Before Scotland’s 50p Minimum Unit Price (MUP) for alcohol came into force in May 2018, one of the leading arguments against the policy was that it would be ‘a tax on the poor’ because it specifically targeted the price of the cheapest alcohol. With the Scottish Government’s announcement of their intention to increase the MUP from 50p to 65p per unit of alcohol, this argument has come back to the fore. This was highlighted by a recent intervention from the GMB union, who represent workers in the drinks industry, among others, which claimed that increasing the MUP “Punished low-income Scots”. I wrote a blog in 2017 looking at these arguments, so this seems like a good time to revisit this and see whether the introduction of MUP or the more recent cost-of-living crisis have changed things.
The argument against the charge that MUP is a ‘tax on the poor’ runs as follows: the burden of alcohol harm falls disproportionately on the most deprived groups in society, so if you want to reduce alcohol harms, the most effective route to achieve this is by reducing the drinking of heavier drinkers from more deprived groups. MUP increases the price of only the cheapest alcohol, which is disproportionately bought by heavier drinkers on lower incomes, but not to a substantial extent by moderate drinkers on lower incomes. As such, MUP effectively targets exactly the drinkers you want to target, without ‘penalising’ moderate drinkers on lower incomes.
Let’s take these points in turn and examine whether events since 2018 might have changed the picture:
Who bears the burden of alcohol harm in Scotland?
In a rare piece of good news, inequalities in alcohol-specific deaths in Scotland have actually fallen in recent decades, with the biggest falls in deaths in the most deprived groups in society. However, this is largely because alcohol harms were so unequally distributed to start with. In 2002, almost half of all deaths from alcohol-specific causes were in the most deprived 20% of the population. In 2022 it was less than a third. We also know that the introduction of MUP in 2018 has averted an estimated 156 deaths per year and the largest effects were found in the most deprived 40% of the population.
This is cause for some celebration, but we mustn’t be complacent – the health burden of alcohol still falls disproportionately on the most vulnerable in society. We have also seen an increase in this burden since the start of the COVID-19 pandemic, with alcohol-specific deaths rising by 25% since 2019. In recent modelling work we assessed the longer-term impact of changes in drinking during the pandemic on health. We estimated that these would lead to hundreds or even thousands of additional deaths over the next 20 years and that these increases would be greatest in the most deprived groups.
All of this shows that, whilst some progress has been made, the burden of alcohol harms in Scotland remains highly unequal, and any policy seeking to reduce alcohol harms will have to, by definition, target drinkers in the most deprived groups to be effective.
Who buys the cheap alcohol?
It remains true in the latest Scottish Health Survey data from 2022 that:
- People in the most deprived groups are more likely to abstain from alcohol entirely: 1 in 4 adults in the most deprived 20% of the population compared to fewer than 1 in 8 in the least deprived 20%.
- People in the most deprived groups who do drink are more likely to stick within the UK drinking guidelines of 14 units per week: 3 in 4 of drinkers in the most deprived 20% compared to 2 in 3 in the least deprived 20%.
If we look at the prices that people pay for alcohol and how this varies across different levels of income and alcohol consumption, it’s clear across all levels of drinking that people on lower incomes buy cheaper alcohol, on average. However, it is also clear that at all income levels, heavier drinkers buy cheaper alcohol, and that how much you drink is a better predictor of the prices you pay than your income.
Taken together this data highlights that raising the price of the cheapest alcohol, which increasing the MUP threshold will achieve, will affect the prices of products drunk by heavier drinkers across all income groups, but particularly those in lower socioeconomic groups who suffer the most alcohol-related harm. At the same time, moderate drinkers on lower incomes do not buy significant quantities of cheap alcohol, so will not see a large economic impact from an increase in the minimum price. Analysis of data from the Living Costs and Food Survey suggests that moderate drinkers from the lowest income quintile would see an average increase of 39p in their weekly alcohol spend if they continued to buy the same products after the MUP was increased to 65p/unit.
What about the cost-of-living crisis?
One argument being put forward by opponents of increasing the MUP threshold is that the cost-of-living crisis has increased the price of everything and squeezed household budgets, meaning that an increase in the price of alcohol will apply more pressure on top of this. The GMB have made this point by highlighting that household disposable incomes have only risen by 1.3% since the start of 2018, while an increase in the MUP threshold from 50p to 65p represents a 30% rise.
However, this is a misleading comparison. Disposable incomes have risen by 1.3% after adjusting for inflation. In contrast, the MUP threshold has not been adjusted for inflation, and is now 19% lower in real terms than when it was introduced – equivalent to the MUP being set at 40p in 2018 prices. If Scottish Government were to increase the MUP level in line with inflation alone, it would rise to 62p. If they were to increase it in line with disposable incomes (as the GMB appear to be suggesting), it would rise to 63p.
Even this doesn’t tell the full story. Although high levels of inflation have increased the prices of many goods and services since the start of 2021, alcohol prices have risen less than other goods. Of all food and drink categories, beer, wines and spirits have seen the lowest increases in average prices during the cost-of-living crisis. It also remains the case, in spite of these price increases, that alcohol is still readily available at 50p/unit in Scotland. This is most likely as alcohol retailers and producers have used price increases in more expensive brands to subsidise lower prices for the cheapest alcohol – something we have previously seen them do when taxes increase.
The upshot of this is that in spite of the cost-of-living crisis, alcohol has got more, not less, affordable in recent years. An increase in the MUP threshold to 65p will mean that consumers can afford to buy a similar amount of alcohol as when MUP was first introduced in 2018 and will not have a major impact on the budgets of moderate drinkers, even those on low incomes. Failing to adjust the MUP threshold for inflation would likely erode the positive impacts that MUP has had on health and the additional harms will fall disproportionately on the most deprived groups in society, increasing inequalities.
Written by Colin Angus, Senior Research Fellow at the Sheffield Alcohol Research Group within The School of Health and Related Research.
All IAS Blogposts are published with the permission of the author. The views expressed are solely the author’s own and do not necessarily represent the views of the Institute of Alcohol Studies.