We do love this latest attempt at justifying minimum alcohol prices:
Minimum alcohol pricing of 45 pence per unit would be 50 times more effective in targetting harmful drinking than current policies which only ban the selling of alcohol as a loss leader, research suggests.
Researchers at the University of Sheffield compared the effects of the two policies on public health using a mathematical model alongside General Lifestyle Survey data to estimate changes in alcohol consumption, spending, and related health harms among adults.
What did that model look at?
In their findings, published by, they estimated that below cost selling would increase the price of just 0.7 per cent of alcohol units sold in England, whereas a minimum unit pricing of 45p would increase the price of 23.2 per cent of units sold.
They estimated that below cost selling would reduce harmful drinkers’ mean annual consumption by just 0.08 per cent – or around three units per year. By contrast, a 45 pence minimum unit price would reduce consumption by 3.7 per cent or 137 units a year – a 45 times greater effect.
So they plugged the price change into their estimate of the elasticity of demand and found that….wait for it, wait for it….higher prices reduce demand and or consumption?
Gosh, do we really need a team of highly trained and expensive alcohol researchers to tell us that?
Unfortunately this latest paper fails to tell us the three things we’d actually like to know about minimum alcohol pricing.
This first being should we be attempting to reduce consumption in the first place? Current levels of booze taxation more than cover the public costs of boozing. There are, indeed, substantial private costs remaining: but those are being carried by the people doing the boozing which is just where they should be. Is there actually a reason or justification left for public policy action in this case?
The second is whether that rise in prices actually reduces harmful drinking, or just deters the occasional tippler from a small pleasure. There is, after all, fairly convincing evidence that the addict will always feed their addiction while the diletante is more amenable to price signals.
And thirdly, even if the above can be answered in a manner that leads to our wanting to increase the price, why on earth would anyone want to have minimum pricing? Not only is it illegal under EU law but it puts the extra cash into the hands of the retailers and manufacturers. Rather than into the Treasury as would be the case if prices were raised through higher taxation. Minimum alcohol pricing just doesn’t make sense.