A8. Alcohol Unit Reduction

“As part of action to reduce the number of people drinking above the guidelines, we have already signed up to a core commitment to “foster a culture of responsible drinking which will help people drink within guidelines”.

To support this we will remove 1bn units of alcohol sold annually from the market by Dec 2015 principally through improving consumer choice of lower alcohol products.”

The following provides background and supporting information to help organisations understand what this pledge sets out to achieve and how, by becoming a Responsibility Deal partner, you can help deliver this pledge.

What this pledge sets out to achieve and why it is important.

Alcohol consumption by adults (16+) in the UK currently runs at approximately 54 billion units per year[1].  Reducing this by 1bn units per year would equate to a drop in consumption of around 2%, which should have significant public health benefits.

Reducing the amount of alcohol that people consume, without necessarily changing the number of drinks that they purchase, has the benefit of both helping to reduce their chances of suffering an alcohol-related illness and also providing industry with a meaningful way to benefit public health without damaging the viability of their business.

Benefits to public health

Because much of the alcohol attributable harm occurs in middle or older age groups as a result of years of drinking above the lower-risk guidelines, even a relatively small reduction in the annual consumption of around 2% is likely to have a significant impact upon long-term and chronic illnesses.  In a decade, removing one billion units from sales is estimated to result in almost 1,000 fewer alcohol related deaths per year; many thousands of fewer hospital admissions and alcohol related crimes, as well as substantial savings to health services and crime costs each year.  These benefits rely on reduced unit sales being reflected in an equivalent reduction in alcohol consumption.

How you can deliver this pledge

Companies can implement this pledge in a number of ways depending upon their business model and the legislative and practical opportunities available to them.  Examples of action that could be taken to contribute to the target unit reduction include:

  • Producers of existing products could alter their production methods to reduce the alcohol content of their drinks.  Even small changes of 0.1% abv in a product that sells millions of units per annum can achieve significant reductions in terms of annual consumption.  Modern production methods and changes in consumer tastes can also help drive product alterations, for example the earlier harvesting of grapes or use of different yeasts during fermentation can produce reductions in alcohol content without noticably altering flavour and taste profiles.
  • Industry reports there is also a growing market in the UK for lower alcohol products, be it beers that are taking advantage of the new tax rates for those with less than 2.8% abv or the growth in mid-strength “lighter” wine products (around 5.5%abv).  Improving availability, better marketing and promotion of these products and the development of new products in this sector is intended to increase their market share (in the UK) at the expense of higher alcohol products, helping to achieve an overall reduction in the number of units sold without reducing the overall sale of Stock Keeping Units (SKUs).
  • Companies that retail alcoholic drinks can play a part by helping to ensure that lower alcohol products receive greater marketing and promotion in store.  This doesn’t have to mean the promotion of specially produced lower-alcohol products (such as the 2% beers or 5.5% wine products) it could also take the form of ensuring that house wines or those offered with meal deals are no more than 12% abv instead of 13% or 14%, that promotions of premium lager (5%abv +) are matched by promotions or regular lagers (circa 3%) or that promotions that include alcoholic drinks have an equivalent soft drink option.  It might also mean choosing lower strength products (such as 12% abv over 13% abv wines) when deciding what products to stock or order.
  • On-trade premises and producers could also offer and promote smaller measures, such as the new 2/3 pint “schooner” glass, or reduce the promotion of larger measures, such as the 250ml wine serving, make 175ml glasses the default serving size and increase use of the 125ml servings.  They might also change the default serving size or product container for higher strength products such as premium lagers by means such as incorporating a rule not to serve more than the lower-risk guidelines for regular drinking (3 units) in a single serving.

Rather than be prescriptive in the ways that businesses can support this pledge, companies should think about how they produce and sell products and consider whether small changes would help contribute to a much larger impact without damaging the commercial viability of their business.

Your pledge delivery plan

Shortly after signing up, partners will be asked to provide pledge delivery plans, laying out how they intend to meet each of the pledges they have signed up to.  They will have up to 500 words to describe their plans for each pledge they are signed up to.  All delivery plans will be published on this website.

Reporting progress on your pledge

Partners will be asked to report on their progress by the end of April each year.  For some pledges, partners will be asked to report using pre-defined quantitative measures, while for others they will be asked for a narrative update.  Further information on the reporting arrangements for each pledge is available.  All annual updates will be published on this website.

