Friday 23 March 2012

Alcohol unit pricing sillyness

OK, so my commitment to this Government ended sometime ago, but really, alcohol unit pricing...some quick thoughts as a very busy day for me:

1 - Drinking is falling, has fallen straight through the recession for a number of years now.

2 - The Dutch tried this idea, it gets banned by the EU Courts eventually anyway

3 - 'It's a free Country' - are things not bad enough in the Country that we can;t think of even more stupid nanny state ways to interfere with people's lives?

4 - Together with excessive alcohol duties, this measure further pushes up inflation

So really, it's an illiberal, ill-thought out, economically damaging and unworkable idea.

How did this get through the civil service? I really hope ti is just a kite flying expedition to get the budget of the Newspapers' front covers.


Old BE said...

Correct on all counts. What worries me is that it is being kite flown by a government that pretends it is "liberal" and "conservative".

We were promised something radically different from New Labour. We seem to have changed the personalities without changing the policies.

I can't think of a single good argument in favour of minimum pricing.

Phil said...

Let me put the other side:

Alcohol is one of those things that people are very aware of the price, like other stable goods (milk, bread). Supermarkets are very aware that they have to be competitive on price for these staples, sometimes even pricing them below their input cost because they know that people will compare the prices of staple goods that they buy every time.

Hence, supermarkets are locked in a race to the bottom on alcohol pricing by the market which it is impossible for them to get out of.

The costs of heavy drinking to the country are very large: alcohol is a poison (don't deny it!), causing both prompt costs (injuries etc) and long term damage (heart, liver, diabetes etc etc) all of which is very expensive to treat.

Putting a minimum cost on units of alcohol raises the cost of private heavy drinking, whilst barely affecting social drinking.

Isn't it a fundamental tenet of economics that the best outcomes occur when the price of a good fully reflects it's costs?

Phil said...

Argh. its.

Steven_L said...

All councillors (so I presume MP's too) in all parties and of all stripes buy into this idea we're all going to hell in a handcart from booze.

They all have massive cross-department 'harm reduction strategies' where council managers plot new ways to waste your money.

Here, we have a 9 strong 'street drinkers' team, and a maximum-ever population of 80 street drinkers. There are whole zones where no shop can sell beer or cider over 6% - because up to 80 people who are just really visitors drink too much.

Other councils have similar teams, and they dish out rail warrants and arrange hostel accomodation for the street drinkers when they fancy moving onto their next stop.

Councillors all love it all though, licensing laws give them power!

Old BE said...

Phil, if you want to make it more expensive to buy alcohol then by all means raise the duty on it.

Personally I think these supermarket boozes bargains are a complete myth. I have never seen these hilariously cheap offers that the media are so keen on reporting. I use a very down-at-heel Tesco so I would think that would have the offers but it doesn't. Where are they? Or are they a classic moral panic?

As CU points out there isn't even a problem with drinking. Drinking has been falling for 100 years.

There is a problem with town centre anti-social behaviour. Let's deal with that with proper law enforcement.

There is a tiny problem of "real" alcoholics but they are not going to be affected by this policy. Alcoholism is a health issue not a market intervention issue.

Instead of dealing with the underlying problems the last government and this government egged on by puritanical campaigners pretending to be interested in health issues have hit upon this as "something".

And they can all bugger off, quite frankly.

alan said...

1. We have adequate laws to deal with the problem areas. If the licensing act was enforced there wouldn't be a problem.

2. Supermarket alcohol in the UK is very expensive. (Goto France, Netherlands, etc to find out how expensive)

3. Alcohol is only harmful if it is consumed to excess. Alcoholics die very early in life and save the NHS money overall. Healthy people cost the NHS a fortune in their last 10yr of life.

4. Consumption tax is disproportionately unfair the lower the drinkers income is. If the drinker is moderately well off the increase in tax is irrelevant.

5. High tax on alcohol is just prohibition in another name. More overall harm will be caused by cheap illegal booze. Both to the consumer & society as gangs get an extra revenue stream.

7. Alcohol is legal to make (as long as its not distilled). It is very easy to make (to taste good takes more care). Home brewing is making a major comeback.

8. Home distillation, whilst kind of illegal (HMRC wants the tax), is very easy to-do and is very dangerous. I can go into any town in the UK and buy a distillation unit (and over the internet obviously). Only if you want to produce large volumes of spirits do you need to actually build a still.

9. IMHO this is ONLY to raise revenue for the government. The politicians think it will be acceptable to the voters because there is a perception that alcohol is a much greater problem than it really is.

alan said...

6. Using modern yeasts you can make a "drink" of ~13% ABV in 24hrs. I say "drink" as it will taste like crap, but it will get you very nicely drunk.

Old BE said...

The sad thing is it will raise very little tax revenue (VAT on the difference) because it isn't a tax it's a mandatory minimum price. Effectively it will hand retailers a nice little windfall.

It's totally outrageous and foolish.

I am fed up with the government today.

Phil said...

@Blue Eyes: I don't believe this is meant to be a revenue raising change.

Phil said...

NB. If you want to pull apart the costings for alcohol abuse in the UK, then they've almost certainly come from this NICE paper:

Phil said...


CityUnslicker said...

Phil, thanks for adding your comments.

I am with BE, we have duty already, this minimum price thing is a nonsense. Doubt it will ever happen anyway as blatantly against Euroepan trade laws.

Electro-Kevin said...

Happy Hours are a bad idea and lead to drunkenness.

Send NHS bills to A&E drunks for their treatment.

Graeme said...

Kev...the cure for drunkards in public places is for the licensed landlord to lose the license. Full stop. That is part of the job of being a licensed landlord.

Anonymous said...

Well Gideon could say that from hence forth any alcohol induced illness after due written warning will not be treated on the NHS think of the money saved, police trying to control drunken youths (male and female) and time doctors spend in hospitals dealing with drunks, that would save a few millions.

Timbo614 said...

@Jan & Phil,

This is not revenue seeking it RENT-SEEKING by 6 retailers of the most obvious type.

p.s. missed QT too have full blown flu / swine-flu since Tuesday early AM - Not pleasant - can just about walk as of today can't remember the rest of the week much :(

Phil said...

I don't have strong feelings on this one btw, but I don't recall the supermarkets campaigning for minimum alcohol prices. Have I missed something?

As I said earlier, I suspect (but don't have proof) that the supermarkets are trapped in a mutual race to the bottom on cheap alcohol pricing. It's a treadmill they'd probably be quite happy to get off, but I doubt it'll will affect their bottom line much.

alejandro said...

dont put the price up. bring it down! wow. i remember when a 40oz was only $1.99 send free text messages at by the way