Big State Minimum Pricing on Alcohol Just Kicks the Poor

Those who go out to buy drink today, will be in for a big surprise. Though we are talking beers not bears. 

FF/FG/GP — indeed all the Looney Left — have started to wallop the less well off through alcohol minimum pricing.

From this week all alcohol will have a minimum price set by the State, based on the number of grams of alcohol, with one gram costing at least 10c.

It is another Big State (we know best) policy to make people poorer at a time of high inflation, and it will disproportionately impact poorer people. 

Increasing the price of alcohol at least in part, is about the elite of society denying small pleasures to the less well off (whom they secretly despise) while telling them they are doing it for their own good!

Some might say that’s a bit cynical but please note this:

The new system will not affect the price of premium beers etc., but only cheaper brands will go up, with promotional prices to double in some cases. A promotional slab of beer will go from 15 euro to 40 euro. 

It’s all about the virtue signal but the minimum unit price generates serious deadweight loss without actually doing much for anyone positively. 

If you want to raise prices on alcohol, you tax alcohol. That way, the state gets revenue that can be used to compensate for the additional burden on healthcare that those who overdrink cause. 

With minimum pricing, no one wins — The retailers selling alcohol get less money because the price ends up above the profit-maximizing economic equilibrium (yes, they get more per unit, but they get to sell less). Those who consume alcohol have to pay more, so they lose too. And the only thing the state earns under this scheme is VAT, which will be higher since the price is higher, but not by a great deal. 

Compare that to just raising the tax to have the same effect on prices. I’m not saying that would be a good idea, but it would at least be somewhat economically sensible as it would create a source of significant revenue.

Most of the time when the government raises taxes on the poor, it can at least justify this by saying the poor receive a disproportionate share of government aid and services. This time, there is no such justification: The poor will pay because of the minimum unit price, and because it raises so little revenue, they’ll get nothing in return.

The only people the minimum alcohol price scheme may very well help are those that wish to set up a large scale smuggling operation based out of Newry. And of course, just as the government wants to cut down travel, the frequency of travel to the border will increase.

Will anybody benefit from this measure?

This will inevitably increase pub attendance and consumption of alcohol in pubs, since they are largely unaffected by this (their prices were already higher than the minimum price). It’s basic economics: Retailers compete with pubs for alcohol sales. When retail prices go up, drinking in a pub becomes relatively more attractive to consumers. 

The political parties who voted for this deserve to be decimated at the next election.

Inflation, carbon tax and alcohol unit pricing all disproportionately hurt those on lower disposable income. We will stand up to oppose this ill thought-out Big State, small brain measure.