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UK Wants to Outlaw Cheap Alcohol to Lower Binge Drinking Rates

Posted in Binge Drinking

In an effort to fight binge drinking, the government of the United Kingdom (UK) is expected to outline a national minimum cost for wine, beer, and hard alcohol in the coming weeks. Given that makeshift "sober huts" (tents manned by emergency medical personnel to help treat intoxicated partygoers) typically dot the landscape during New Year’s Eve in the UK, any mechanism designed to combat the nation’s rampant alcoholism can only be seen as a step in the right direction.

The idea for a liquor minimum price comes just as the city of Manchester released a plan aimed at lowering alcohol-related hospital admissions. Manchester plans to set a price of seventy-five cents for a unit of alcohol – or $7.00 a bottle – and allows for review of the per unit minimum on an annual basis. The Manchester plan hopes to abolish frequent-visitor cards that are sponsored by area pubs. Violation of the Manchester law means a $750 fine. In addition, the unit of alcohol content of all drinks must be clearly stated; all loyalty or discount programs must be terminated.

The government plans to utilize the same formula that the Asda supermarket chain uses when setting minimum prices for alcohol. The minimum sales price is calculated by adding the cost of duty to the UK value added tax (VAT). For instance, a one liter bottle of rum would need a price tag of no less than $15; twenty cans of beer must be sold for at least $13.00. Penalties for violating the new law could include loss of liquor licenses.

Apparently, selling alcohol at huge losses is not a rare occurrence in the UK. The practice of "loss leading" is when merchants sell a good at a low or below-cost price in order to attract customers who will likely buy other, more profitable goods. However, alcohol is a particularly dangerous choice in loss-leader as it is a highly addictive substance that, if consumed excessively, can have adverse health and societal effects. UK retailers have, historically, been unsympathetic toward the arguments against loss-leading with alcohol, arguing for free competition and customer choice.

Although anti-alcohol advocacy has been successful at reducing the number of happy hours and "all you can drink" specials offered by UK drinking establishments, binge drinking is more rampant than ever. The practice of alcohol loss-leading has resulted in a pattern of drinking at home prior to a night on the town for many UK adults as it allows them to get more bang for their buck. As a result, many end up consuming more alcohol in an evening than they would if they had to pay pub prices for the entire evening consumption.

Leaders across the UK welcome a national alcohol minimum cost scheme and estimate that it could reduce hospital admissions by five thousand per year. However, the Scottish parliament recently vetoed a plan for a seventy-cent minimum cost per unit.

Not surprisingly, supermarket chains have reacted negatively toward the Manchester regulation and have been vocal in advising customers to visit surrounding cities and towns to obtain lower prices. On the other hand, medical professionals argue that the proposed laws do not go far enough to combat heavy drinking.