Sheffield Study Says Cutting Cheap Alcohol Sales Could Lift Britain’s Economy

A new study from the University of Sheffield suggests that cutting alcohol sales in British supermarkets and shops could help the economy rather than hurt it, adding fresh evidence to a long-running debate over alcohol taxes, minimum pricing and the role of cheap imported wine in the United Kingdom.

The research, published in the journal Addiction by the Sheffield Addictions Research Group, uses an input-output model of the British economy to estimate what happens when consumers spend less on unhealthy products and redirect that money to other goods and services. The model is based on data from the Office for National Statistics and looks at how spending moves through sectors that differ in tax levels, labor intensity and reliance on imports.

The study’s central finding is that the economic effect depends heavily on where alcohol is sold. A 10% cut in spending on alcohol bought in supermarkets and shops, known as off-trade alcohol, was estimated to increase gross value added by £2.543 billion. By contrast, a 10% cut in spending in pubs and restaurants, or on-trade alcohol, was estimated to reduce gross value added by £2.677 billion.

That split matters because most wine sold in British supermarkets is imported, while pubs and restaurants rely more on domestic labor and supply chains. In the off-trade, the researchers said, a large share of the retail price goes to taxes and overseas producers rather than to British workers or businesses. In the on-trade, more of each pound spent stays in the domestic economy through wages, services and local purchasing.

The findings give new support to policies such as Minimum Unit Pricing, which is designed to raise the price of very cheap alcohol sold in shops. Public health advocates have long argued that such measures reduce harmful drinking. Industry groups have often countered that they damage jobs and growth. The new study argues that this claim is too broad and misses how consumer spending shifts across the economy.

The researchers found that if just 1% of spending saved from off-trade alcohol were redirected to other goods and services, the net effect on gross value added would be neutral. They said even a partial shift of spending away from cheap alcohol could produce a net gain for the economy if households spend some of the savings elsewhere.

The study also points to a broader policy distinction between cheap supermarket alcohol and drinks sold in pubs. Recent changes to alcohol excise duty in Britain introduced separate relief rates for beer and cider sold on tap, giving policymakers more room to target duty increases at off-trade products rather than hospitality venues.

The authors said their model likely understates the full economic benefit of reducing alcohol harm because it does not include gains from better health, higher productivity or fewer lost workdays. Alcohol-related illness already costs England billions each year through absenteeism, reduced productivity while at work, early death and people leaving the labor force because of poor health.

For wine importers and retailers, the study adds pressure to a market already shaped by duty changes, inflation and tighter public health scrutiny. Cheap wine sold in supermarkets remains one of the clearest examples of how imported alcohol can be both heavily taxed and economically weak in terms of domestic value added, even as it remains widely consumed across Britain.