This week's Scottish government proposal for a minimum price for alcohol of 45p a unit is likely to unleash a new wave of legislation as politicians around the world vie for credit in saving lives. The impact of regulatory interference will change the dynamics of local shops.
If the proposal goes ahead, the Scottish government expects that retailers will gain an extra £90 million plus a year in revenues. What it does not know is whether this will stick with the retailer or by grabbed by the manufacturer. Its assumptions also assume that people will continue to buy alcohol in the usual places.
However, from the world of tobacco, retailers can see several issues that the Scottish government ignores. Firstly, by creating an articificial price for a product, legislators create a business opportunity for people who work outside the law. The bigger the differential, the bigger the opportunity.
At 45p, the politicians think they might reduce consumption by 4.7 per cent. However, they already have a chart which projects an 18.9 per cent reduction at 70p. If the 45p plan works, you may be sure that they will be back next year to rachet the minimum price up.
If drinkers choose to buy from car boot sales or from their neighbours then local shops loose out - and they become more likely targets for criminals seeking free stock to sell on.
A second impact is on margins, where independent local retailers have little clout with major drinks companies. If Tesco is able to secure a profit advantage on alcohol sales, it will be a further blow for local shops.
The intentions of the politicians are good but the means of achieving a reduction in alcohol abuse have dangers that are often not spelled out.
"We're taking decisive action, including proposals to introduce a minimum price per unit, which would bring these pocket money prices to an end," said Health Secretary Nicola Sturgeon.
It is clever language that will win public support. There is little cost for politicians. For local retailers, there could be huge cost. However, getting that cost understood by MPs and the public will be difficult when policy is being set on sound-bites.
If the proposal goes ahead, the Scottish government expects that retailers will gain an extra £90 million plus a year in revenues. What it does not know is whether this will stick with the retailer or by grabbed by the manufacturer. Its assumptions also assume that people will continue to buy alcohol in the usual places.
However, from the world of tobacco, retailers can see several issues that the Scottish government ignores. Firstly, by creating an articificial price for a product, legislators create a business opportunity for people who work outside the law. The bigger the differential, the bigger the opportunity.
At 45p, the politicians think they might reduce consumption by 4.7 per cent. However, they already have a chart which projects an 18.9 per cent reduction at 70p. If the 45p plan works, you may be sure that they will be back next year to rachet the minimum price up.
If drinkers choose to buy from car boot sales or from their neighbours then local shops loose out - and they become more likely targets for criminals seeking free stock to sell on.
A second impact is on margins, where independent local retailers have little clout with major drinks companies. If Tesco is able to secure a profit advantage on alcohol sales, it will be a further blow for local shops.
The intentions of the politicians are good but the means of achieving a reduction in alcohol abuse have dangers that are often not spelled out.
"We're taking decisive action, including proposals to introduce a minimum price per unit, which would bring these pocket money prices to an end," said Health Secretary Nicola Sturgeon.
It is clever language that will win public support. There is little cost for politicians. For local retailers, there could be huge cost. However, getting that cost understood by MPs and the public will be difficult when policy is being set on sound-bites.
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