Monday, 2 March 2009

Making it the minimum

I see the Scottish government are to press on with their misguided plans to impose a minimum price per unit of alcohol. Obviously much depends on where it is set, but anything over 30p per unit will substantially increase the cost of mainstream products in the off-trade. The plan has rightly been condemned as something that will penalise ordinary, responsible drinkers while doing nothing to curb problem drinking. It could even make matters worse, by taking trade out of the hands of legitimate retailers and handing it over to bootleggers. You can just picture the white vans lining up outside Carlisle ASDA.

And it is extremely disappointing to see CAMRA lending support to this plan. Do they really think that this Puritanical crusade against alcohol is going to leave pubs unscathed? And do they not appreciate the difference between imposing a minimum price and banning loss-leading? They are foolishly walking in to the banners’ divide and rule trap.

It still hasn’t been made clear exactly who will pocket the difference between the normal selling price and the government-dictated minimum. Anyway, let’s hope the plan falls foul of European competition law.

Edit: this is an interesting in-depth piece from The Scotsman about the plans.

11 comments:

  1. I agree Curmudgeon, minimum pricing will help nobody. It's been proven that bootlegging will be the result.

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  2. It seems to me that when deciding whether or not it approves of any piece of legislation CAMRA only asks itself "will a rival type of alcohol suffer?", if yes, CAMRA supports it. Broader societal implications are not addressed.

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  3. Whilst doubting that minimum pricing would have any effect on pub going, there are those that think it will. Shouldn't the Scottish plan to guinea pig themselves be welcomed? An experiment that will not affect the English. 12 months into the Scottish scheme, the effects will be clear, both its costs and its benefits, from tackling social problems to pub going. The effects of the Scottish plans will inform the debate over similar proposals in England.

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  4. Alex, I hardly think it's a good idea to experiment with something that seems manifestly wrong just to prove a point. And I suspect the most likely scenario would be that, say, 40p/unit did not seem to be "working", so it kept getting ratcheted up even further.

    There is a huge potential for unintended consequences here – one of which could be, of course, that as selling mainstream alcoholic drinks became more profitable for retailers, they would put more effort into promoting them. Price is by no means the only weapon in the armoury.

    I've also seen it suggested that this could be a backdoor way for Alex Salmond to introduce border controls to stop the import of low-cost alcohol from England - or at least to provoke conflict between the two countries.

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  5. Well, Alex does like to irritate the Treasury, but I suspect that is a conspiracy too far.

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  6. Hmm, I wouldn't be so sure. This article says "Kenny MacAskill, the justice secretary, is meeting Jacqui Smith, the Home Secretary, next week, and he will be raising cross-Border sales and ways of restricting them." It looks like they're seriously considering some form of internal customs barrier.

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  7. It's unbelievable that they're even considering such a thing. On the other hand, both governments have obviously got alcohol firmly in their sights.

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  8. It is interesting how all the comments on this from the beer bloggers such as Tandleman, Tyson and Woolpack Dave have varied between doubtful and strongly opposed. I've given up hope of CAMRA expressing strong opposition to the anti-drink lobby, but surely on this issue they could at least have expressed a bit of scepticism.

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  9. We are not experimenting, Curmudgeon, we are sitting back and watching an experiment that a neighbouring country of similar language and culture are conducting. The results after 12 months will provide all the evidence required to understand the likely effects in England.

    Currently we have educated conjecture with which to guess the likely consequences. You are exactly right about the unintended consequences, why not let the Scots find out for us what they will be?

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  10. Minimum price agreements only fall foul of Art 81 EU Treaty if they restrict or harm trade between Member States AND they are agreed between businesses. So a statutory minimum price which does not discourage imports or exports is exempt on both counts.

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  11. Not surprisingly, the plan is given a strong and richly-deserved kicking on Freedom2Choose.

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