Friday, November 16, 2012

Cheap plonk

It's not crazy to argue for the combination of a lower alcohol excise tax and a minimum per-unit price for alcohol if harm-causing drinkers disproportionately choose the cheapest plonk while moderate drinkers choose more expensive drinks. The anti-alcohol lobby likes to point out that moderate drinkers on average choose more expensive beverages, but this really doesn't tell us anything without a correction for income - if heavy drinkers disproportionately come from poorer cohorts, and if poorer people of all drinking intensities choose cheaper products, then income cohort effects confound things.

Consider though the Lindauer Rose, a bubbly that often retails around the $9 mark. It's 12% alcohol, so it's around 7 standard drinks. Labour's preferred $1.50 or $2 per standard drink minimum price would bind on the Lindauer Rose. Cheap plonk consumed by harmful drinkers? Or an Air New Zealand Wine Awards Gold Medal winner?

If the cheaper alcohol categories include nicer drops very plausibly chosen by moderate drinkers on a budget (or even ones at which I'd turn up my nose, so long as preference heterogeneity is allowed), we really really need to worry about harms imposed on moderate drinkers when weighing the effects of minimum pricing on harmful drinking.

1 comment:

  1. The minimum price idea comes from Scotland, where they have some serious problems with people getting as drunk as possible for as little as possible as often as possible. It is still in trial mode. I expect it to be of some use IF part of a parcel of reforms which focus on the drunks and provides sanctions for their behaviour and the chance for rehab. Given the probable costs this would involve I'll be the one not holding his breath.
    James

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