Alcohol (Minimum Pricing)

Greg Mulholland Excerpts

Wednesday 2nd February 2011 Westminster Hall

[Greg Mulholland (Leeds North West) (LD)]

I thank both Front Benchers for their generosity.

I shall try to keep my comments brief. I congratulate the hon. Member for Blaenau Gwent (Nick Smith) on securing this important and timely debate, after the Government’s recent welcome announcement. I speak today as chair of the all-party save the pub group. I am not sure whether the hon. Gentleman is a member, but if he is not, we would certainly be delighted to have him, particularly now that we know he is from a publican family.

I welcome the Government’s announcement, which is in itself a significant step that should be recognised. This debate has gone on for a long time, and I am pleased that the Government have acted quickly in the first year of this parliamentary term. Having said that, there are frustrations that my hon. Friend the Member for Burton (Andrew Griffiths) and I have expressed, both privately and publicly. I echo my hon. Friend’s comments about the Minister having being generous with his time and having sought to listen to people with an interest in pubs, and many others. He is right to do so, because that is a good way to make policy. However, I share the frustration, as do the majority of the all-party group members, that what the Government have done has not stopped below-cost selling. I want to make it absolutely clear that I do not support per unit minimum pricing. That is where the difference of opinion lies, and that is the challenge facing the Government.

Minimum pricing is not the way to solve the problems. As a Front-Bench Liberal Democrat health spokesperson, I said in a debate that minimum pricing is only part of the solution to two problems. The first is alcohol abuse, and it is important that we concentrate on “alcohol abuse” rather than on rather arbitrary terms such as “binge drinking,” because some of the definitions are confusing. We are talking about problem drinking, which is drinking that leads to health problems, antisocial behaviour or crime, and that is what we all, as policy makers, should concentrate on.

The second problem is the situation facing pubs and the huge discrepancy that has developed over the past few years. We have to accept that minimum pricing is not a silver bullet to solve either of those problems, but I have heard people both inside and outside this House suggest that it is. Such problems are not solved so simply. Year-on-year duty increases, particularly on beer, have done nothing whatsoever to stop the problems and, in fact, as the duty has increased the culture of alcohol-fuelled antisocial behaviour has got worse.

I highlight to the Minister, because I know that he is interested in the issue, that there is a conversation that he needs to have with his colleagues in the Treasury. May I make a plea? We do not want another duty rise in the forthcoming Budget, because it will damage pubs further. The hon. Member for Blaenau Gwent was absolutely right that well-run pubs and working men’s clubs that serve as hubs for their communities not only provide regulated, controlled places for people to enjoy alcohol responsibly in a supervised atmosphere but create a different culture of enjoying alcohol in a community setting, generally with people of all ages. That leads to a different approach to alcohol and prevents some of the problems identified by the Select Committee Chair, the right hon. Member for Leicester East (Keith Vaz), including pre-loading and under-age drinking in parks and unsupervised settings such as houses where parents are out, which is where many problems occur.

The duty question is more interesting still. Who pays duty? It is not the supermarkets. That is one of the huge flaws in the argument for a rise in duty. Duty is paid by manufacturers and producers, which includes not only Coors in Burton but WharfeBank Brewery in my constituency. Breweries must pay duty on the 20th day of the month of invoice. It is a considerable payment for some of them, but when supermarkets buy beer from breweries, including small breweries on tight margins, they do not pay them for months, often for three months and sometimes longer. As usual, supermarkets exploit their dominant market share.

[Andrew Griffiths]

The hon. Gentleman is absolutely right. Coors, a fine brewer in my constituency, has extended the terms on which it pays its suppliers from 30 days to 90 days. It is having a considerable impact, particularly on small businesses.

[Greg Mulholland]

My hon. Friend makes a good point.

Why would supermarkets not welcome either a genuine ban on below-cost selling, which I support, or a minimum price per unit, which other hon. Members support? Those approaches would increase their revenue, but they sell cheap alcohol for other reasons. Let us face it: supermarkets have virtually destroyed the stand-alone off-licence trade in this country. Names such as Threshers disappeared some time ago. We must remember that pubs, working men’s clubs, stand-alone off-licences and corner shops cannot sell alcohol below cost, because they rely on a reasonable margin on alcohol for their profits. There is something more sinister going on. Below-cost selling is a way to attract people into stores and maintain supermarkets’ power over manufacturers, some of which, unlike Coors, are too small to argue. That situation is causing a problem.

I accept that the issue is difficult, but we must come up with a definition of below-cost selling that includes the cost of production. I realise that we are on the first step, and I accept that the issue is difficult to define, but to say that below-cost selling simply involves tax suggests that supermarkets buy alcohol for nothing. They might take a long time to pay, but they clearly pay something. The price that they pay is often unreasonable, exactly as it is for the milk that they purchase from dairy farmers, but there is nevertheless a price. It cannot be impossible to include in the equation the price that the supermarkets must pay. That is the challenge, and I look forward to working with the Minister on it over time.

I accept some of the concerns aired by the hon. Member for Christchurch (Mr Chope). This is not about social engineering, moralising or saying that we should not sometimes welcome a reasonable deal and the chance to get a couple of pounds off a bottle of wine in a supermarket. Indeed, many people are concerned that if we set a high minimum price, that chance would disappear. There would also be other unintended consequences. For example, apart from increasing supermarket revenues, which is surely perverse, it could have the surprising effect of pushing up the price of a bottle of wine that currently costs £3.50 and is not worth more than that, and making good bottles of wine more expensive, which is not what any of us want. People should be allowed to enjoy alcohol sensibly without sudden unacceptable inflationary pressures.

I am concerned to stop the irresponsible selling of alcohol, which I am glad to say has been largely stamped out in the on trade but is, sadly, still alive and well, particularly in supermarkets. The Government have made a good start, but they can go further. I know that the Minister is listening, and I look forward to working with him and his team to close the unacceptable gap that has done so much damage to pubs, which are part of the solution to problem drinking, and to do something—we must recognise that it is only something—to deal with the problems associated with alcohol abuse that other hon. Members have rightly discussed.