Home > Local Democracy, Terrible Tories > Alcohol, minimum pricing and the right to drink

Alcohol, minimum pricing and the right to drink

I’m glad to see the Conservative government is opposed to a minimum price law on alcohol. As I said last time this issue came up, I am opposed to such a law on the grounds that people should be allowed to drink to excess if they wish. I rejected the argument that the social costs of the related ill-health and crime justifies government intervention.

The issue has recently flared up because Tesco came out to support a minimum pricing system, and because NICE has subsequently also come out for a minimum price per unit of alcohol. What few enough people noticed when Tesco came out for the law is that this view is self-interested; it will mean they no longer have to worry about cutting prices.

Currently many supermarkets sell alcohol for less than it is worth to them – it brings customers into the store and, so the theory goes, customers will buy other goods which are sold for a profit. A minimum price on alcohol eliminates this practice, as the minimum would almost certainly be well above the cut prices of supermarkets.

To give an example of how this work, Professor Anne Ludbrook, one of the authors of the NICE report, said the following:

“At the example price of 50 pence, a bottle of vodka would be just over £13. Whereas in the supermarkets currently you could find vodka selling at below £8. Cheap white cider, for example, would go up to over £7 a bottle. It’s currently selling at about £2.” [BBC]

In the case of the cider and vodka, that’s £5 per bottle which covers the amount supermarkets used to write off as a loss, to get customers into the store, and probably adds a healthy profit to the sale as well. The minimum pricing would also eliminate the need for supermarkets to compete; they could just sell everything for the minimum price.

Self-interest beats outright misinformation, however, which is where the drinks industry have put their faith.

Simon Litherland of Diageo GB said: “Yet again it is disappointing to see continued support for minimum pricing despite no credible empirical evidence that it would be an effective measure in reducing alcohol-related harm.”

Andrew Opie, food policy director at the British Retail Consortium, said: “It’s too simplistic to say the UK’s alcohol problems are down to price.

“Irresponsible alcohol consumption is primarily a cultural issue that needs to be addressed through education and information.”

There is evidence, from studies prepared for the Scottish Parliament, as it debated minimum pricing laws that a) price increases do correlate to decreased demand, b) that binge dringers, young drinkers and harmful drinkers all choose cheaper drinks and will be hit by minimum pricing laws and c) that increased taxation and prices do reduce harm.

All of which escapes the point I raised the last time, that the people who are likely to be affected by drinks with an enforced minimum price will be poor people. People who can’t afford to pay £13 instead of £8 for a bottle of vodka. Or, the examples which I raised last time, minimum £6 for a bottle of pinot or a couple of six packs of lager.

My query is, why should they have to? We don’t routinely tax or look down upon any number of practices which cost the NHS and other social services money. Why should alcohol be different?

If it is the social effects of binge drinking we want to combat, then challenging the culture that our cities inspire with ever decreasing number of social places except pubs would be a start. So would challenging the culture of silence around things like domestic violence, or educating people in safe practices to protect against rape.

Meanwhile, NICE can get off their high horse, from which they claim that alcohol consumption problems, including 15,000 direct deaths, cost the NHS £2 bn per year. Which is awesome, because the taxes levied on alcohol bring in well over £5 bn per year. If the government wants more revenue, to devote to social purposes like making our cities sociable once more, they can get it from the breweries, and end the monopolistic practices which drive our pubs to seek high-turnover rather than a social clientele.

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  1. David
    June 2, 2010 at 5:50 pm | #1

    I’d be interested to know where the author of this piece lives and whether they go out and about in most of our towns and cities on Friday and Saturday nights. Ever visited an A&E ward on Saturday night? A police station? Then there is the question of who picks up the bill afterwards.

  2. June 2, 2010 at 6:00 pm | #2

    Great article Dave,

    I mentioned it in a post on the opposite side of same topic, which can be found here: http://www.respublica.org.uk/blog/2010/06/we-are-addicted-low-alcohol-prices

    As I put it there – while I agree that people should have the right to drink to excess if they wish, I’m not convinced that such a right extends to protection from specific taxes or price floors on alcohol. I see this type of paternalistic market intervention as part of a wider issue around the limits of a failed economic and social libertarianism that this new government will need to address.

  3. June 2, 2010 at 6:53 pm | #3

    Some alcohol is sold at a loss in supermarkets; forgive for my un-marxian analysis but Tesco isn’t altruistic for this, and I get drunk. Now, one could pursue the unfairtrade grape route, so be it, Tesco should sell the fairtrade wine at a loss, it’s within their reach, and ticks those philanthrocapitalist boxes that they hold so dear. All good.

  4. Glyn Gregory
    June 2, 2010 at 8:17 pm | #4

    I wholeheartedly agree with all the above, and we, as the majority should begin to be more vocal against this, or we will end up with the nanny state doing the same as they did with smoking. There are laws against being drunk and disorderly, so video the evidence and impose heavier penalties. As for being taken into hospital, bill them for treatment. That should cover the cost. Just let the majority, law abiding people enjoy their drink at affordable prices. I dont agree that prices are less compared with years ago, because I can only go out twice a week now compared with most of the week in the sixties and seventies. Tax and duty levels have risen enormously in the eighties and nineties. Is there a website anywhere to let people put their point over to the government.

  5. June 2, 2010 at 10:11 pm | #5

    David, the author of this piece goes out on a regular basis in various cities (well one city) and towns in East Kent – as well as having grown up on the streets of Belfast and Bangor in Northern Ireland. I have indeed been to A&E wards on weekend nights and I live down the street from a police station. No one is querying that there is a cost to binge drinking, but surely, as I outline at the bottom of the piece, this cost is already met?

