Prime Minister John Key has defended the Government’s decision not to include a minimum price in the alcohol reform legislation.
The Alcohol Reform Bill, which was reported back from select committee yesterday, allows for the collection of data needed to set a minimum price but does not go as far as saying one will be brought in.
The Law Commission identified price as a factor in the problem of binge drinking and recommended this investigation into minimum pricing, with an interim 50% increase in excise tax.
The results from the various modelling exercises all show strong support for the
introduction of a minimum price regime. When “minimum prices” were set below
or at the low end of the purchasing price points they had little impact on reducing
harmful outcomes. But as the level set for a minimum price increases, alcohol-related
hospital deaths and admissions fall, as do alcohol-related crimes.
Young and heavy drinkers prefer lower
cost products, so policies such as minimum pricing (and, less directly, excise tax
increases) which preferentially target low cost alcohol and in particular cheap
or discounted takeaway liquor will affect harmful drinkers proportionately more
than moderate drinkers.
It also mentions ‘loss-leading’ wherein retailers – ie the supermarket duopoly – sell alcohol at below cost to attract customers and increase the prices of products like fruit, vegetables and dairy to offset the loss.
So if we don’t have policies that address this practise, what happens after the election when this government rolls out their benefit card? It seems likely that the only outlets that will update their sales software for the benefit of a few thousand customers will be the supermarkets – so we’ll have policy settings in which the poorest people in the entire country are locked into buying their groceries from outlets that charge a premium to offset the sale of their alcohol – which the beneficiaries won’t be able to buy. So . . . under-age beneficiaries will be subsiding low cost alcohol for the rest of the community?
Surely I’ve made some logical error here?