Government "split" on national alcohol policy

The Government is divided over its alcohol strategy, with No. 10 "nervous" that raising the price of alcohol while inflation is soaring could prove politically unwise.

John Grogan, Labour MP and chairman of the all-party parliamentary beer group, said the Home Office and Department of Health both sympathise with the health lobby's view that a minimum price should be placed on alcohol.

But the MP for Selby, speaking to Harpers from the Labour Party Conference in Manchester, revealed there is "blanket opposition" to such a move elsewhere in Government, notably throughout John Hutton's Department for Business, Enterprise & Regulatory Reform (BERR).

The Government is "split down the middle", he added.

The cracks were highlighted during a fringe meeting in which consumer affairs minister Gareth Thomas, a parliamentary undersecretary at BERR, defended the right of supermarkets to run alcohol price promotions. "We have to allow competition," he said.

According to Grogan, however, difficulties with competition law are not the main obstacle to restricting the off-trade from using alcohol as a loss leader, at least as far as Downing Street is concerned.

"No.10 is nervous about the prospect of a minimum-pricing policy on alcohol. It fears raising the price of alcohol at a time when inflation is so high will be deeply unpopular," he said.

Grogan confirmed industry fears that extra regulation would loom if the Government's eventual strategy falls short of a minimum retail pricing policy. "If the Government shies away from enforcing a minimum price on alcohol sold in supermarkets, then expect more regulation to be imposed as a substitute to show that action is being taken," he warned.

That is the nightmare scenario for an industry already feeling the squeeze, said Rob Hayward, chief executive of the British Beer & Pub Association (BBPA).

As the BBPA prepares to campaign against Government plans to increase beer duty at a rate above inflation for the next four years, Hayward went to the conference to plead the industry's case.

"I described the severe effect of the current economic crisis on our industry, and told them any extra regulation imposed would worsen our problems," he said.

Consultation on Labour's alcohol strategy closes on October 14.

This article has been taken from this week's issue of Harpers magazine, which is available by subscription only. To subsribe to Harpers, please click here.

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