Our beer- drinking friends over in the UK may have to pay a slightly higher price for their favorite bottle of ale if the British government has its way.
According to an article published by the Economist, the British government is considering a minimum price of 45p per unit of beer and the elimination of bulk discounts. If the measure takes effect, a can of strong brew could not be sold for any less than 1.56 pounds and a bottle of wine could not be sold for any less than 4.22 pounds. Government officials claim that this price increase would reduce the incidence of irresponsible drinking, but others say it will do nothing to prevent abusive consumption and that it targets the poor more than anything else.
Alcohol consumption in the United Kingdom has been on the decline for many years, so why is there any need to raise the minimum price per unit? Many feel there isn’t any sound reason for such a change and they point to the increases in profits that will result if such a law takes effect. Retailers will likely win, because even if demand does decline and sales drop slightly, it will likely not be large enough to offset the greater profits. This could then lead some of the suppliers to increase their prices slightly, to better even the profit- taking with the retailers. Then, there is also the chance that the British government will step in and take a larger share of the money to prevent retailers and manufacturers from reaping the benefits of a government- sponsored price change.
Without any ability to cut their prices to make products more appealing, booze manufacturers will likely look for ways to make their products stand out in the crowd. They may eliminate lower priced brands completely and focus more on marketing and dressing up certain products to seem greater than they really are. This already happens to a degree in the United States where the big brewers relentlessly hammer the public with advertisements and marketing intended to make sub- par products seem like something much grander and more prestigious than reality dictates.
Whatever the outcome, if the price limits gain approval, our British brethren could be paying more for the basic bottle of ale. The better, more taste- palatable brands will still cost the same, but the lower- priced brands will no longer represent the bargain they once did. The higher prices will likely affect overall consumption in a small way, but are unlikely to deter the problem drinkers for whom the proposed law is supposedly aimed.
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