Friday, 22 November 2013

Who’d ha’ thought it?

In October 2011, the Scottish government introduced a ban on multi-buy discounts for alcoholic drinks purchased in the off-trade. The thinking behind this is that these deals tempted people to buy more than they otherwise would have done and thus they ended up drinking more.

However, two years later, an in-depth study funded by the Department of Health Policy Research Programme has shown the measure has had no significant effect on levels of alcohol purchasing. People were buying alcohol more frequently, but buy less on each occasion. This clearly indicates that multibuy deals tended to be used by the more organised consumers to buy a set level of drinks at the most advantageous price rather than increasing overall consumption.

To a large extent, retailers have replaced these offers by price reductions on individual items and packs, which ironically leads to a lower price point for less well-off drinkers who may not have been able to take advantage of the multibuys. This kind of deal seems to have spread south of the border too – while I haven’t carried out thorough research, and I don’t buy them myself, I get the impression that discounts on individual beer and cider multipacks have grown in popularity in comparison with “3 for £22” offers.

Inevitably, given that this policy has been ineffective, the call comes for more to be done. But even that may not work. “Banning all forms of price promotion of alcohol may be considered a more effective option, yet, such a policy may still be compromised by reductions in the standard price of alcohol products, thereby making alcohol more affordable.” Indeed, I would expect an ALDI-style policy of permanent low prices without any promotions wouldn’t cut consumption either, and indeed may be preferred by many consumers. It should be remembered that price promotions of all kinds are primarily intended to benefit retailers and manufacturers. Canny consumers may gain, but more dim or time-pressed ones will lose out.

In the end, the conclusion is “More encompassing regulation of price promotion and price is likely required, in order to reduce alcohol purchasing and in turn consumption and related harms.” So despite us having about the second highest alcohol duties in the EU, drink is still too cheap!

5 comments:

  1. I think in England the Aldi model has a few retailers spooked so they are attempting to copy with value per unit rather than value for multiple units.

    They have no respect for cooking lager enthusiasm. Soon no one will have 6 crates of Carling stacked by the fridge and only have what they need that week. Sad times.

    ReplyDelete
  2. It's quite funny in one way, all this, because it shows these people have no understanding of either business practices or human nature. Most beer bloggers could have anticipated this outcome: indeed, most of us have, one way or another.

    CL: I feel your pain.

    ReplyDelete
  3. I reckon a lot of the motivation behind measures of this kind is the denormalisation of alcohol purchasing rather than believing it will actually be effective in reducing consumption.

    ReplyDelete
  4. A BBC Business Feature pointed out the closure of 26 pubs per week in the UK due to
    The Recession
    Supermarket low prices
    People staying in !!!!!

    Sooner or later someone is going to spill the beans on the BBC
    editorial staff and disclose who
    is really deciding programme content
    Lucius Flavius

    ReplyDelete
  5. Well, Lucius Flavius, don't keep us guessing: tell us who really is deciding programme content.

    ReplyDelete

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