The chief medical officer’s proposals for a minimum price of 50p per unit of alcohol “merit some serious consideration,” the Institute for Fiscal Studies says.

For economists, the fact that excessive alcohol consumption has negative consequences not just for the drinker but also people around then suggests the problem is one that could be suitable for addressing through the control of prices. 

Evidence

There is also evidence that minimum alcohol prices can successfully target underage and binge drinkers who tend to drink cheaper forms of alcohol, senior research economist at the institute Andrew Leicester says.

They might also reverse the trend for more people to drink at home rather than in pubs.

Prime minister Gordon Brown criticised Sir Liam Donaldson’s proposal at the weekend, saying it would led to the “sensible majority” having to “pay more or suffer as a result of the excesses of a minority”. 

Tax increases

But in a study published this week, Mr Leicester pointed out the government was already raising the price of alcohol through tax increases: “Budget 2008 announced an increase in alcohol duties of 6 per cent above RPI inflation, with a further 2 per cent real increase in each year up to and including 2013. These tax increases will probably raise revenue for the government at a time when the public finances are particularly stretched, unlike a floor price where the transfers involved are more complex.” 

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