Global Trends: A Measured Response?
By Fiona Briggs

New legislation designed to tackle alcohol misuse, by re­stricting how and when al­cohol is sold, is being intro­duced in Scotland. Proponents argue increased regulation is essential to combat problem drinking. Retailers claim the rules will hit small businesses disproportionately hard and question the rush for more controls.

It is against this backdrop that Scot­tish brewer BrewDog launched Nanny State, a low alcohol content — 1.1 percent — beer. The brewer introduced the ale to hit back at critics of its Tokyo* beer, launched a few weeks previously. With an alcoholic content of 18.2 percent, a bottle of Tokyo* equals six units of alco­hol (about 60 ml of pure alcohol) and twice the recommended daily limit.

The U.K. beverage industry watch­dog, the Portman Group and the Scot­tish Parliament, are making moves to ban the sale of Tokyo*. BrewDog, meanwhile, said it hoped critics would instead congratulate it on the launch of its 1.1 percent alcohol content Nanny State.

“If logic serves, the same people who witch-hunted us should now offer us heartfelt support and public congratulations. However, I fear that this, unfor­tunately, is an arena devoid of logic and reason,” says BrewDog founder, James Watt, on his blog.

A Costly New Relationship
Extreme responses from both sides are playing out in Scotland, where the new licensing laws governing the sale of alcohol and proposals for further regulation on alco­hol retailing are being hotly debated.

The Licensing (Scotland) Act 2005 was introduced in early September 2009. In addi­tion to banning irresponsible drink promotions in the coun­try’s pubs and clubs, the laws require retailers to have a sepa­rate display area for alcohol, which cannot be sold before 10 a.m. In addition, the act re­quires a designated manager on-site with a personal license to sell drinks.

More radical changes are be­ing put forward in the Alcohol Bill, planned for later this year in Scotland.

Fergus Ewing, community safety minister, said the mea­sures will change the way Scots think about alcohol. “This will play a part in rebalancing Scotland’s relationship with alcohol,” he said.

But retailers claim there is confusion over the new rules and argue that the government has done little to inform consumers of the changes. The Scottish Retail Consortium, the trade associa­tion of the Scottish retail sector, said it was still unclear whether the new rules restricted retail store promotions.

Ian Shearer, Scottish Retail Consor­tium director, said: “Current guidance implies the 2005 Act was not intended to apply to promotions in shops. Retailers plan their stocks months in advance and cannot face the chaos of disparities and unpredictability in the way different lo­cal licensing authorities apply the Act.”

Richard Dodd, head of media for the British Retail Consortium (BRC), agreed: “The original Licensing Act was not written clearly and seemed to suggest it would only apply to promo­tions in pubs and clubs.”

The BRC says retailers are also left to shoulder the burden of explaining the changes to customers. People across Scotland who regularly shop first thing in the morning will find they can no longer include alcohol in their shopping before 10 a.m.

In addition, the Scottish Grocers’ Federation claims the law has cost con­venience retailers more than £16 mil­lion ($23.4 million U.S.) applying for new licenses, re-training staff, creating separate display areas and changing opening hours. Botterills Convenience Stores, a third-generation business op­erating 52 Spar stores in Scotland’s central belt, says it has spent £125,000 ($183,100) in order to comply. Spar wholesaler CJ Lang adds that the Spar stores in Scotland have spent between £3 million ($4.4 million) and £4 million ($5.9 million) to bring its stores in line.

Back at the BRC, Dodd maintains that cost is important but it’s not the main issue. “It is a huge upheaval for re­tailers and causes a whole lot of extra expense and inconvenience for custom­ers by stopping access to promotions and purchasing before 10 a.m.”

Alcohol Regulation
The BRC is now focusing its efforts on influencing the Alcohol Bill, the follow up to the Licensing Act, which is cur­rently being drafted by the Scottish Government.

Key proposals of the bill include min­imum pricing, further bans on irre­sponsible promotions in supermarkets, raising the purchase age of alcohol from 18 to 21 years of age and introducing a levy on retailers to help fund the cost of dealing with problem drinking. Plans to pursue separate checkouts for alcohol sales or increase the age of staff working the checkouts have been put on hold.

The government hopes the measures will tackle alcohol misuse in Scottish society. Alcohol-related death rates in Scotland have doubled in the last 15 years and a recent report showed that in 2003, one in 20 of all deaths in Scotland were attributable to alcohol.

