The Honeymoon is Over

[kalniel]

People will compromise in other areas in order to get the same amount

That goes against the general model for how markets work. Usually it's a fairly clear correlation between price and quantity bought. The exception is for those who are addicted to alcohol. I agree they aren't going to be affected much unless it provides some additional motivation to seek help (ala cigs), but then again the people who are actually addicted to alcohol aren't the ones causing the most cost to society through drunkenness. Hence these measures aren't targeted at them in the slightest. Yes, they'll get caught in the crossfire and they deserve some targeted help to deal with that, but that doesn't mean we shouldn't try and address the bigger picture.

That would be the right way to go about it, a minimum duty imposed on alcohol so the state has a guaranteed minimum that can be ploughed into public services to offset the real cost of alcohol, that way the supermarkets can still loss lead if they wish but the government still benefits

Yup. It would also encourage manufacturers to come up with nicer lower-alcohol drinks, while allowing people to pay a premium for stronger drinks if they chose. Unfortunately people are quite likely to vote out any government that introduces it as the opposition can just play the 'the government are getting rich on high taxes' card. With a minimum pricing option they just vent against the shops.

Another caveat of raising the price is that you open the market up to abuse (i.e. knockoff booze that could be dangerous), as it is, people wouldn't even bat an eyelid at buying off the shelf rather than backstreet, with price increases you introduce a new danger to people that are incapable of thinking sensibly (i.e. the same people that will buy a white powder off a person they've never met), you have no idea what is in it, and no idea what it will do to you... But it's cheaper than Tesco so it's better...

Yes that's a small concern, depending on just how big the price increases would be, but I'd like to think that as long as alcohol isn't illegal then this will only happen in small amounts - again look at fags - the govt. forced increase in price over recent decades has been enormous, and there is a black market as a result. But it's tiny.

O.K., well explain how it's going to work then? How exactly do you enforce a law that says that a retailer may not sell an item below cost price? Because as I see it, the only possible way is to set up a government Alcohol Price Monitoring Agency to which every single transaction between alcohol retailers and suppliers must be reported, and which then undertakes regular monitoring of retail sale prices to ensure no negative discrepancy (at, presumably, great expense to the taxpayer). Realistically this puts the wholesale price of booze in the public domain- for a start, most government departments are as leaky as a sieve, and for a second, as soon as anyone is prosecuted for breaking this law, the relevant facts will have to be disclosed in a court of law. And when the wholesale price of booze is out in the open, then the inevitable outcome will become a homogenisation of prices, and almost certainly an increase therein, to the detriment of the consumer.

You just make it a mandatory audit item - it's not that different from sorting out all the different duty rates for different types of alcohol at the moment.

And, TBH, the cost price of alcohol is, to a first approximation, absolutely sod all. In France you can buy a bottle of table wine for about 50 pence, so 5-6p a unit.

Still? I used to go regularly, but recently it's not been any cheaper than the UK.

Consumption taxes (as opposed to income taxes), and/or cartels (defacto or otherwise) manipulating the price of goods, always discriminate against those on lower incomes. This is surely self-evident?

I disagree - especially when it is a consumption of luxuries tax. A discriminatory tax would be one that applies equally regardless of amounts consumed, or one that overly emphasised a necessity. A consumption tax on a luxury item gives people on lower income a completely transparent choice in whether to purchase them or not, and in this way completely mirrors the base price of the item too. Unless you think it's unfair that people on lower incomes should have to pay for luxury items in the first place?

[Saracen]

I've got an answer. As supermarkets are so concerned about the social impact of excessive alcohol, lets do the off-licence trade a favour and remove ALL booze licences from all supermarkets. I'm sure they'd be delighted at the social responsibility of that.

In terms of personal impact, I don't give a flying fig if they put a minimum price on booze. If someone managed to come up with a genetic mutation that meant any human imbibing any form of booze spent the next three days puking their toenails up, it wouldn't bother me, since I so rarely touch the stuff that never doing it again wouldn't cause me a moment's regret.

So I have no problem with the principal of a minimum price. If it works. My concern is that I suspect that all it will do is raise supermarket profits. To affect spending patterns, it would have to be a colossal rise in price, because of inelasticity, and I doubt that would be socially acceptable. And besides, it would probably result it spawning a huge increase in home brew and black market/bootleg booze .... with inherent safety and quality control issues. For the same reason, I don't see a ban working, sadly.

But this sudden enthusiasm for minimum pricing from supermarkets out of concern over binge drinking strikes me as absolutely two-faced. Do any of them have the balls to do it unilaterally, if they're so damned concerned? Do they hell. That would hit profits and we cant have that, can we?

The supermarkets and their cheap booze are largely responsible for binge drinking in the first place, so it's a bit late to be all pious about it now.

