Friday, 2 March 2018

Och aye, what a nice crocodile!

The introduction of minimum unit pricing for alcohol in Scotland is now less than two months away. The policy has provoked a huge amount of controversy, but it has attracted a perhaps surprising supporter in the form of the Scottish Licensed Trade Association, the trade body for pubs, clubs and bars in the country. They have been happily regurgitating all the familiar tropes of the anti-drink lobby on Twitter.

But, as I have explained in the past, all of these claims are, at best, highly exaggerated and misleading.

Selling alcohol at pocket-money prices is a largely meaningless statement, and carries a somewhat offensive insinuation that it is routinely being sold to children. We already have the fourth most expensive alcohol prices in Europe. How high would it need to go before it wasn’t being sold at “pocket-money prices”?

While it is true that it is possible to buy some very cheap beers for less per litre than some very expensive brands of bottled water, as a generalised statement alcohol is cheaper than water is not far short of an outright lie. In my local Tesco, I can buy two litres of fizzy water for 17p. I’d really like to know where I can get beer cheaper than that. It’s about as accurate and meaningful as saying you can buy cars cheaper than pedal cycles.

And the claim that supermarkets are routinely selling alcohol as a loss-leader doesn’t stand up to analysis. I’m not saying it doesn’t ever happen, but it simply makes no economic sense to sell something that makes up a substantial proportion of a shopping basket at a loss. There may be very little margin in those discounted slabs of Carling, but they’re not selling them for less than they paid for them.

The SLTA’s support for MUP might be understandable, if self-serving, if they actually stood to gain from it. But it won’t give anyone a single extra penny to spend in pubs, and if the price of a can of Carling goes up from 60p to 90p it’s not exactly going to encourage anyone to spend £3.50 on a pint in the pub. Indeed, as Christopher Snowdon argues here, it could even lead to people spending less in pubs if they need to reallocate a fixed budget for spending on alcohol.

Plus, much off-trade alcohol consumption is not readily transferable to pubs anyway. The pensioner enjoying a nightcap of whisky, the family sharing a bottle of wine with their Sunday lunch, or the group of friends cracking open a few cans with their back-garden barbecue aren’t going to suddenly rush down to the pub if it costs more. It’s simply a question of making the everyday pleasures of ordinary people on limited budgets that bit less affordable.

The SLTA’s stance comes across as a nihilistic dog-in-the-manger attitude, taking the view that they have suffered, so why shouldn’t other parts of the drinks trade be made to suffer too? It’s certainly true that the Scottish on-trade has been hit very hard in recent years by the smoking ban and the reduction of the drink-drive limit. But they mounted a pretty feeble opposition to both measures, so in a sense have only themselves to blame. Taking it out on others, though, will achieve no more than a pointless venting of rage. Surely all parts of the drinks trade should take a united stand against the neo-Prohibitionists rather than allowing them to play divide and rule and being treated as useful idiots.

It should also be remembered that the study by the University of Sheffield used to support the policy actually concludes that the most “beneficial” results would come from setting differential minimum prices for on- and off-trades, with that for pubs and bars more than twice as high. Any advantage gained from minimum pricing could turn out to be short-lived, as the spotlight turns to on-trade pricing. And, when the guns of the neo-Prohibitionists are retargeted on the on-trade, the SLTA are likely to find themselves with very little sympathy from a Scottish public who they have been keen to see charged much more for their modest pleasures.

As Winston Churchill famously said, “An appeaser is one who feeds a crocodile, hoping it will eat him last.” And the SLTA are getting very pally with an extremely dangerous reptile. Their stance is one of contemptible hypocrisy and, given that they are vanishingly unlikely to derive any benefit from minimum pricing, utterly delusional.

25 comments:

  1. I'm generally not too bothered, I'll miss the cheap french lager from Aldi, but as long as the more expensive stuff doesn't go up as well I can put up with it.

    The Greens have already said the minimum is too low and I'm sure that every future government will at least think about tinkering with it. If it works, do it more. If it doesn't work, we need to do more. It's hard not to see it eventually hitting pubs as well.

    To be fair to the pubs, decades of punters complaining about the cost of a pint and using a slab of lager from the supermarket as a comparison seems to have made a lot of the trade hate the supermarkets with a passion.

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    1. "It won't affect me" isn't really a very convincing argument against it - "First they came for the cheap lager drinkers", and all that. Also bear in mind that this will affect 70% of all alcohol sold in the off-trade, it's not just a few cheap bottom-end products.

      It will affect some of the stronger premium bottled ales sold in 4 for £6 offers, although of course multibuys have already been banned in Scotland.

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    2. It will make the minimum price for a bottle of scotch £14 and for a bottle of wine £5 - £5.50. Not really a worry for me but it will soon go up.

      Does the extra income go to the retailer or is it taken as tax?

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    3. It goes to the retailer. Tax on alcohol isn't something the Scottish Government can change.

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    4. "I'm generally not too bothered, I'll miss the cheap french lager from Aldi, but as long as the more expensive stuff doesn't go up as well I can put up with it."

      The lack of foresight is astounding. Come back when the price of all booze is raised proportionally with the minimum pricing. When that bottle of Tesco Value Whiskey goes up to £14 a pop, that bottle of Famous Grouse isn't staying at £15 for long. Nor is that bottle of Aberlour going to stay at £30.