  6. June 2, 2010 at 10:17 pm | #6

    Carl, I didn’t even know there was such a thing as fair trade alcohol. Not sure what was unmarxian about your analysis; I mentioned above Tesco’s lack of altruism…

    @Glyn, alas websites don’t do much, and politicians, though quite happy to have their photo taken besides populist campaigns like CAMRA or Save Our Pubs, when they sit in the chamber are a lot less concerned about these issues, except from very tendentious points of view.

    I disagree that we should increase video surveillance, and I disagree that we should charge people who wind up in A&E directly (for that’s just the same as an extra tax and it’s not always people who start fights who end up in A&E – silly accidents or victims end up there too). The cost is, at first glance, covered.

    What we should be wary of, even while arguing that the State shouldn’t tax alcohol, is this argument coming from the mouths of private industry – who are every bit as willing to step in with price rises of their own if it fills their coffers at our expense. A reduction in tax allows them to do this.

  7. Barney Stannard
    June 2, 2010 at 10:22 pm | #7

    I wonder also whether minimum pricing will lead to more crime?

    That said I have a certain sympathy with the desire to stop the sale of super cheap alcohol. I remember when I worked in an off-licence the most depressing part of the day was when this one chap would come in, every day, and buy 3L of Frosty Jack for £3.09. One of the nicest guys you could meet. Part of me thought that if it were £10 he’d just end up spending less on food etc. But part of me did feel a certain loathing for the people marketing a drink so obviously aimed at people like him.

    Dave’s right – education and support are what is needed. Raising the price won’t get to the root of the problems. As Glyn points out, prices are way higher than they used to be and yet we apparently have more trouble.

  8. June 2, 2010 at 10:24 pm | #8

    One of the things I like about the new legislation is a potential complete ban on advertising – something I wholheartedly support, despite rather enjoying Carlsberg ads and their parodies. That, at least, might deal with the issue of firms marketing their drinks in a certain way.

  9. June 2, 2010 at 10:42 pm | #9

    I was worried the conclusion to my comment (I like geting drunk) was jolly undialectical, however if that were true I’d be in good Marxist company, Marx himself in fact, walking up and down Tottenham Court Road smashing lanterns.

    Fair Trade wine from Tesco indeed, very good, if bitter from guilt.

    Adam #2; it might be a while until you nice folk at respublica find something to agree with this blog on for a while, but you’re all nice people.

  10. June 3, 2010 at 10:30 am | #10

    @ Glyn,
    “As for being taken into hospital, bill them for treatment.”

    so what you’re propsing is the end of the NHS. Why stop at billing drunk people taken in to hospital? Why not bill people who fall of mountains or motorbikes or skateboards? What about people who fall down stairs or attempt suicide? Why not bill cancer patients too?

  11. June 3, 2010 at 3:32 pm | #11

    Apologies to the author of this post. In a clumsy tweet I accused him of saying he wanted to tax pubs instead of breweries.

    While I agree with 90% of what Dave Semple says, I knew there was something troubling me about the final paragraph, and, after closer reading, this is it. A distinction has to be made between breweries (which make and sell beer) and pub companies (sometimes, but by no mean always, owned by breweries) who are the ones that frequently have a monopolistic hold over tenants’ and lessees’ beer supplies.

    We shouldn’t forget that there are thousands of smaller, independent breweries without this privileged trading position who would be disproportionately stung by an extra tax burden.

    It’s also likely that any tax on pubcos/breweries would be merely passed on to trade customers (ie pubs) and quite possibly consumers, hitting the pockets of the innocent, responsible majority of drinkers – just as minimum pricing would.

    If anyone’s interested in further reading on this issue there’s lots here at my own blog, The Drinks Remix: http://nigelhuddleston.wordpress.com/

  12. June 3, 2010 at 4:22 pm | #12

    Yes it’s the biggest breweries and pubcos that I’m after. And the passage of costs on to the drinking public is something that can be regulated by the government. One would also hope – though I do not expect it – that the existence of competition might also act against the propensity of manufacturers to pass on additional costs to the consumer, should one see the opportunity from another’s price rise.

  13. August 10, 2010 at 11:45 pm | #13

    This is one of the few articles against minimum pricing that is honest and for the most part accurate, so I commend the author.

    However I find it disagreeable to suggest that because alcohol tax revenue is £5 billion and costs to the NHS are £2 billion (actually its closer to £3 billion) the alcohol burden on the NHS should be accepted in this respect. Firstly, alcohol harm costs the economy around £21 billion when adding crime and disorder, lost work days and other social impacts, so that leaves the tax payer with quite a net loss.

    Accusing NICE of being on a ‘high horse’ about this is also unfair as they are not trying to preach or moralise, NICE are simply reccomending the most evidence based options to reduce harm, illness and disease. As you acknowledge, minimum pricing is well evidenced as being the most likely effectice population level approach. I don’t suggest its a panacea, but supermarkets are cynical and add the loss onto other products so will always be making money from us.

    I respect your personal admission that you feel individuals have the choice on these matters, and I would have agreed with that if I were not aware of the way in which alcohol problems rarely affect the individual only. In some respects I once felt the same way about speed cameras – i don’t want to pay a fine for driving over 30 mph when I feel I can safely do on many roads. However the evidence is speed cameras save lives so I’m prepared to put my small personal issue with them aside knowing that saving lives is more important.

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