[lazer]

Agreed as all they are concerned about at the end of the day is money. Nothing else.

[Biscuit]

If alcohol gets too expensive then it will just start going black market, hows that going to help the police and hospitals?

Admitadly an extreme result and mostly unlikely but thought i wud throw it in anyway

[TooNice]

If someone managed to come up with a genetic mutation that meant any human imbibing any form of booze spent the next three days puking their toenails up, it wouldn't bother me, since I so rarely touch the stuff that never doing it again wouldn't cause me a moment's regret.

Not quite as drastic, but mother nature has been cooking something up for a long time: http://en.wikipedia.org/wiki/Alcohol_flush_reaction
(Though evidentially, it's not drastic enough judging by the growth of alcoholism in East Asia too)

[Rave]

Yes that's a small concern, depending on just how big the price increases would be, but I'd like to think that as long as alcohol isn't illegal then this will only happen in small amounts - again look at fags - the govt. forced increase in price over recent decades has been enormous, and there is a black market as a result. But it's tiny.

Hmm. I'm a smoker as well as a drinker, but I like rollups and I smoke about 10 a day, rolled very thin out of preference. As a result, I smoke a 50g pack of baccy about every 3-4 weeks- so I can easily, and completely legally, come back with a year's supply out of one trip to Belgium or Spain. And I holiday in Spain most years, because it's a really enjoyable, good value holiday.

So I personally don't need to buy black market. But I know from experience that if I ever needed to, I could ask a few questions and get some moody rolling baccy in a day or two at half the UK price. In fact, I know two guaranteed sources right now.

You just make it a mandatory audit item - it's not that different from sorting out all the different duty rates for different types of alcohol at the moment.

It is different. At the moment the government knows who's bought what quantity of booze, and who's liable for what amount of duty as a result. Collating the sale price of any and every type of booze traded is going to be a massive extra administrative burden.

Still? I used to go regularly, but recently it's not been any cheaper than the UK.

Well, since the pound tanked against the Euro, Vin De Table's up to more like 80p a bottle, and wine you'd actually choose to drink starts at the £1.20-£1.50 mark. Unless you get lucky like we did late last year- Sainsburys Calais had 12 50cl bottles of First Cape Australian blend for £7.50 a case- that's 63p a bottle, or 94p equivalent price for 75cl. It was good stuff too. Naturally we came back with 10 cases in the boot. But even on a normal day, decent stuff like Tescos South African Pinotage, which would be £4-5 a bottle here, is <£2 in France.

And filling your car with 20% cheaper diesel mostly covers the cost of the ferry, if it's got a 60 litre tank and you arrive there empty.

I disagree - especially when it is a consumption of luxuries tax. A discriminatory tax would be one that applies equally regardless of amounts consumed, or one that overly emphasised a necessity. A consumption tax on a luxury item gives people on lower income a completely transparent choice in whether to purchase them or not, and in this way completely mirrors the base price of the item too. Unless you think it's unfair that people on lower incomes should have to pay for luxury items in the first place?

I don't think alcohol is a luxury. If alcohol consumption automatically led to antisocial behaviour then I would see your point. But it doesn't. There is a statistically very small chance that if you get roaringly drunk you will cause trouble for yourself or other people. But apparently, that very small chance is enough to justify raising the price of entry so that only the better off in society can easily afford it.

And I personally am in the category of being relatively better off. I'm by no means wealthy, but I live well and want for nothing. My monthly booze bill is pretty trivial in the greater scheme of things.

[jim]

If alcohol gets too expensive then it will just start going black market, hows that going to help the police and hospitals?

If half of the people who drink it die within minutes, it would probably help quite a lot. Not sure it's a particularly positive outcome though.

[Hicks12]

I don't think alcohol is a luxury. If alcohol consumption automatically led to antisocial behaviour then I would see your point. But it doesn't. There is a statistically very small chance that if you get roaringly drunk you will cause trouble for yourself or other people. But apparently, that very small chance is enough to justify raising the price of entry so that only the better off in society can easily afford it.

And I personally am in the category of being relatively better off. I'm by no means wealthy, but I live well and want for nothing. My monthly booze bill is pretty trivial in the greater scheme of things.

Not to pick on you rave but i just had another light read of this thread and thought id post my thought on this part.

Alcohol isnt a need to survive, yes you can enjoy it and have a very good time with relatively low amounts of it which is why i have no problem with alcohol (i like my cider ), however it is entirely a luxury because without it you can still have a smashing time and get on with your life.... for instance, an internet connection is a luxury if you dont have it then you cant use it, same as a card/bike etc etc.

