Thursday, 2 September 2010

Minimum pricing for alcahol, good for the trade or not?

Fair play to the Scottish parliament. Finally a proposal to introduce a minimum unit price for alcahol. Once again Scotland seems to be prepared to put common sense before political expediency and propose a sane idea!

Accepting as a starting point that binge drinking IS a genuine problem in this country, and both medical opinion and personal experience would suggest that it is, is the mooted idea of a minimum selling price per unit of alcohol a good idea?

Assuming the price set to be 45p per unit, which what the Scotish Parliament has specified, who would it hurt? Well the supermarkets primarily. This price would fix the minimum price for a pint of beer at between £1 and £1.50, a 125ml glass of wine at 75p and a shot of spirit around a pound. To a pub person not excessive. Even in Wetherspoons. Now look at it from a supermarkets point of view: a case of Stella £26, a bottle of wine £3.50 and a bottle of spirits £14; bang go the Buy One Get One Free deals (not to mention the loss leading that they never do anyway…). That’s where it hurts.

But how does this affect the average consumer and the pub? The average ‘social drinker’ will see a minimal increase in their exependiture over the course of a week, a couple of pounds maybe. The average pub will see little or no effect – how many of us can sell beer at that sort of price and still make a profit? In fact the effect may well be positive as the price differential between the pub and the supermarket would drop, possibly enough that the added value of the pub environment will win out over the price of drinking at home – if only we could have a fag there as well. It would also cut down on the ‘pre-loading’, which is no bad thing.

The only people really hit by this potential measure are the binge drinkers – Special Brew £3 a can, British Sherry £6 a bottle….. Which is kind of the point of it all.

So where is the downside – at least as far as the pub business goes?

The Westminster argument for not adopting the measure is that it would ‘hurt the social drinkers’ as much as the binge drinker. This is clearly facile as previously discussed. A more reasonable explanation for the government attitude is that they cannot tax it. No extra income to the treasury. Obviously this is not acceptable in Whitehall, so instead they continue with the escalator of tax hikes, which boost their coffers whilst hurting the ‘social drinker’ as much, if not more than, the binge drinker. Where a minimum price per unit would only really effect the bottom end of the market a tax increase hurts it all, and more so at the higher end.

Accepting the initial premise that ‘binge drinking is bad’ I can see no better alternative than a minimum pricing policy to discourage it. It is the greed and short term thinking of the government that is preventing it in England – not the great public outcry. We all know that the country is in a dreadful economic state, but just for once can’t we put the health of the nation before the health of the treasury?