Minimum Unit Pricing

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Minimum Unit Pricing

Postby Pootleflump » 26 Apr 2018, 21:18

Ok, so it's not often her Flumpiness gets serious, but this is a debate that interests me professionally and personally.

On Tuesday, following a series of legal challenges, Scotland becomes the first country in the world to implement a minimum unit price for alcohol. From 1st May, no alcohol in Scotland will be sold for less than 50p per unit.

The rationale is simple. Alcohol is 60% more affordable than it was 30 years ago. Currently you can buy a 3 litre bottle of cider for £3.99, the equivalent of 18p per unit. When something becomes more affordable, people buy more of it. Scots drink more than the English and Welsh and our death rates are twice as high.

It is argued that minimum pricing will be particularly effective at reducing the amount of alcohol drunk by harmful drinkers as they tend to buy the cheaper (cost per unit) alcohol that is affected by minium pricing (strong cider, super-strength lager, own brand vodka and gin). It is certainly a policy that will affect poorer households disproportionately.

Predictive modelling suggests in its first year alone, minimum unit pricing will save 58 lives and reduce hospital admissions by 1,299. The British Medical Association have always been staunch supporters of the policy.

Sound good?

So here's the controversy (in my head anyway):

There is a context around harmful drinking, often linked with mental health, psychological vulnerability, adverse life experiences and childhood trauma. The extra money being levied is not going into support services or being used to mitigate the causes or consequences. It's being levied from those who can't afford it and being given STRAIGHT TO THE RETAILERS. Mental health services have always been underfunded, compared to physical health services. In real terms, budgets, services and resources continue to be slashed.

A person's position in society plays an important part in their resilience and mental health. Less advantaged people have a greater experience of poor physical and mental health. This policy does nothing to address the wider determinants - the social, environmental, financial or cultural barriers which stop people being able to make use of opportunities to enhance their health, wellbeing or life opportunities.

What we have is another tax on the poor which is going straight into the pockets of the supermarket giants and a widening of the gap.

Discuss.... as you open your bottle of Laphroaig :D
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Re: Minimum Unit Pricing

Postby NJLonghorn » 26 Apr 2018, 21:38

Models like this always leave out the black-market effect. If alcohol can be made and sold economically for 20p/unit, but can't legally be sold for less than 50p/unit, it will be sold illegally for, say, 35p per unit. The resulting crime (and police reaction to the crime) will lead to more deaths and costs than the alcohol use itself.

As you allude to in your post, the only viable approach to all of this is to buttress education, counseling, support, job training, etc.

That said, as an investor in a super-market chain, I'm all for the proposed policy. :mrgreen:
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Re: Minimum Unit Pricing

Postby Woolgie » 26 Apr 2018, 21:46

There’s no denying that minimum pricing (I.e. huge tax) on cigarettes caused a reduction in usage. But it wasn’t vast. A much greater reduction was generated by the advance of e-cigs.

In a free market I am very much against price setting, particularly as it affects the large proportion of people who already do not use a product in excess, but will now be hit in the wallet anyway. If we want to target a particular group of people with a restriction (which is what this is, it’s restricting use) then why not license alcohol purchasing on Doctor’s orders?

People want free health care in this country, well a veto over chemical consumption IS health care. But people won’t‘swallow’ that ;) They want free will and someone to save them later.
Last edited by Woolgie on 26 Apr 2018, 21:54, edited 2 times in total.
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Re: Minimum Unit Pricing

Postby NoPunIn10Did » 26 Apr 2018, 21:48

Pootleflump wrote:It's being levied from those who can't afford it and being given STRAIGHT TO THE RETAILERS.


At first, this will be the case, but demand isn't static. If the minimum price is above the sweet spot for sales velocity and elasticity of demand, then overall it will lead to less alcohol purchases and therefore less profit for both the retailers and the manufacturers.

What tends to happen in a regime of minimum price on luxury goods is that it drives out low-quality competitors that would otherwise flood the market with inferior product. If customers have to pay X amount to buy alcohol anyway, they're less likely to buy the really terrible stuff that could only otherwise compete on price-per-drink.

It's unlikely to behave as much like a tax on the poor as you might think.

If someone truly is such an addict that they spend all their income on booze, then they will probably continue to do so (just with less of it). Less constant consumption could in turn lead to less physical dependency and an overall net positive for their health.

Making addictive drugs less convenient to buy (while not prohibiting them completely) tends to have an overall positive effect on public health. It doesn't put money in the coffers of mental health services, but it cuts down on the degree to which their resources are underfunded.
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Re: Minimum Unit Pricing

Postby NoPunIn10Did » 26 Apr 2018, 21:50

Woolgie wrote:There’s no denying that minimum pricing (I.e. huge tax) on cigarettes caused a reduction in usage. But it wasn’t vast. A much greater reduction was generated by the advance of e-cigs.


While the e-cig market is probably the most responsible for switching users away from old-school tobacco, there is evidence that price differences lead to reduction in usage.

https://academic.oup.com/ntr/article/16 ... 10/1220471
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Re: Minimum Unit Pricing

Postby NoPunIn10Did » 26 Apr 2018, 21:55

NJLonghorn wrote:Models like this always leave out the black-market effect. If alcohol can be made and sold economically for 20p/unit, but can't legally be sold for less than 50p/unit, it will be sold illegally for, say, 35p per unit.


Illegal sales come with their own costs, however. The added risk that comes from participating in a black market versus a regulated market eventually becomes a semi-measurable number. Add to that the inherently smaller customer base that's willing to buy from the black market (and as such can nix the benefit of volume pricing).

So long as the minimum pricing isn't too high (compared to the base costs), it's nontrivial for black marketeers to turn a profit by undercutting that price.
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Re: Minimum Unit Pricing

Postby Strategus » 26 Apr 2018, 22:48

I shink it dishadvantagesh she rich. Becaushe shey can afford she boosghe when it goesh up in prische. Am I making schenche? You underschtadche?
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Re: Minimum Unit Pricing

Postby Pootleflump » 26 Apr 2018, 23:08

Ha ha ha ha

Just as well important decisions about the cost of alcohol and deep-fried mars bars are devolved from Westminster to the Scottish Parliament.

When Mimimum Unit Pricing of Alcohol hits England, GPD will need to sell both his kidneys and possibly a lung to fund his habit. ;)
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Re: Minimum Unit Pricing

Postby Strategus » 26 Apr 2018, 23:11

Schlitt!
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Re: Minimum Unit Pricing

Postby V » 26 Apr 2018, 23:55

Theft is primarily illegal, because governments don’t appreciate competition:-)

A more serious comment. I don’t think this change has any chance of improving any aspect of alcohol abuse. Drug abuse is a challenging issue best addressed by medical professionals (not legislators, not law enforcement officers, not courtrooms, not correctional institution staff, or now apparently excise employees). It might take a while before this is generally accepted as the truth, but it’s still true already.
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