Minimum alcohol price 'would boost retailers' profits'

Tesco, the UK's biggest supermarket, stands to reap the most rewards, according to the Institute for Fiscal Studies (IFS).

The think tank researched the likely impact of a 45p minimum unit price for alcohol – the controversial measure proposed by the Scottish Government but recently rejected by opposition parties.

IFS said such a policy would benefit retailers rather than the public purse, echoing an argument critics of minimum pricing have used against the measure.

The stores which sell the most alcohol – Tesco, Asda and Sainsbury's – stand to gain the most from the measure.

Researchers also said that in relative terms, the biggest beneficiaries would be the discount supermarket chains such as Lidl and Aldi which sell alcohol most cheaply.

Stores which do not sell much cheap alcohol – Waitrose and Marks & Spencer – stand to gain relatively little.

Researchers also suggested minimum pricing would have the greatest impact on households which consume the most alcohol.

The think tank proposes higher taxation, which mimics the impact of minimum pricing but generates revenue for the Government rather than retailers.

IFS senior research author Andrew Leicester said: "Minimum alcohol prices would transfer large sums from consumers to those firms that retail and produce alcohol, but may target households that consume the most alcohol more directly than increases in alcohol taxes.

"However, higher taxes would generate much needed revenue. The Government should seek to change European regulations on how alcohol taxes can be structured so that taxes can mimic the impact of minimum prices whilst ensuring the resulting revenues go to the Government and not firms."

European directives mean that although it is currently possible to tax the number of units for beer and spirits, it is not possible to do so for wine and cider.

The Scottish Government's bid to impose a 45p minimum unit price was rejected by Holyrood's Health Committee, which struck the measure from the Alcohol Bill earlier this month.

The Tories, Labour and the Liberal Democrats argued against the SNP policy, calling instead for a tax policy which would have to go to the UK Government at Westminster instead of Holyrood.

But Scottish Health Secretary Nicola Sturgeon now plans to reintroduce the measure in stage three of the Bill.

She said that in the first year of such a policy, there would be 50 fewer deaths, 1,200 fewer hospital admissions, 400 fewer violent crimes and millions of pounds saved in healthcare.

Police, doctors, alcohol awareness groups and some sections of the trade, including Tesco, back minimum pricing.