Bastards

Minimum alcohol pricing – bloody arseholes – and I say that in a professional and personal capacity.

The pricing of alcohol at 40p a unit, given modern booze taxes (about £1.90 on a bottle of wine), amounts to a ban on loss leaders. In other words, it solves a coordination problem for supermarkets. This is one reasons Tesco supports minimum pricing; they no longer have to sacrifice margin to attract customers from Sainsbury’s etc.

So, what we have is a transfer of wealth from most people who drink, but especially from heavy and thrifty drinkers, to supermarkets’ bosses and shareholders. Interestingly, given supermarkets’ size and prominence, this means it is a transfer of wealth to people with private pensions which will tend to be at least somewhat invested in supermarket stock.

Three conclusions:

  1. This should stunt innovation at the bottom end of the booze market, so never expect to stumble upon a cheap but actually very nice drink again.
  2. Setting up a bureaucracy to enforce a minimum price is more costly financially and politically than increasing the price of that floor – so don’t expect the 40p limit to last long. Swedish beer prices here we come.
  3. More importantly, distributionally, this cannot but be a transfer from the very poorest people who have no pension to people on middle and higher incomes who do, however pitiful their provision.

Slow hand clap for the Tories – combining socialism for the rich; innovation stunting regulation and the shittiest part of Scandinavia since their post-war embrace of eugenics.

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4 thoughts on “Bastards

  1. The best thing about it is that minimum pricing doesn’t even work in Sweden: everybody still binge drinks there, and maybe even more because they can only afford to do it once a month as opposed to weekly.

  2. I forgot I had a small swedish/british following. Thanks! The degree of dangerous drinking has always seemed cultural, north of the mosel people like binging, south they like drinking with food. Vive la difference.

  3. I foresee a golden age for home brewing.

    (Not that 40p a unit is a big deal from where I’m sitting… Even my cooking brandy cost more than that.)

  4. No, this shan’t effect me too much, but it will effect my ability to drink cheap things in the sun, which was what I was planning on doing all summer…

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