Alcohol price floor will hurt the poor

by Hugh MacIntyre - 09/01/2010

Scotland is debating creating a price floor on the cheaper alcoholic drinks. Heavy drinking in Scotland is pretty common (not just a stereotype), and there are those who feel that this should be stopped: specifically the governing Scottish Nationalist Party wants to stop the “social plague” of heavy drinking.

There isn’t much of a chance of success.

Opposition parties in Scotland have correctly pointed out that a price floor will likely violate EU competition rules. This makes me feel warm and fuzzy towards the EU (which is a change), but there is a more crucial problem:

People who drink a lot really like drinking.

How likely do you think it is that perpetual drinkers will really change their life style because alcohol is more expensive? Remember that drinking in Scotland is not just a pass time; it is a way of life. There are people here that revolve their whole life around having pints with their friends. So do you really think that they will drink significantly less?

The reality is that this policy is going to hurt the poor. It is usually the poorer members of society that drink more than everyone else. It is also in the poorer communities where the culture of drinking is stronger. So they are also the least likely to change their habits after a price increase.

What will a price floor thus accomplish?

It will mean the weakening of the poor’s purchasing power as they pay more for the same product.

Good idea, eh?