Really Stupid Ideas #1
Jun. 2nd, 2010 11:32 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
drploktaFirst in an occasional series pointing out why ideas that are under discussion are stupid.
Today, we look at setting a minimum price per unit for alcohol. This is a stupid idea because it immediately turns (formerly) cheap booze into a massively profitable line for the supermarkets, with no price competition to worry about. This means that they will spend tens of millions promoting it, and sales may even increase.
The smart thing to do instead is to increase tax, bring tax levels more into line with alcohol content, and perhaps prohibit selling alcohol at below cost price as the government is proposing (although this, while not actively stupid, is very difficult since the government has no way to find out what cost price is).
Today, we look at setting a minimum price per unit for alcohol. This is a stupid idea because it immediately turns (formerly) cheap booze into a massively profitable line for the supermarkets, with no price competition to worry about. This means that they will spend tens of millions promoting it, and sales may even increase.
The smart thing to do instead is to increase tax, bring tax levels more into line with alcohol content, and perhaps prohibit selling alcohol at below cost price as the government is proposing (although this, while not actively stupid, is very difficult since the government has no way to find out what cost price is).