![]() The margin on the premium product goes from being 86% more to 48% less than the cheaper product. If the mainstream wine price remained unchanged, then the price premium to the consumer has dropped by 75%. Consider the situation of the cheapest wine at £2.99 per bottle and the more mainstream wine at £4.99.Įven at 50p a unit, the cheap wine is still cheaper than the mainstream one. One direct consequence will cause a rise in the price of drinks already over the minimum price. This will create very perverse incentives for the retailer. Suddenly a 3 litre bottle of cheap cider will have the highest profit margins not just in absolute, but also in percentage terms. A minimum price for alcohol will invert this position. The way prices work is that premium products have not just premium prices, but larger profit margins both in absolute and in percentage terms. It will dramatically impact the retail prices, in both small off-licences and the supermarkets. This will not affect the cost in the pubs and clubs, where the cheapest pint of standard lager is around twice this level. The proposal it to impose a minimum retail price per unit of alcohol of about 40p to 50p. Yet none really understand the harm that it will cause to society. This has long been touted by the last Labour Government, the BMA and David Cameron. The policy proposed is again a minimum price for alcohol. However, if economic price incentives are involved, then one should also look at the unintended consequences. I also believe that if there were ways to improve this situation, then they should be enacted. Before anybody gets the wrong idea, I support their concern about binge drinking, especially amongst minors. This is why I strongly oppose the latest report from Alcohol Concern “ Binge – Drinking to get drunk: Influences on young adult drinking behaviours“. I also strongly oppose policy being enacted which will be to the net detriment of society as a whole.
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