Minimum pricing for alcohol

Status
Not open for further replies.
It’s been mooted in the Republic of Ireland as well where alcohol prices are a lot higher than Britain
Pub prices range from 4-30 Euro to 5-80 for Guinness depending on where in the country you drink ( larger is normally 20/30 c dearer )
The idea was that a bottle of wine would be a minimum of 7-50 and a can of beer a minimum of 2 Euro
However fears of cross border shopping have put plans on hold till Northern Ireland do the same
It will happen for various reasons.
Tax being one but health considerations are also a factor
The glass of wine before dinner now starts at lunchtime in a lot of houses and it’s 2 bottles a day.
I do our weekly shop and the amount of wine /spirits / beer in shopping trollies is frightening
I enjoy a pint 3 or 4 Times a week and probably drink too much but never drink at home.
Drinking at home every night is in my opinion a rocky road to go down
 

SerenityNigh said:
I don't know how taxes work in the UK, but in the US retailers pay these directly to the government, so they don't make a profit off taxes.In fact, they often lose out, because higher prices cause a corresponding decrease in demand for most products, so retailers end up making less profit as sales volumes decline.
Click to expand...

Sure, but the tax goes straight into the retailer's pocket which dramatically increases their margin per sale. That's how you make it palatable to the retailer and get the law passed without raising a stink - they won't sell as many items, but they'll make a lot more on each sale and they know that the patrons are price insensitive, so the retailer expects to make more money in the end.

In technical terms, you forgot (or were unaware) that you are dealing a good with significant price inelasticity.

The law is not a bad idea generally; the most problematic drinkers are constrained by cost and will consume what they can afford to. Raise the price, and they will consume less daily. Anyone consuming the affected products is more or less a problem drinker by definition.

The law has its problems. Think of it this way: turning Afghanistan into glass via nukes in order to (dramatically) reduce heroin supply and raise prices isn't going to solve the opioid addiction problem. Alternative sources exist that are cheaper than prescription pills, and the most likely result would be more accidental fentanyl and carfentanil overdoses.

The results of this law aren't likely to be anywhere near as dire, but I would expect that the tax would cause a black market to spring up. Stolen/diverted product can be sold at a discount relative to the government-mandated rate, and the prospective clientele by and large will not be strangers to illegal activity as a consequence of addiction. If you want a case study in the consequences of excessive taxes levied on an addictive product relative to what the market will bear, see: cigarettes, New York.
 
Martin Alvito said:
Sure, but the tax goes straight into the retailer's pocket which dramatically increases their margin per sale. That's how you make it palatable to the retailer and get the law passed without raising a stink - they won't sell as many items, but they'll make a lot more on each sale and they know that the patrons are price insensitive, so the retailer expects to make more money in the end.

In technical terms, you forgot (or were unaware) that you are dealing a good with significant price inelasticity.

The law is not a bad idea generally; the most problematic drinkers are constrained by cost and will consume what they can afford to. Raise the price, and they will consume less daily. Anyone consuming the affected products is more or less a problem drinker by definition.

The law has its problems. Think of it this way: turning Afghanistan into glass via nukes in order to (dramatically) reduce heroin supply and raise prices isn't going to solve the opioid addiction problem. Alternative sources exist that are cheaper than prescription pills, and the most likely result would be more accidental fentanyl and carfentanil overdoses.

The results of this law aren't likely to be anywhere near as dire, but I would expect that the tax would cause a black market to spring up. Stolen/diverted product can be sold at a discount relative to the government-mandated rate, and the prospective clientele by and large will not be strangers to illegal activity as a consequence of addiction. If you want a case study in the consequences of excessive taxes levied on an addictive product relative to what the market will bear, see: cigarettes, New York.
Click to expand...

There are plenty of alternatives (substitutes), and pubs should see a bump in sales (can't buy cheap liquor, but pints are unaffected, so you'll see some pubs offering *cheaper* pints to those switch off now higher priced liquor.) Guys like Pete will have new friends.
 

Could push up prices of mid to high price alcohol too. Cheap bottle of wine becomes same price as mid range bottle of wine. What are you going to buy? Supermarkets aren't daft, they'll increase the price of everything.
 

Status
Not open for further replies.

Welcome

Join Grand Old Team to get involved in the Everton discussion. Signing up is quick, easy, and completely free.

Register

Shop

Back
Top