Dylan Reeve blogs on Labour's proposal to legislate the price of alcohol:
Labour has announced that it intends to seek to amend the Alcohol Law Reform Bill to allow for minimum pricing to be enforced. This was something that featured in Labour's policy before the election (although it wasn't a bullet point they ever brought up). There's no indication of how Labour would implement the idea or what the cost implications would be.
The problem that this will supposedly address is related to binge drinking and alcohol related disorder in NZ. The idea being that people (young people) are "pre-loading" on cheap booze before going into town. The simplistic solution then? Make booze more expensive.
The scapegoats in this argument are usually either "alcopops" (premixed drinks) and discount wine (usually from supermarkets). By imposing minimum pricing, the argument goes, you increase the cost and thus decrease the appeal and availability of those type of drinking.
This, like Labour's GST-free fruit and vege policy, is short-sighted and unoriginal. They are taking aim at very simple parts of very complex issues and attempting to attack them in broad and blunt way.
Whilst we are sure that the preponderance of cheap spirits and RTD's is a factor in teenage binge drinking, we agree with Mr Reeve that Labour's approach to this issue is simplistic. It seem to be policy made on the hoof, and that's generally bad policy.
So far we have only two clues really about what Labour might be imagining for this law. The first is a quote today from Labour's Charles Chauvel, "If instead of being able to buy a bottle of cheap wine for $6 from the supermarket, a minimum pricing regime puts that up to 12, 13 or 14 dollars then it's much harder people to lay their hands on cheap booze."
The second is a ballpark figure tossed around by Lianne Dalziel in discussion of alcohol law reform late last year where she mentioned "$2 per standard drink" - this would possibly line up with Chauvel's estimate as a bottle of wine is usually between 6 and 8 standard drinks.
But the whole idea seems fatally flawed really. We're talking about people who are presumably getting drink then heading into town and buying a few drinks while out. Is the price rise going to stop them? They'll still buy the cheapest booze and it's not going to cost a lot more. Assuming that 6-8 drinks is enough to get you happily drunk then we're looking at only $12-16 which isn't much compared to the $5-10 per drink you'd expect to pay in a bar. Sure, it's more than the maybe $6-10 to get drunk now, but it's hardly the sort of price hike that'll change behaviour.
Instead the people who suffer are the rest of us who buy wine, beer and spirits to enjoy responsibly. Chances are we're not buying the cheapest products on the shelf now, but if the bottom shelf goes up in price then it seems certain that rest of the market will trend upward too. After all, if a budget bottle of wine is $7 now, but will be $14 in the future, then the mid-range $15 bottle is hardly going to stay that price.
This flaw is precisely the same as the major flaw in Labour's desire to see the minimum wage rise to $15 per hour. It would be sustainable if it was only going to apply to workers on the minimum wage, but of course it won't. There are margins between different jobs for good reason; people are paid what they are deemed to be worth to the company that employs them.
If we employed staff on the minimum wage (we don't; most of our 40-plus staff earn way more than that) and we were mandated to give them a 15% increase, we would have a moral obligation to apply that increase right up the food chain. And for our business, an immediate increase of $150,000 per annum in salaries and wages would be unsustainable, so we would probably have to find a way to do without two or three staff members. Who wins there?
Labour's suggestion is far too simplistic to get off the ground. In fact it's so simplistic that we wonder why someone in Labour's brains trust hasn't spotted the fatal flaw that Dylan Reeve refers to, and thrown the policy papers in the shredder.
Surely Labour can come up with a more cogent policy than this. Surely?