announcements on minimum pricing per unit of alcohol will mark another difference between the countries.  Scotland has promoted at least a 45p per unit proposal, whilst England last week suggested 40p.  In England, price promotional possibilities remain, though this may yet change.

Will such minimum pricing make much of a difference to you?  Well it depends on your tipple of choice.  Choose strong cider and it won’t be quite as cheap as you (perhaps) remember.  But that bottle of Ardbeg won’t be touched.  Cheap wine will take a hit but Jacob’s Creek, probably not (though if the alcohol level keeps rising who knows).

But from a retailer perspective we could have different prices in Scotland and England, for some products, unless the differential is closed.  And working against the best intentions of the Scottish government, alcohol over the border will be cheaper, possibly leading to a traffic jam of white vans hitting Carlisle and Berwick.  England – the cheap booze and open sale fags capital of the UK.  Scotland, not, and the government would argue for the better.

But it makes you think.  As the ‘costs’ on retailing become increasingly different between the (currently) constituent parts of the UK, how might retailers begin to react in investment and operational terms?  And where might it end?  And how will the governments react if it is shown that retailers are making additional profits from the new pricing policy? Unlike tax on cigarettes, the additional price on alcohol could go to the retailers – or maybe it is an argument for a permanent health levy on a wider range of businesses? The price of devolution could yet drive some retailers to drink.

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland's Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Education and Students and a Fellow of the Royal Society of Edinburgh
This entry was posted in Alcohol, Diet and Health, Government, Pricing, Promotion, Tax and tagged , , , , . Bookmark the permalink.

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