The Institute of Alcohol Studies Finally Goes Insane

No, really, this is gaga.

Canada reduces boozing by having higher taxes. Therefore we should adopt minimum unit pricing, the system that does not involve higher taxation. These cunts have flipped, haven\’t they?

My comment left at The Guardian:

Dear God this article is bad. So howlingly bad that I\’m not sure whether the author even understands how appallingly bad it is.

Do higher booze prices lead to less boozing? Yes, obviously: demand curves slope downwards. There can be a turning point when something becomes so expensive that everyone goes off and gets the illegal stuff, brewing hooch or whatever, but in general higher prices will lead to lower consumption.

This is just straight Econ 101.

Excellent. So, there are, conceptually, two (at least two) ways that we can make the price of booze higher.

1) We can increase the amount the State takes out of a drink. We could use tax, we could use a distribution monopoly that makes a profit. But the point is that the government, (the state, State, Province, call it what you will) gets a larger chunk of the cash. This both pushes up the prices and increases revenue: that second means that we can decrease the revenue collected from other things. Excellent.

2) We can insist on legislating minimum prices. In this case the price goes up, yes. But the state doesn\’t get any of the extra revenue. That goes to the manufacturers, retailers. Because they must sell it at this minimum price: therefore no competition to reduce prices to attract custom. Thus, minimum pricing, does indeed increase prices (and reduce consumption) but not to the benefit of the state, nor to the reduction of other taxes. But to the benefit of the private sector manufacturers and retailers.

And here\’s where this article (and presumably the report) goes completely gaga. Proof of our Econ 101 concept, that higher prices reduce demand and consumption, is not proof that option 2 is better than option 1. But that is how it is being used: we are being told that higher taxation of booze proves that we should adopt the insane Scottish idea of not having higher taxation on booze.

Professors Stockwell and Thomas gain a F for this paper. Seriously, this logic is just insane. You\’d be marked down in a GCSE paper for even thinking about using such nonsense.

As I say, the cunts have flipped, haven\’t they?

29 thoughts on “The Institute of Alcohol Studies Finally Goes Insane”

  1. It’s going to be worth keeping an eye on that comment thread. If Tim’s comment isn’t taken down for “offending community standards” ( a real possibility, facts being offensive at CiF) it may open an interesting window into CiFers thought processes. There’s already someone up the thread fingering bankers.

  2. As noted above, the IAS is simply a Temperance front. They haven’t “gone” insane. They’re insane by design.

  3. The funniest part is, one of the unspoken (by politicians, that is) reasons for taxes on smokes and booze is the *inelasticity* of demand. It’s a nice reliable revenue raiser for governments. It does reduce consumption, but far slower than the increase in revenue.

    For that reason alone, I doubt that minimum unit pricing will ever be taken seriously. More likely, politicians will cosy up to the campaign, then steal their arguments as justification for jacking up the tax rate instead. Safe in the knowledge that a dedicated base of smokers and boozers like me will grumble but keep paying.

  4. Stockwell and Thomas concluded that “a 10% increase in average minimum prices across all beverage types would result in a 3.4% decrease in total alcohol consumption.”

    Or, to put it another way, a big earner. Provided, of course, you have state control over the market (shudder).

  5. Liquor boards are useful earners for provincial governments, and their finance ministeries usually set them revenue goals. In 2011-12, LCBO sold a total of CAD$4.7bn of booze, generating a CAD$1.63bn dividend for the Ontario government. “This revenue helps pay for healthcare, education and other important services,” it says.

    Better get Ritchie on their case about not paying taxes on their windfall profits 🙂

    However, this illustrates an important point that I make to people when they talk about the cost to the healthcare system of being the chain-smoking boozehound that I am.

    “I’ve paid my share already”

  6. Henry George (of the wrong kind of land value tax fame) came up with a brilliant plan to deal with the “booze problem”: abolish licensing so it is available everywhere ,even at newsstands; reduce duty and price to the minimum, (to make pushing booze unprofitable); make it so cheap that it could only be sold with food and entertainment to make a profit = the legendary caf

  7. Henry George (of the wrong kind of land value tax fame) came up with a brilliant plan to deal with the “booze problem”: abolish licensing so it is available everywhere ,even at newsstands; reduce duty and price to the minimum, (to make pushing booze unprofitable); make it so cheap that it could only be sold with food and entertainment to make a profit = the legendary caf

  8. @DBC
    (drink)could only be sold with food and entertainment to make a profit = the legendary caf
    ……………………..
    Well that’s nothing new. Pretty well standard form for wine bars before licensing hours were relaxed. Drink late if you bought a cheese sandwich for

  9. It’s the pound signs it doesn’t like now!!!

    @DBC
    (drink)could only be sold with food and entertainment to make a profit = the legendary caf
    ……………………..
    Well that’s nothing new. Pretty well standard form for wine bars before licensing hours were relaxed. Drink late if you bought a cheese sandwich for 5 quid (And wasn’t that the wrinkle for drinking on a Sunday in Welsh Wales? ) If you make getting the drink conditional on buying the food the profit will be made on the food. (Good idea about abolishing the tax, though. That part we’ll keep)

    You can see why the man was another advocate of LVT.

