They’ll be Dancing in the Streets of Berwick

The SNP Government, in the form of Nicola Sturgeon, has announced today that the minimum price per unit of alcohol will be 50p in Scotland. With most party support and the inbuilt majority in any case, this will soon become law. The rest of the UK has still to follow this lead, though this may be on the way, with rumours abounding that it will be 40p in England at least.

Leaving aside the merits or otherwise of this policy, there are a number of retail issues  raised:

  • If the price per unit is 50p in Scotland and 40p in England, just how well might shops in the English Borders do out of exploiting the difference? After all if there are 14 units in a bottle of wine then the difference will be £1.40 or £16.80 per case of wine.
  • For major retailers able to use their internet operations based in England, how much of their sales will be diverted from Scottish stores to the web?
  • How will retailers (for some of their products) have to adjust their advertising for Scotland, or abandon aspects of price advertising all together?
  • Who will get to keep the “windfall” benefit of the forced increase in prices and revenue for some products? Will the Scottish government be tempted to link this to the “health levy” on large retail stores? But where does this leave the local off-licence?
  • How many small retailers given the challenge to their alcohol and cigarette businesses simply say enough is enough?

The prediction in the research from Sheffield University is that there will be an average 5.5% reduction in sales, but the proof of this will be seen over the coming years. Who knows how consumers, retailers and producers (low alcohol wine is already emerging) will respond to the changed circumstances.

The issue of cross border trade also appeared in the papers over the weekend with a piece in Scotland on Sunday on the way in which tourists have been spending in Edinburgh. The article claimed that there had a been a surge in duty-free spending in the capital and that this was fuelled by visitors from the BRIC (Brazil, Russia, India, China) countries.

The supporting data did not quite bear this out, but the underlying point – that visitors are vital to the Scottish retail economy – is surely a sound one. The highest spenders were the Thais, with Taiwanese showing the highest growth. The Americans declined the most in the figures quoted.

All this shows that having a vibrant and diverse retail economy is good for Scotland and for its cities and towns and is an important part of the visitor attraction of the country. Making sure visitors can find what they want at prices they can afford is critical. It is good that the minimum alcohol price shouldn’t affect the tourist purchasing of Scotch.

And finally …

What about the tweet I was forwarded to me the other day? From Nicola Sturgeon: “Sequel to Hilary Mantel’s Booker prize-winning ‘Wolf Hall’ arrived from Amazon. 1st non-kindle book I’ve bought in wks! Looking 4ward 2 it.”

Support your local high street and book shop Nicola, and no buying wine over the internet to avoid the price increase (Ever so slightly tongue in cheek on my part given my use of Amazon to feed my retail book habit, and I currently remain a Kindle-refuser).

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 Internationalisation and Graduate Studies.
This entry was posted in Alcohol, Books, Diet and Health, Government, Internet shopping, Pricing, Regulation, Tourism and tagged , , , . Bookmark the permalink.

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