Plans to set a minimum price on alcohol for the first time in the UK have stalled because of difficulties over enforcing local law.

Legislation obliging licensees to sell alcohol for at least 50p per unit was put on hold on Friday by council leaders in Greater Manchester.

A draft bylaw would see wine cost a minimum of £5 a bottle, while two litres of strong cider would be £4.20 – triple its current price. Licensees who broke the law would face a £500 fine.

However, enforcement would lie with trading standards officers, who are already stretched. Councils also fear legal challenge.

Attempts by the Scottish National party to introduce minimum pricing north of the border have run into political opposition and fierce lobbying by retailers and drinks companies.

Cliff Morris, chairman of the Greater Manchester Health Commission, which co-ordinates health across the 3m population, said alcohol was one of the major factors causing poor health in the city, and the council were determined to tackle it.

However, he said: “There are a number of complex issues which require more investigation.

“In addition, there are several pieces of national legislation which could affect minimum unit pricing that are currently under review by the government.”

These include the Localism Bill, the Crime and Security Act, the Licensing Act review and the Treasury review of alcohol taxation and pricing.

David Cameron, prime minister, has said he is “sympathetic” to the cause of minimum prices on alcohol. The Treasury has agreed that alcohol should not be sold for less than the cost of production.

However, a new report by the Greater Manchester Health Commission found that the Treasury in effect defines the production cost as duty plus VAT – far short of 50p per unit.

Such an approach is backed by Wm Morrison, the supermarket, while Tesco favours a ban on “below cost selling”. Many retailers and drinks companies oppose minimum pricing as interference in the market, saying responsible consumers should not be penalised because of the actions of a minority.

The GMHC report made clear the social cost of excessive drinking, especially “pre-loading”, where people consume cheap shop-bought drink before going out. A 50p price would reduce alcohol-related hospital admissions and save the NHS in Greater Manchester £1.4bn per year.

Moves to introduce minimum prices build on a successful campaign in nearby Oldham, where the council used licensing laws to make it expensive to serve cheap drink. Despite the decision to put legislation on hold, Greater Manchester committed itself on Friday to heading a growing national grassroots campaign to force the government to legislate nationally.

Councils across Sussex discussed similar moves on Friday, while those on Merseyside and Warrington also have plans. Devon and Jersey have also asked Manchester for guidance.

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