We are currently developing a web-based system that will allow partners to complete their delivery plans and annual updates online from 2013.

The annual update return should set out that action taken in the 12 month reporting period covered and clearly specify the start and end dates.

Where it is easy to do so, partners should quantify their company’s contribution towards reaching the 1bn unit reduction ambition as part of their annual reporting.  However, this will not be compulsory.  For example, producers that reduce the strength of an existing product could calculate the difference between the number of units sold after reformulation compared to how many units would have been sold if the change had not been made.

Where information is of a confidential nature and disclosure may damage their business, companies may wish to provide only an outline of the action that they are taking on the annual update form but supply more detailed information on a confidential basis directly to the Portman Group at CWilkie-Jones@portmangroup.org.uk

Information provided in this way would be made available only to the Alcohol Network’s monitoring and evaluation sub-group to evaluate progress towards the pledge and would not be made public, in order to protect the company’s commercial interests.

Achievement of the pledge will be measured on an industry-wide basis including using HMRC clearance data and sales data gathered by AC Neilsen market research company and overseen by the Portman Group and ultimately assessed by the Alcohol Network’s monitoring and evaluation sub-group.

This data will record industry-wide sales across a range of alcoholic strength bandings, and will be used to track how sales volumes change across different strength drinks, calculate industry-wide sales in terms of units and verify whether or not the market share of lower-alcohol products has increased.  This will help to gauge whether or not an increase in sales of new products has simply resulted in an increase in the total number of units of alcohol sold.

The Alcohol Network’s monitoring and evaluation sub-group will agree the methodology to be used to calculate a baseline for unit sales from March 2011 and agree a date from which the impact on health harms of new lower alcohol products will be measured.

For individual companies the criteria for success of the pledge will be:

  • Have companies delivered what they said they would in their delivery plans?

The success of the overall pledge requires industry achieving two objectives:

1)         An overall reduction in the annual numbers of units sold across the UK of at least 1 billion units

2)         That 1 billion units of the above reduction can be identified as resulting from actions taken as part of this pledge i.e. that consumers drink the same products but which now contain less alcohol by volume, consumers switch to lower alcohol products, the actions that companies take increases the market share of lower alcohol products at the expense of those with higher alcohol content and consumers switch to smaller measures.

Calculating contributions

Companies may want to quantify their contribution when completing their delivery plans and/or annual updates.  The contribution of reformulated brands will be assessed via the reduction in strength (abv) multiplied by the product’s annual sales at the time of reformulation and converted to units.

In relation to new lower-strength products, these will be measured by their annual sales volume in 2015 multiplied by the difference between their actual strength and the current category average strength (as at November 2011) with interim annual measurements, based upon annual sales at the point of assessment, to monitor progress up to 2015.

Currently any other activity in relation to supporting this pledge by promoting greater choice in lower-alcohol products [or moving to smaller servings] will not be measured directly in terms of an individual contribution towards removing one billion units.  Instead, companies should provide evidence of the impact of the specific actions undertaken and the Monitoring and Evaluation group would estimate their contribution towards helping to meet the 1bn unit reduction goal.

Examples of calculating contribution:

Current (provisional) average strengths (abv) to be used are Beer, 4.2%; Cider 5%; Wine 12.5%; RTDs, 4.5%.

A new 2.8%abv beer selling 500,000 litres p.a  by 2015 =(4.2-2.8)*500,000 = 700,000 units removed

Contribution of a new 9% wine selling 800,000 litres by 2015 =(12.5-9)*800,000 = 2,800,000 units removed

Reformulation of current cider brand currently selling 1,500,000 litres from 5.2%abv to 4.4% abv =
(5.2-4.4)*1,500,000 =1,200,000 units removed

Reformulation of current beer brand currently selling 10,000,000 litres from 5%abv to 4.7% abv =
(5-4.7)*10,000,000 = 3,000,000 units removed

It is recognised that for certain spirits there are complications regarding legal definitions which specify specific minimum strengths for named spirit drinks (e.g. to be called “whisky” one of the requirements that a drink must meet is to be at least 40% abv).  However, if brands are currently above these minimums then the same methodology as outlined above would apply to reformulations.  Innovative ideas for contributing to this pledge from the spirit drink industry are welcomed.

Partners signed up to this pledge.

[1] HMRC Alcohol Clearance Data, March 2011

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