Scotland isn’t alone, however. Earlier this year, a survey by the University of the West of England revealed the extent of binge drinking among teenagers across Europe, with British youngsters among the worst offenders. Reports such as these highlight a need to uphold alco­hol regulation, according to Pam Erick­son, CEO of Public Action Management, a U.S.-based company that provides ex­pertise in public policy leadership.

Scotland Versus the U.S.
A former alcohol regulator in Oregon, Erickson has compared and contrasted the alcohol regulatory experiences in the United States and the U.K. should be regulated, and deregulation of alcohol has many dangerous and un­intended consequences for society at large,” she wrote. “The British public has something America does not want: an alcohol epidemic.”

Erickson attributes the gradual in­crease in deregulation of alcohol busi­ness measures in the United States to a lack of understanding about their val­ue. Recent changes involve permitting Sunday sales; converting “dry” juris­dictions to “wet”; allowing coupons, tastings and point-of-sale ads; and con­senting to sales of more types of alcohol in more retail outlets such as grocery and convenience stores.

Europe is the heaviest drinking re­gion in the world, said Erickson, and the U.K. has one of highest rates of per capi­ta consumption. “In the U.K., the prob­lem is the wide availability of cheap al­cohol as well as the lack of enforcement of the few regulatory tools that exist,” she said. “A free or deregulated market often creates an opportunity for large global retail corporations to seek market domination through offers of very cheap alcohol. The U.K. is a good example. Brazil is another one. Large grocery retailers make their money from use of mass-merchandising techniques.”

In the United States, a three-tiered system prevents the kind of domina­tion of markets that happens else­where, Erickson said. Many states pro­hibit ownership between the retail, wholesale and manufacturing sectors, making it harder to implement the mass-merchandising model.

“Many states also require a whole­saler to sell their product at the same price to all customers. This inhibits price wars among retailers. Some states also have laws that prohibit retailers from selling below cost, using coupons or other methods of volume discount­ing, and some states also have minimum mark-ups,” she continued.

Erickson maintains price and avail­ability are critical factors in alcohol control, along with alcohol promotion, and cites World Health Organization and British Medical Association (BMA) research evidence in her support.

Meanwhile, the BMA has called for a complete ban on alcohol advertising in the U.K., including sponsorship of sports events and music festivals by alcoholic beverage brands. In its “Under the Influ­ence” report, published in September 2009, the BMA says the £800 million ($1.2 billion) spent annually by the bev­erage industry to promote alcohol should be restricted to combat problems, in­cluding binge drinking by young people.

The report also called for further re­search into the sales practices of alcohol companies’ distributors and supermarkets and minimum price levels for alco­holic products.

Focus on Education
Back at the BRC, Dodd disagrees. “There is no link between price and availability of alcohol and irresponsible drinking. There is a problem with drinking and something needs to be done, but the right thing needs to be done — not restricting availability and promotions but educating and chang­ing peoples’ attitudes.”

Dodd highlights initiatives such as Challenge 25, which encourages anyone over 18, who looks under 25, to carry acceptable ID if they want to buy alcohol. He also credits “Know Your Limits” and “Drinkaware” campaigns, plus unit la­beling on retailers’ own private label al­cohol lines, as initiatives that would im­prove the U.K.’s drinking habits.

“A small minority drink too much and have a problem with alcohol but [government] should not rush to do the easiest thing that comes to mind. Re­tailers seek to offer value on all things they sell.

Overwhelmingly, people will buy alcohol in supermarkets as part of the weekly shop, take it home and con­sume it responsibly. If you set a minimum price for alcohol, you are just forc­ing those people to pay more and not tackling irresponsible drinking,” as­serted Dodd.

New research from Mintel, mean­while, shows the proportion of alcohol drinkers in the U.K. is decreasing, but adults are drinking more pure alcohol units (one unit equals 10 ml of pure alco­hol). “The challenge for government is to help drinkers consume fewer units for each drink they have,” said Jonny For­syth, senior drinks analyst at Mintel. “The success of recent reduced alcohol beer and lager lines is also significant for drinks manufacturers, suggesting there is growing appeal for drinking more sen­sibly across all types of drinks.”

Indeed, the latest Nielsen figures show sales of low alcohol drinks have increased by 11 percent in the last 12 months in the U.K., while the Wine and Spirit Trade Association is organizing a forum, involving retailers such as Tes­co, to consider the potential for low al­cohol wines to complement sensible drinking campaigns.

BrewDog may have — inadvertently — got the timing of its low-alcohol Nanny State ale just right.

Fiona Briggs is a retail business journal­ist from the U.K.