Special edition: Pricing social responsibility

Responsibility not cost dependant – spirit makers

By Neil Merrett

- Last updated on GMT

Related tags: Alcoholic beverage

In the first of a two-part series, BeverageDaily.com looks at the issue of pricing on alcoholic beverages, both as a tool for social responsibility drives designed to curb alcohol use, and in ensuring financial success for manufacturers.

Some European spirits groups say they will not encourage or promote heavy consumption of their goods to bolster sales, despite current uncertainty over how they may be impacted by the credit crunch.

Industry body the European Spirits Association (CEPS) claimed that the potential negative impact of a recession on the industry would not drive their members to forgo existing social responsibility initiatives on sales and promotions.

The European Commission has stepped up its efforts over the last year to reduce excessive alcohol consumption, with financial focuses such as taxing and other price initiatives providing one potential area of attack for the focus.

However, some leading on-trade retailers such as UK nightclub operator Luminar last week suggested that it may turn to re-establish discounting to better compete with prices at on-trade outlets like supermarkets and off licenses.

Spirit maker commitments

A CEPS spokesperson told BeverageDaily.com that it was uncertain how the current financial crisis that has engulfed some of the world’s leading banks would affect drink makers, but that they were committed to social responsibility.

Although pricing is not part of the association’s charter for discouraging alcohol abuse, the group said it would not turn to strategies that may contravene the overall focus such as irresponsible promotion.

“The European spirits industry's far-reaching social responsibility commitments, as adopted in the 2005 CEPS Charter on Responsible Alcohol Consumption, will not be reassessed in any way,” ​said the spokesperson. “The industry takes its responsibility commitments extremely seriously, for us this is not just a window-dressing exercise to be abandoned at first signs of an economic slump."

Pricing concerns

Debate has continued to rage on the impact that alcohol pricing has on levels of irresponsible drinking in the bloc, which has become a major concern for health groups, both in the EU and worldwide.

Some health experts remain sceptical over the success of self-regulation from both retailers and manufacturers, with recent findings by UK-based charity Alcohol Concern adding to calls for tighter restrictions on how drink groups sell their products.

In similar reactions, UK politician Nick Clegg said that his political party, the Liberal Democrats, were themselves keen to introduce a minimum pricing scheme on alcohol products as part of their manifesto.

Price issues

The Portman group, an industry led UK-based social responsibility body, said that its mandate did not currently focus on the pricing policies of its members, but on how they were advertising and branding goods in the eyes of consumers.

However, Michael Thompson, head of communications for the group, said that the group did recognise public concern over the money being paid for alcohol and the potential impact on irresponsible drinking.

Thompson suggested that the Portman Group policy on pricing was unlikely to change though before publication of ongoing research from Sheffield University,​England, as to how alcohol prices affected drinking behaviour.

He added that depending on the findings of the study, the organisation may the review its stance, but did not believe it was as key to curbing responsible drinking as other focuses.

“We are not convinced that price is a major factor in encouraging irresponsible drinking,”​ Thompson stated.

The next article in this series can be found here​.

Related topics: Alcohol Regulation

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