A Minimum Unit Pricing (MUP) policy would impose a minimum retail price dependent upon the alcohol content of the drink. This increases the price of the cheapest alcohol, which is often preferred by the heaviest drinkers, making it a targeted tool for reducing alcohol-related harm. Crucially, it applies across all types of alcohol so that drinkers are not able to switch to cheaper alternatives. Long-established economic theoretical and empirical evidence has shown that increasing the price of alcohol will reduce demand for the product. The use of an MUP to reduce demand, and therefore alcohol-related harm, is a relatively recent policy tool compared to the long-established practice of influencing prices via excise taxes.
In 2020, DGMT commissioned the UCT Research Unit on the Economics of Excisable Products (REEP) department to conduct a study that would support the implementation of a MUP policy in South Africa. The study titled ‘Research and Drafting of Minimum Unit Price Implementation Guidelines for Western Cape Government Report’ was divided into two distinct but interrelated phases. Phase 1, modelled the impact of an MUP on alcohol consumption and alcohol-related harms, and reflected on the implementation experience of four countries who have implemented MUP.
Read the case study report here or by clicking on the cover image.
