News
Plans for a public health levy on supermarkets
23/09/2011
Source - The Herald 22/09/2011
Consumers are facing a double price hike after Finance Secretary John Swinney revealed plans for a public health levy on supermarkets and other big stores which sell both alcohol and tobacco.
As well as angering retailers, he also infuriated public-sector workers by continuing their pay freeze, and was accused of an “unhelpful level of spin” by council leaders.
Their reaction followed Mr Swinney’s announcement of his Draft Budget and Spending Review yesterday, which he claimed would “equip Scotland for the challenges that lie ahead”.
He tied the supermarket levy to public health, telling MSPs he wanted to increase revenue for preventative spending. However, on top of Government plans to introduce minimum pricing for alcohol, the new tax means customers are likely to face even higher charges for their drinks.
Mr Swinney said Scotland’s health and social problems associated with alcohol and tobacco were well- documented and created additional burdens on policing, local authorities and the NHS. “As such, I propose that the business rates paid by large retailers of both tobacco and alcohol will be increased by a supplement from April 1,” he said. He believes the tax, which will have to be paid by stores that have a rateable value of £300,000, will raise £110 million over the next three years.
Scottish Retail Consortium director Ian Shearer claimed it was “a blatant fund-raising exercise which is illogical and discriminatory”.
He said: “Supermarket margins are already cut to the bone as stores compete to offer the best deals to cash-strapped consumers.
“The UK already has some of the highest alcohol taxes in Europe. This tax would make it harder for food retailers to keep prices down for customers, and makes Scotland a less attractive place to do business, invest and create jobs.”
Wine and Spirit Trade Association chief executive Jeremy Beadles said the tax on large retailers would place “an additional burden on Scottish businesses and push the price up for all consumers regardless of whether they consume alcohol at all”.
Richard Taylor, director of corporate affairs at Morrisons, said: “We believe that any tax that targets retailers in this way will hinder our attempt to provide value for money for our customers, and alcohol and tobacco are already two of the highest-taxed products.
“The Scottish Government failed to introduce a levy on all large retailers and now they appear to be narrowing their sights on supermarkets, which is not in the interests of customers, at a time when the economy is in the doldrums.”
However, the move was welcomed as “a reasonable measure” by Scottish Health Action on Alcohol Problems.
Chairman Dr Bruce Ritson, who is also vice-president of the Medical Council on Alcohol, said: “In terms of alcohol sales, more than 80% from the off-trade is bought from the major supermarkets and there are subsequent problems associated with drains on the national economy and health from alcohol.”
Evelyn Gillan, chief executive of Alcohol Focus Scotland, added: “The big retailers make large sums of money from the sale of cheap alcohol so it’s a positive that some now goes back into the public purse.”
The chief executive of anti-smoking group ASH Scotland, Sheila Duffy, said: “It’s good to see the Scottish Government recognising and committing to the importance of preventative spending. Prevention is better than cure.”
Earlier this year, Mr Swinney had to abandon plans to introduce a tax on large supermarkets after Labour, the LibDems and the Tories branded it anti-competitive and voted it down.
Consumers are facing a double price hike after Finance Secretary John Swinney revealed plans for a public health levy on supermarkets and other big stores which sell both alcohol and tobacco.
As well as angering retailers, he also infuriated public-sector workers by continuing their pay freeze, and was accused of an “unhelpful level of spin” by council leaders.
Their reaction followed Mr Swinney’s announcement of his Draft Budget and Spending Review yesterday, which he claimed would “equip Scotland for the challenges that lie ahead”.
He tied the supermarket levy to public health, telling MSPs he wanted to increase revenue for preventative spending. However, on top of Government plans to introduce minimum pricing for alcohol, the new tax means customers are likely to face even higher charges for their drinks.
Mr Swinney said Scotland’s health and social problems associated with alcohol and tobacco were well- documented and created additional burdens on policing, local authorities and the NHS. “As such, I propose that the business rates paid by large retailers of both tobacco and alcohol will be increased by a supplement from April 1,” he said. He believes the tax, which will have to be paid by stores that have a rateable value of £300,000, will raise £110 million over the next three years.
Scottish Retail Consortium director Ian Shearer claimed it was “a blatant fund-raising exercise which is illogical and discriminatory”.
He said: “Supermarket margins are already cut to the bone as stores compete to offer the best deals to cash-strapped consumers.
“The UK already has some of the highest alcohol taxes in Europe. This tax would make it harder for food retailers to keep prices down for customers, and makes Scotland a less attractive place to do business, invest and create jobs.”
Wine and Spirit Trade Association chief executive Jeremy Beadles said the tax on large retailers would place “an additional burden on Scottish businesses and push the price up for all consumers regardless of whether they consume alcohol at all”.
Richard Taylor, director of corporate affairs at Morrisons, said: “We believe that any tax that targets retailers in this way will hinder our attempt to provide value for money for our customers, and alcohol and tobacco are already two of the highest-taxed products.
“The Scottish Government failed to introduce a levy on all large retailers and now they appear to be narrowing their sights on supermarkets, which is not in the interests of customers, at a time when the economy is in the doldrums.”
However, the move was welcomed as “a reasonable measure” by Scottish Health Action on Alcohol Problems.
Chairman Dr Bruce Ritson, who is also vice-president of the Medical Council on Alcohol, said: “In terms of alcohol sales, more than 80% from the off-trade is bought from the major supermarkets and there are subsequent problems associated with drains on the national economy and health from alcohol.”
Evelyn Gillan, chief executive of Alcohol Focus Scotland, added: “The big retailers make large sums of money from the sale of cheap alcohol so it’s a positive that some now goes back into the public purse.”
The chief executive of anti-smoking group ASH Scotland, Sheila Duffy, said: “It’s good to see the Scottish Government recognising and committing to the importance of preventative spending. Prevention is better than cure.”
Earlier this year, Mr Swinney had to abandon plans to introduce a tax on large supermarkets after Labour, the LibDems and the Tories branded it anti-competitive and voted it down.