The economic impact of Minimum Unit Pricing on Scotland’s alcoholic drinks industry

Frontier’s research, commissioned by Public Health Scotland, into the impacts of the Minimum Unit Alcohol Pricing (MUP) on the alcoholic drinks industry in Scotland has been published today.

In 2012, the Scottish Government passed the Alcohol (Minimum Pricing) (Scotland) Act 2012 to allow the implementation of MUP for all alcoholic drinks retailed in Scotland. As part of a wider evaluation of MUP, Public Health Scotland commissioned Frontier Economics to evaluate the economic impact of MUP on producers and retailers of alcoholic drinks in Scotland. This report provides findings from the final evaluation, following a Baseline and Initial Impacts Report by Frontier published in 2019.

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. This was based on five key metrics of industry performance: the number of firms, employment, turnover, output value and Gross Value Added (GVA). 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.

Key findings in the report include:

  • No strong evidence of observable impacts on any of the key metrics for any sub-sectors of the industry based on the quantitative analysis was found.
  • In general, pre-MUP trends in industry data in Scotland were maintained post-MUP. Post-MUP trends also tended to be similar in England and Wales, where comparisons could sensibly be made.
  • There is evidence from other studies that overall revenues from the sale of alcoholic drinks in Scotland in the off-trade (supermarkets, grocery and specialist retailers) increased post-MUP, but the impact on overall revenues and profits is not clear.
  • Quantitative analysis was hindered by Covid-19, which had a strong impact on industry performance from 2020 onwards and also affected the quality and consistency of some of the data available.
  • MUP appears to be consistent with and potentially accelerating other drivers of performance such as a perceived ‘premiumisation’ of consumer preferences towards branded and more expensive products.
  • The impacts of MUP on consumer and producer responses were perceived to ‘play out’ quickly. The major changes had already taken place by the time of the Baseline and Initial Impacts Report in the first half of 2019, and the industry had ‘moved on’ since then with MUP largely not a day-to-day concern. 

Frontier obtained and analysed measures of key industry performance metrics of interest for the evaluation from official business statistics. These were supplemented with qualitative evidence from industry case studies asking about perceived impacts of MUP both on these metrics, and intermediate pathways to any impacts related to the underlying theory of change. Our findings are also informed by wider desk research and industry interviews.

Please click here to read the full report.

Frontier regularly works with public and private sector clients on issues related to public health and wider public policy. For more information, please contact or call +44 (0) 20 7031 7000.