I think alcohol has become a social standard and required for a life which really is wrong, off the top of my head its similar to the majority thinking apple ipods are the only mp3 players on the planet.

It doesnt really affect me the minimum pricing as i dont buy much alcohol, its the chavvy kids that ruin it for most of us though which is why i also believe your right in saying that its wrong, why should supermarkets be told to not sell at the price they want when really, its up to the consumer to control their consumption!. You dont see someone going to morrisons, buying the shop full of chocolate and crisps then eating them all and complaining they are fat, the government doesnt restrict pricing on chocolate!.

Does my head in when really the problem is 50% of the society that are useless bums and waste our cash to pay for drugs/games/useless crap and drink! Then get pissed and start fights.... yes that is why i hate england most times .

[Lucio]

I've got an answer. As supermarkets are so concerned about the social impact of excessive alcohol, lets do the off-licence trade a favour and remove ALL booze licences from all supermarkets. I'm sure they'd be delighted at the social responsibility of that.

You're found the core of the issue there I think, is it price that's really the problem or is it ease of access? The fact that it's so straight forward to walk into Tescos, pick up your shopping, then hit the booze isle certainly contributues to the problem because it makes it such an every day experience. If you had to go to an off-license or even just a seperate shop within the supermarket, it could make the world of difference.

[MD]

The reason they are going for the loss leaders is the people who buy it.

Stand outside a supermarket on a Friday and check the average age of the people buying the cheap packs and deals and I would bet its not much more than 21. Its that same demographic which causes the most issues on a night out.

I suspect they won't aim this change at duty, but I suspect there will be a minimum allowable price per 100ml dependent on quantity of alcohol in 100ml. e.g. High alcohol content beer (5%+) will have a higher minimum price per 100ml versus the same 100ml of 3.5% - to me that is a workable and fair solution to address the issue at hand.

[lazer]

I really don't think it will impact greatly on peoples drinking habits though.

[TheAnimus]

I'm fairly sure its not very workable, BUT, I don't know nearly enough about how the tax is paid.

Lets not forget currently every retailer no matter how small has to log the sale price of each type of item vrs the cost price, so they can charge VAT. So the tory idea of little government, it isn't that much of an inconvenience if they decide that they really need to control us.

I just don't know, but I immediately thought is this some tax rise too? I don't know how the boose rates are applied, but if you sell something for £2.00 that costs £2.50 wholesale, the cost to the consumer might be say £3.00 with the punitive rate of VAT. But if you sell it for the cost price, the consumer spends £3.75, therefore you can 'save' the consumer 25p on their basket by putting a higher margin on something that attracts either normal VAT or no vat at all?

Is that what this is all about?

[Stringent]

Out of interest, has anyone quit smoking because its 'just too much money'? If not I doubt this will curb the drink problem. They know we are suckers for it so will pay to get it.

[kalniel]

I just don't know, but I immediately thought is this some tax rise too? I don't know how the boose rates are applied, but if you sell something for £2.00 that costs £2.50 wholesale, the cost to the consumer might be say £3.00 with the punitive rate of VAT. But if you sell it for the cost price, the consumer spends £3.75, therefore you can 'save' the consumer 25p on their basket by putting a higher margin on something that attracts either normal VAT or no vat at all?

Is that what this is all about?

I'm not sure I follow you - aside from VAT, the punitive duty on alcohol isn't a percentage figure AFAIK - it's a fixed price per litre of product (with different rates depending on class of product), so it wouldn't be changed by any increase in selling price. If anything the proportion of product retail price that is tax will be falling as a result of this change, for those prices that have to be adjusted upwards.

Out of interest, has anyone quit smoking because its 'just too much money'?

Several of my friends have quit smoking for exactly those reasons.

[TheAnimus]

I'm not sure I follow you - aside from VAT, the punitive duty on alcohol isn't a percentage figure AFAIK - it's a fixed price per litre of product (with different rates depending on class of product), so it wouldn't be changed by any increase in selling price. If anything the proportion of product retail price that is tax will be falling as a result of this change, for those prices that have to be adjusted upwards.

Ah, I assumed it was a % like petrol, as I said, I don't know it was just my "how will the government profit from this" sense tingling.

[Zak33]

But this sudden enthusiasm for minimum pricing from supermarkets out of concern over binge drinking strikes me as absolutely two-faced. Do any of them have the balls to do it unilaterally, if they're so damned concerned? Do they hell. That would hit profits and we cant have that, can we?

The supermarkets and their cheap booze are largely responsible for binge drinking in the first place, so it's a bit late to be all pious about it now.

I agree... and NOW they want someone else to stop the price war so they can keep thre sales volume UP and make the price go UP too.. without any of them being the first to do it and possibly lose a week of market leading trading to an opposition.