The economic performance of the alcoholic drinks industry in Scotland has not been significantly impacted by the introduction of Minimum Unit Pricing (MUP), according to a report published by Public Health Scotland.
The research measured industry performance using five key metrics – the number of firms, employment, turnover, output value, and Gross Value Added – and while they have shown minimal impacts, “this doesn’t mean that MUP has had no effect at all on the industry”.
The research, commissioned by Public Health Scotland and carried out by Frontier Economics, suggests that industry performance post-MUP was characterised by lower volumes of sales but higher prices. This is consistent with other studies which suggest the value of spending on alcoholic drinks in the off-trade rose more quickly in Scotland post-MUP than in England and Wales.
Interviews carried out across the industry found that the impacts of MUP on consumer and producer responses were perceived to ‘play out’ quickly. Almost all case studies felt that the major changes had already taken place by the first half of 2019, and that industry had ‘moved on’ since then with MUP largely not a day-to-day concern.
While some economic trends changed post MUP there was no compelling evidence that these were caused by MUP.
Andrew Leicester, Associate Director at Frontier Economics and lead researcher, said: “Our analysis of detailed quantitative data broken down by country and sub-sector of the alcoholic drinks industry does not find compelling evidence of observable impacts of MUP on industry performance in the years immediately following its introduction.
“Case study interviews from across different parts of the industry largely validate this view, recognising that MUP clearly did affect the behaviour of producers and retailers to adapt rapidly to new limits on pricing but not in ways that appear to have significantly affected overall industry performance in the medium-run.”