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  2. Well, I have some sympathy for the libertarian viewpoint on this, but also for the taxpayer and NI contributor, who are shelling out a twelve-figure sum each year to fund the NHS, a lot of which is spent on those who can't be trusted to do even the minimum to take care of themselves.

    And that's far, far more than gets spent on so-called health tourism.

    So, we'll just have to wait and see.

    HH

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    1. Rubbish. All forms or serious substances abuse save the NHS loads of money. Substance abusers generally don't live to a ripe old age which is when people become a serious burden on the NHS. Not to mention them not drawing their pension.

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    2. Can you quote some reliable evidence for that claim David? That is, that the proposition, that the combined burden on the taxpayer, of excessive drinking, smoking, eating, drug use and the rest, among sixty-five million people is rather more than the cost of health tourism, is "rubbish"?

      That said, I suspect that part of the motivation for this among the authorities is not for the sakes of anyone's blue eyes, whether drinkers' or taxpayers', but to do something about the contibution of hangovers to the UK's pretty mediocre productivity-per-worker. HH

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    3. "to do something about the contibution of hangovers to the UK's pretty mediocre productivity-per-worker. HH" - Do some people really think like that? Jesus.

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    4. I'm only speculating, to make some sense of what must be a pretty unpopular move politically. What is the other side of the equation?

      I suppose that there's a claimed reduction in alcohol-related violent crime too.

      Incidentally, the French mounted a pretty successful campaign in the 1970s and 80s, but calling it what it is, against public drunkenness. HH

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    5. Since "health tourism" is merely a tabloid pejorative, rather than a properly defined, term the answer is no

      There is plenty of evidence that smokers are not a nett cost to the healthcare system.

      https://www.forbes.com/sites/timworstall/2012/03/22/alcohol-obesity-and-smoking-do-not-cost-health-care-systems-money/#2bad4f4f64aa

      Add to that the £12G that is collected in tax on tobacco every year. And the £500M that is saved on the pensions of the 75K people who die prematurely each year because of smoking.

      Drinking is harder to cost since modest drinking actually increases lifespan and the number of really heavy drinkers is quite low.

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    6. Most alcohol-related violent crime, and the overwhelming majority of public drunkenness, are associated with on-trade consumption, which MUP at least initially will do nothing to address.

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    7. A great deal of alcohol related crime in the north east (outside the drinking centres of Newcastle and the bigger towns) is generated from people drinking at home or on the streets and is usually associated with drug taking which must share the blame for disorder. The drunken scrotes causing trouble here don't go to pubs mainly because all the pubs where they were welcome have shut, or because said scrotes are underage anyway.

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  3. MUP is a bit like congestion charging: you either make it so expensive that all but the richest are unable to afford to do it (drive into city centres, drink alcohol), and thus cut the revenues you get from it, or set it at such a low level that, apart from the poorest, most people will grumble a bit about it but still pay the extra cost to carry on doing it, so it's effectively just a new tax rather than an effective solution to the problem, whether alcoholism or pollution in our cities.

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    1. Only to a limited extent, as congestion charging raises money for the public purse, whereas MUP doesn't. But both have the effect of driving business elsewhere...

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    2. The other Mudgie !4 March 2018 at 19:01

      MUP drives business elsewhere - but not to pubs.

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  4. like a packet a fags, they when up and up and every year a few customers gave up but never enough disgruntled people to make it an issue.

    Now booze will go up and up and it won't affect you. Until it does affect you. That's when you'll give up.

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  5. Yep. The French addressed that with prominent obligatory notices in all bars, and most of all, with effective enforcement. They went nowhere near MUP. HH

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  6. As I work for a well known supermarket chain Trust me we do sell them at a loss..
    However that isn't the full story.
    We sell them for less than we pay for initially, for two reasons
    1. Offers increase footfall and we can then sell them other things at an increased margin
    2.the bigger alcohol companies reward us for selling them, I.e the more we sell, the more adverts they place with us, the more money they give us for promotions, whether in store or campaigns. However it comes with a risk, they encourage us to buy in bulk, take their offers which of course can leave us with stock that we can't sell.

    But trust me, a lot of the popular brands at face value are sold at a loss.

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    1. This is one area where minimum pricing has already been applied to prevent retailers selling alcohol at below duty+VAT. For example, minimum price for a 440ml can of 4% beer is 41p, minimum for a 70cl bottle of 37.5% vodka is £9.06, minimum price of a 24x440ml slab of 4% lout, £9.68.

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    2. The other Mudgie !12 March 2018 at 18:45

      Neil,
      You obviously know more about supermarkets than most of us.
      My local Post Office is now primarily a Bargain Booze shop so how do they manage to sell cheaper than supermarkets as with alcohol being about all they sell they surely can't be doing it at a loss and the brewers etc. aren't likely to be supplying them cheaper than the bigger supermarkets ?

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    3. Maybe Bargain Booze have been selling at a loss.. https://www.telegraph.co.uk/business/2018/03/08/300m-wiped-bargain-booze-owners-value-shock-profit-warning/

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    4. A lot of bargain boozes are franchises , and therefore get rewarded for sales.

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  7. I see that the SLTA have now blocked me on Twitter. Useful idiots indeed.

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    1. Wear it as a badge of pride, Mudgie

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