SG opinion: Minimising MUP’s impact on stores

Tennent’s brand owner Norman Loughery offers insight on policy

C&C Group reckons most customers will spend as much on alcohol as before

THE UK Supreme Court’s decision to allow the introduction of a Minimum Unit Price for alcohol was a landmark day in the bid to tackle alcohol abuse in Scotland.

As a brewer in Scotland since 1556 and cider producer in Ireland since 1935, responsible drinking is a key priority of C&C Brands, which is why we have supported the introduction of Minimum Unit Pricing since proposals were first introduced by the SNP in 2011. We   also continue to support the introduction of Minimum Unit Pricing across other territories in which we operate, including Ireland and Northern Ireland

Whilst the majority of Scots enjoy alcohol responsibly, 25% of the population consume 71% of the alcohol. It is the availability of strong, cheap alcohol, and its correlation with harmful drinking that causes misery across Scotland. Alcohol-related deaths are 54% higher than in England and Wales, and are six times higher in our most deprived areas – where harmful drinkers consume 34% more than harmful drinkers across the rest of the country.

Awareness of MUP is lowest amongst the groups being targeted i.e. harmful drinkers on the lowest level of income.

Harmful drinkers in poverty are the group at greatest risk from their alcohol consumption and Minimum Unit Pricing specifically targets those in poverty, consuming alcohol to hazardous or harmful levels.

The introduction of Minimum Unit Pricing on 1 May is a time of uncertainty for smaller independent retailers and the convenience sector. C&C Brands has invested heavily in research to identify how the legislation will manifest itself at a behavioural level amongst consumers.

This leaves us best placed to work with our retail partners to minimise and mitigate the risks, as well as advising them on how to take advantage of the opportunities it presents.

Our research highlights the following:

Awareness of Minimum Unit Pricing is lowest amongst the groups being targeted i.e. harmful drinkers and those on the lowest levels of income. We are working with the Scottish Government, Scottish Grocers Federation and Scottish Wholesale Association to produce and distribute communications materials to educate and inform retailers and drinkers. However, we would also recommend that retailers have a quiet word with shoppers who are going to be affected.

Post the introduction of Minimum Unit Pricing, most shoppers are likely to spend the same amount on alcohol. Our research identifies the key price points that retailers should look to hit (£5, £10 and £15) and that packs crossing these thresholds will suffer disproportionate volume losses. This is likely to result in the removal of large packs, with small and midpacks becoming key to category sales.

Without the ability to promote harder than the market leaders, weaker brands are likely to lose out; we strongly recommend removing weaker lines, even if they are from well-known, national brands

Without price as a lever, focussing on what the consumer values is crucial. Scots prefer major brands, and selling these chilled, at key price points, will drive better perceived value. Chilled availability adds quality, improves service and reduces consumer input time. Retailers should therefore maximise chiller space to ensure chilled availability on the best-selling packs.

In March, we were delighted to host the Scottish Grocers Federation Study Day which welcomed around 60 retailers, producers and media to the Drygate Brewery in Glasgow.

As part of our commitment to educate and support the industry we presented our research setting out the implications and opportunities around the introduction of Minimum Unit Pricing.

A copy and recording of this presentation will be available on MyTennents, a new industry-leading digital support facility for Scotland’s retailers that will be rolled out during April and May.

MyTennents will also provide key assets and insights around business planning, merchandising, training and an overview of our award-winning drinks portfolio.

Norman Loughery is the off-trade sales director at C&C Brands, the firm behind Tennent’s and Magners.