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Last Orders for Cheap Alcohol? New Minimum Unit Pricing comes into force

AUTHORs: Kate McKenna co-author(s): Simon Shinkwin, Kate Lenihan Services: EU, Competition & Regulatory DATE: 17/01/2022

Background

On 4 January 2022, Section 11 of the Public Health (Alcohol Act) 2018 on Minimum Unit Pricing (“MUP”) came into force, making Ireland one of a small number of countries to introduce minimum pricing on alcohol, following Scotland in 2018 and Wales in 2020. The measure is designed to reduce the harm caused by the misuse of alcohol and to delay the initiation of alcohol consumption by children and young people, by limiting the availability of cheap alcohol.

The measure was approved on 5 May 2021, and provides that a person who sells alcohol or promotes the sale of alcohol at a price that is below the minimum price for that product, shall be guilty of an offence which is punishable on conviction to a fine of up to €250,000 and/or imprisonment of up to 3 years.

Sectors affected

A minimum unit price of 10c per gram of alcohol sets a floor price below which alcohol cannot be sold and targets products that are cheap relative to their strength. The minimum price is directly proportionate to the amount of pure alcohol in a drink  

Most noticeable changes are expected to be seen on alcohol sold in supermarkets and off-licences rather than in pubs, restaurants and nightclubs and an average bottle of wine now cannot be sold for under €7.40, while a can of beer will cost at least €1.70.  Spirits will increase most in price, with vodka and gin set to cost a minimum of €20.70, while whiskey will rise to at least €22.  

Section 11 is limited to retail sales of alcohol and does not apply to wholesale sales. The holder of a wholesale spirit, beer or wine licence will therefore be able to sell alcohol below the minimum set price, provided the sale is in wholesale quantities.

Cross-Border Sales

Plans for an all-island approach had been considered but have been halted in Northern Ireland, leaving a discrepancy in alcohol pricing. Concerns have been raised by Sinn Féin and Retail Ireland regarding an increase in cross-border sales which could result in a loss of trade for businesses in the South. In particular, there is a concern that consumers crossing the border to purchase alcohol would also spend in other retail and hospitality outlets, which may further affect these sectors in the South.

These concerns have been addressed by the Minister of State at the Department of Health, who noted that whilst some consumers crossing the border to bulk-buy could reduce the efficacy of the measure, the positives of acting now would outweigh the negatives. In noting the urgency in addressing problems related to the misuse of alcohol in Ireland, he instanced the case of Scotland where in September 2019 it was estimated the deaths caused directly by alcohol had dropped by 21.5% since legislation was implemented there in May 2018.

For more information see the Public Health (Alcohol) Act 2018.

Please contact Kate McKenna and Simon Shinkwin if you would like to discuss.