  10. @Ian B
    Don’t get the point about supply and demand.(You don’t explain it.)The George plan would massively increase supply (no licensing laws:he thought licensing restricted number of suppliers so they all had enough customers to make money from supplying booze alone).Too many suppliers would reduce prices ( say if you could buy a pint in the barbers).Demand would stay the same but might go up: but not as much as supply.

  11. DBC,

    My point is, supply and demand balance. If too many suppliers enter the market and profit goes negative, the weakest will be eliminated. It’s the whole “supply curve meets the demand curve” thing; which is an idealisation, but the principle is sound.

  12. Too many suppliers would reduce prices

    ……………………………………………………….

    Got a fine test case for that, just down the road. It’s pretty well all bars. And these days, far too few customers. Made damn all difference to prices because that’s not what bars compete on. Because beer isn’t buckets or bicycles. You’re not buying beer, you’re buying drinking the beer. It’s actually some of the bars with the higher prices are doing better, because they’re better places to drink in.

  13. But in HG’s Utopia the suppliers of beer would n’t only be supplying beer. They would be keeping a few bottles by for the odd customer: I know a cinema that does this .They don’t make a living out of beer, but this is exactly the situation that HG was aiming at. He felt that the sole providers were pushing the booze too hard (they had nothing else to sell) and the limited number of licences were pushing too many customers their way .Sounds like in Spain there should be some diversification -if its all bars.
    I can imagine how pissed off Henry George got if people looked this libertarian gift horse in the mouth.
    What chance had he with LVT which is counter intuitive?In fact, he said that it was the liquor interests that lost him elections.

  14. Henry George (of the wrong kind of land value tax fame) came up with a brilliant plan to deal with the “booze problem”: abolish licensing so it is available everywhere ,even at newsstands; reduce duty and price to the minimum, (to make pushing booze unprofitable); make it so cheap that it could only be sold with food and entertainment to make a profit = the legendary caf

    You mean become like Russia?

  15. @DBC Reed
    But in HG’s Utopia the suppliers of beer would n’t only be supplying beer. They would be keeping a few bottles by for the odd customer: I know a cinema that does this .They don’t make a living out of beer, but this is exactly the situation that HG was aiming at. He felt that the sole providers were pushing the booze too hard (they had nothing else to sell) and the limited number of licences were pushing too many customers their way
    …………………………………………………………
    Sounds like Henry George should have got out a bit more often. They’ve had his system here for the last few centuries. And quite a lot of the rest of Europe.
    Where’s he’s probably right is if you allow booze to be ubiquitous, you end up with a culture where alcohol consumption becomes less central. And that’s very specifically *alcohol consumption*, not drinking. Because the two things are different. It’s quite common here to see people taking a brandy with a coffee at 8 in the morning. Motorcycle cops stop at a café I use on chilly mornings for a warmer. You see exactly the same in France with the gendarmerie. Should imagine that’d be a sacking offence in the UK.

  16. @BIS
    Quite. Henry George was an American battling stitched-up party machines where organised booze (he called it the Rum Power for some reason) was calling the political shots.
    The missing end of sentence from my original posting was “the legendary caf

  17. @DBCR
    Francophobe. Doesn’t like accents. Should be reported to someone with a clipboard, probably.

  18. Surreptitious Evil

    That’s probably because your browser is realising that cafe actually has an acute on the final letter and putting it in, not realising that Chez Timmy has a problem with Unicode encoded characters.

  19. Surreptitious Evil

    Should be reported to someone with a clipboard, probably.

    I thought that loathing the French – even while drinking their wine, eating their cheese, holidaying and even living there – was part of the very definition of Englishness?

  20. You’d think you were safe on this the most tecchie- infested blog in creation. How about entrepot or eleve?

  21. How weird. It did a perfectly good e acute a few posts above @#18 off alt gr+e. It’s not even dependably fucked.

  22. I thought that loathing the French – even while drinking their wine, eating their cheese, holidaying and even living there – was part of the very definition of Englishness?

    ……………………….

    Oh no, SE, that’s loathing the English.

  23. P’raps I should explain that one.
    The tendency to utterly despise anyone not exactly the same as they are. And not even being totally sure about their feelings about themselves.

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