Banning sales of alcohol \”below cost price\”

From the Coalition Programme for Government:

We will ban the sale of alcohol below cost price.

I\’m absolutely certain that they\’ve not thought this through.

So, booze wholesaler goes bust (or offie, pub, supermarket, village shop, whatever).

The liquidator comes in and has to shift the stock swiftly in order to get cash back for creditors before rents and storage costs eat any further into the pittance they\’re going to get.

How do you shift stock quickly? You discount it of course.

This is now illegal.

Think that\’s too extreme?

One of the secrets of the Weathersppon\’s empire is that it\’s got such tremendous throughput that it can take stuff a week or a few days before it goes out of date and yet still sell it, at a bargain price of course, to thirsty drinkers across the land. As they\’re just about the only buyers that can do this and the manufacturer or wholesaler who fucked up can either sell to them or pour it down the drains they pay nothing like \”cost price\” for this booze.

This will now be illegal.

And as a final point: since when has it been Conservative or Liberal policy to stop me losing money by selling my manufactures at absolutely any bloody price I choose to?

Hint: just about nobody pays cost price for their telephones these days, do they?

7 thoughts on “Banning sales of alcohol \”below cost price\””

  1. surely the rule would only apply to retail sales? Inter-company trading, of the sort you have highlighted, would be perfectly legal. Selling the product to consumers below cost, as the supermarkets do, will be unlawful. Seems reasonable.

  2. So the supermarkets will simply push the price reductions back up the chain to the wholesalers or manufacturers. And if you could pass a law saying that manufacturers could never sell anything at a loss you would have found the Holy Grail of economics.

    It’s completely unworkable and inevitably will lead to unforeseen consequences.

  3. Pingback: Longrider » Win Some, Lose Some…

  4. Yes, Jason is right, except for the “seems reasonable” part. The law will just say it’s illegal for a retailer to sell at a lower price than they paid the wholesaler, or manufacturer.

    Totally unreasonable of course, but reason has never stood in the way of the secular evangelicals who’ve been running the country since about 1850. These are people who just made a law protecting cartoon characters from abuse, remember. None of it is rational. None of it stands up to reason. But it doesn’t need to, because it is beyond such challenge.

    We’re still living in the Dark Ages. All this stuff about an age of reason and an enlightenment, it’s bullshit.

  5. As a farmer, (tho not a dairy farmer) perhaps I should encourage the youth of today to drink loads of milk, and go on milk fuelled rampages through town centres across the land. Then perhaps the govt would pass a law saying its illegal to sell milk for less than the cost of production. I reckon dairy farmers would quite fancy such a law.

  6. Er define “below cost”. Having run a few pubs/bars in my time I can I can confidently state that “cost” is a very flexible number even if we ignore the Weatherspoons type options.

    The list price for booze from a supplier may well be X but if a retailer buys more than a given amount in a single order he often gets a discount. He also gets loyalty volume discounts over time, eg for every X hundred units he sells he gets Y free cases.

    Then there’s the specials, the promotions, the end of batch sales, whatever. to be honest booze distributers have more special prices for the same commodity than Indian carpet salesmen.

  7. Think there should be a law of unintended consequences department to review most government suggestions ( probably including the unintended consequences of a law of unintended consequences department)

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