Guest Post: Glen Wiggs on Minimum Pricing of Alcohol

Another post by my father Glen Wiggs. In this one he refers to a Scottish study where imposing a minimum price of alcohol did nothing to reduce sales of ready to drink products (sold to younger folk), but did reduce spirits, wine and beer sales. So the older voters get to drink less while the newbie votrers still drink the same

More on Minimum Pricing of Alcohol

The Scottish Government is determined to introduce minimum pricing of alcohol where there would be a minimum price per standard drink unit of alcohol There have been two significant studies by The University of Sheffield. The United Kingdom Department of Health commissioned the first and the Scottish Government commissioned the second. These studies are being used by the Scottish Government to justify the introduction of minimum pricing. The Scottish Government is also keen on a discount ban. The New Zealand Law Commission are giving strong consideration to both minimum pricing and discount bans in their review if the liquor laws.

The second University of Sheffield study, which was released a month ago, http://www.scotland.gov.uk/Publications/2009/09/24131201/0 assessed both the impact of discount bans and minimum price on consumption. The study used epidemiological and econometric models and therefore in the formulation of the models made a number of assumptions. The conclusions are therefore theoretical and it would it would be risky to base policy on the study.

The study claims that there would be a reduction in consumption in different types of drink in different proportions. Page 76 has a graph with examples, which is reproduced.

U sheffield

A 70p (about $1.60, which would make the minimum price for a bottle of Heineken $2.08) per unit minimum price with or without a discount ban is estimated to reduce spirits consumption by 40%, beer by 10%, wine without a discount ban by 17% and with a discount ban by 20%. But note that there would be virtually no reduction in consumption of RTDs. We question whether this is a desired social outcome as RTDs are popular with younger drinkers.

In the 2007-08 ALAC Alcohol Monitor 35% of drink types consumed by youth 12-17 were RTDs, but of youth Binge Drinkers 51% drank RTDs. A minimum price policy is likely to incentivise young drinkers to drink greater numbers of RTDs. Clearly a minimum price policy in New Zealand is likely to increase inappropriate drinking by youth rather than curtailing it.

Glen Wiggs

Director

Foundation for Advertising Research

Adjunct Professor of Advertising Regulation

University of the Sunshine Coast, Queensland

About Lance Wiggs

@lancewiggs
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2 Responses to Guest Post: Glen Wiggs on Minimum Pricing of Alcohol

  1. Falafulu Fisi says:

    This shows that prohibition doesn’t work. When are politicians and nanny-state worshippers going to wake up and realize that trying to ban alcohol consumption either by directly prohibiting it from sales or raising its minimum prize is not going to stop consumers from buying it. Didn’t they learn from the failed alcohol prohibitions of the 1930s? Politicians should leave the market to regulate its own via setting the prices itself rather than imposed via legislation. Alcohol consumption is a personal responsibility thing and the government should butt out of trying to run people’s life.

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  2. gordy says:

    I doubt your father is impressed by your proof reading skills. “Geln”?

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