Retail Drinks criticises ‘inconclusive and inadequate’ MUP report

30 April, 2020 by Brydie Allen

The Northern Territory Government has released an independent report that it had commissioned to provide an interim evaluation of the effectiveness of Minimum Unit Pricing (MUP) in the state. 

The evaluation in the report claims the introduction of MUP legislation is associated with positive societal change across the NT, including a reduction of alcohol sales per capita, a decline in alcohol related assaults and incidents. 

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However, Retail Drinks has criticised the report and these claims, labelling it “inconclusive and inadequate.” CEO Julie Ryan said it is astonishing that the NT Government has released a report where the authors conclude that it is not possible to isolate the impact of MUP from pre-existing trends and other harm minimisation policies.

“By its own qualifications, which are of course buried in a footnote, the authors acknowledge that ‘the independent impact of MUP was impossible to distinguish.’ This was due to the already declining trends of various alcohol related harm measures relied upon to call MUP a success, combined with the fact that MUP was introduced at the same time as a significant number of other policy measures,” Ryan said.

“We really have to ask the question how a report can form a conclusion that MUP was successful, when by its own admission, it cannot separate out the impact of MUP from other alcohol-related policies.” 

Also of concern to Retail Drinks, was inaccurate summaries of NT alcohol sales included in the report, which they say raise questions about the validity of conclusions drawn in relation to per capita consumption changes. The data about wholesale alcohol sales that the authors of the report relied on, has not been publicly released and wouldn’t be until September. So Retail Drinks independently sourced the numbers. 

“We can now conclusively state that, on review of this wholesale data, there has been a significant increase in spirits sold in the NT, as well as a significant increase in bottled wine since the introduction of the floor price,” Ryan said.

“However, the MUP report says the exact opposite, that these categories declined.”

One of the intentions behind introducing a MUP, according to the report, was to “minimise the harms associated with high-alcohol, low-cost alcoholic beverages” by targeting problematic and heavy drinkers, while having a minimal impact on moderate consumers. However, Retail Drinks said the findings of the report only point to the MUP’s flaws in attempting to target these heavier consumers. 

“We know that problem drinkers are the least price elastic, in other words, the least likely to change their behaviour in relation to a change in price. When MUP was first introduced, we issued a strong warning that substituting other products, both alcohol and other substances of intoxication, would occur, which has been supported by the Frontier Economics’ Report,” Ryan said.

“According to the 12 months of sales data analysed after MUP was introduced, there was an almost 50 per cent reduction in cask wine sales but significant increases were recorded across every other alcohol category, including 15 per cent growth in spirits.

“This is consistent with the MUP experience in Scotland, introduced a few months before the NT, where Nielsen scan data of retail sales revealed that Scottish drinkers bought more than 25 million additional units of alcohol compared with the corresponding period the year before.” 

Further, Retail Drinks said there are inaccuracies about the report’s claims that MUP legislation had been relatively easy by businesses without being financially impacted.

“The implementation of the floor price legislation has cost liquor retailers millions of dollars in one-time cost to adjust their systems, and significant further costs remain ongoing. The floor price was also introduced at a time of significant economic downturn in the Territory when all businesses, especially retail, have reported poor performance,” Ryan said.

“It is simply not plausible to reach a conclusion that business has not been impacted, and we can confirm our members, who represent the majority of the liquor retailers in the NT who actually have to implement this legislation, do not have that sentiment.”

Because of these questions around the accuracy of the report, Retail Drinks has called for more time, further analysis through different methodologies and an independent inquiry to properly evaluate MUP.

“Given that MUP in the NT has only been in place for slightly over 18 months, it is still far too early to tell the full impact on long-term consumer behaviour, particularly that of problem drinkers which it was intended to target,” Ryan said.

“We are not confident that any methodology exists which can properly isolate the impacts of the MUP on alcohol related harm, when over 200 policy measures were implemented in the NT at the same time… Given that this report has been funded by NT taxpayers, there is an obligation to ensure that the authors have completed a thorough and unbiased evaluation of MUP.”

“If the report’s authors have made claims about MUP which are misleading then an independent inquiry is the only way to get to the bottom of these discrepancies.”