How would you feel about having to raise the price of drinks in your establishment artificially high – and risk a drop in trade – in order to play your part in the fight against binge-drinking?
Labour MP, John Grogan poses a stark challenge to all retailers of alcohol in this this week’s edition of Caterer and Hotelkeeper: self-regulate over pricing or risk seeing the government legislate to control your prices. The chairman of the All-Party Parliamentary Beer Group and the pub trade’s voice in Parliament, Grogan explains that he believes hospitality – and in particular the pub companies – need to shed any siege mentality that exists and engage with the wider world over the issue of problem drinking in the UK.
Alcohol abuse looks set to be the government’s newest health battleground now that smoking legislation is in place. For a pub industry that has seen the smoking ban and the credit crunch hit profits and which is still reeling from the chancellor’s hike in alcohol taxes in this month’s budget, this spells potential danger.
The answer, according to Grogan, is what he calls a “coalition beyond the industry” that would see pub companies, off-trade retailers and health lobbing groups combining to achieve a mature, cross-sector response to alcohol abuse. The logical outcome of such a combination would be a move to set minimum prices per unit of alcohol. This may seem a counter-intuitive business model; but if it gains the ear of the government and keeps heavy-handed legislation at bay, it has to be worth consideration – notwithstanding the British Hospitality Association’s warning that any such proposal would need to be sense-checked to ensure it does not result in an anti-competitive price agreement.
Pubcos argue that they sell alcohol in a far more responsible and controlled environment than the supermarkets, with their BOGOF offers and slashed prices. But the fact is that the government cares less about internecine wars around the on- and off-trade and more about engendering a sensible drinking culture in the UK.
The pub trade has had two weeks to lick its wounds, reflect and recover from the chancellor’s decision to raise alcohol taxes by 6% this year and then by 2% above inflation for the next three years. Inside this week’s pages Grogan offers a path for the pubs to move forward in their relationship with the government. How far it moves forward is as much dependant on pubs willingness to be conciliatory as it is the government’s willingness to work with the pub trade.
What do you think? Are you happy to commit to a minimum price for alcohol? Or do you think you should reserve the right to offer booze as cheaply as you wish? Let me know.