Minimum Price per Unit for Alcohol Purchases - Essay Example

Minimum price per unit for alcohol purchases Introduction Alcoholism is growing day by day among people all over the world. Dissatisfactions and dejections are growing more and more among current population because of various reasons. Alcohol has the ability to dissolve the dissatisfactions and pains of the people at least for a temporary period. As a result of that dissatisfied people are taking shelter in alcoholism. “An alcoholic is a person, while alcoholism is the illness. Alcoholics are obsessed with alcohol and cannot control how much they consume, even if it is causing serious problems at home, work, and financially” (What Is An Alcoholic? What Is Alcoholism?, 2009). Compared to people in other parts of the world, UK people consume more volumes of alcohol. “Last year, Cameron’s administration reported 1 million alcohol-related violent crimes and 1.2 million alcohol-induced hospital admissions. It’s a significant number, given the UK’s total population of 63 million lads and lassies”(Breene, 2012). It should be noted that alcohol addiction beyond certain limits may cause huge physical and mental health problems. It may increase the risk of short and long-term health problems such as heart and liver disease, some cancers, pancreatitis and diabetes (Morton& Tighe, 2011, p.296). Moreover, binge drinking has the potential to cause many social problems also. It is not necessary that the consequences of alcoholism may limit to the drinker or his family alone. Even innocent people may suffer the consequences of one’s drinking habit. For example, it is quite possible that driving under the influence of alcohol may cause road accidents and innocent people may lose their lives. The third problem generated by uncontrolled alcoholism is related economy. Over expenditure for alcohol drinks may cause financial problems to the drinker’s family. UK population is already struggling because of the ongoing recession problems. Under such circumstances, wastage of money for alcohol drinks may cause more financial problems to ordinary people and their families. In short, it is impossible for a government which is working for the wellbeing of the people to stay silent when binge drinking increases in the country. The introduction of a minimum price per unit of alcohol policy was introduced by the UK government to reduce alcoholism in UK. According to Lonsdale et al., (2012), “The introduction of a minimum price per unit of alcohol policy has been proposed as a means to reduce UK alcohol consumption. However, there is little in-depth research investigating public attitudes and beliefs regarding a minimum pricing policy” (p.1). “Minimum pricing” of alcoholic drinks has been generated mixed feelings among the public. Some people argue that this pricing policy would help the government to set minimum prices to alcohol and ban the sale of alcohol below the actual cost price. On the other hand, many others have scepticism about this policy. In their opinion, the effect of this policy will occur only for already very low priced products in supermarkets and bars, and that the vast majority of products already priced above the minimum will be unaffected. In other words, the principles of this policy would stay only on papers and in practice it is difficult to implement it. This paper critically analyses the minimum price per unit of alcohol policy introduced by UK government recently. Definition of the minimum price per unit policy The minimum price per unit policy “is the plan to introduce a minimum price per unit of alcohol in England and Wales, with 40p per unit set as an illustrative rate. The average price for those with incomes below £10,000 per year is around 42p per unit, compared to 51p for those above £60,000” (Leicester and OConnell, 2012). In other words, this policy is intended to provide alcoholic drinks based on the income of the people. Poor people get alcoholic drinks for less rates whereas rich people should pay more prices for every drink they purchase from the shops. “Households consuming fewer than 7 units of alcohol per adult per week pay almost 49p per unit, compared to 41p for those consuming more than 35 units” (Leicester and OConnell, 2012). In short, this policy affects not only heavy drinkers with low income but also moderate consumers. The table given below shows; how this policy would affect the prices of different alcoholic drinks. (Leicester and OConnell, 2012) Many people have the illusion that minimum price per unit policy and discount ban are same policies as far as alcoholism is concerned. Even though these two policies are similar in principles, they are different in practice. It should be noted that only cheap alcoholic drinks can be sold on discounted prices. No beverage dealer wants to sell his products below the actual cost price. Even after, discounting, the dealer is getting profits out of the selling of cheap alcoholic drinks. Cheap alcoholic drinks are extremely dangerous compared to other alcoholic drinks. “Buy one, get one free” is one of the major sales promotions conducted by the beverage dealers to attract middle class consumers. “The point of having a minimum unit price rather than, say, increasing taxation, is that you can target the shops that deliberately sell very strong drink very cheaply (Brown, 2012). Justness of the minimum price per unit policy According to economic theories and principles, supply, demand and prices of commodities are interlinked in the market. “The law of demand states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good. In other words, the higher the price, the lower the quantity demanded” (Marshall, n.d.) (Marshall, n.d.) When demand increases, the price of a commodity increases. Same way when price increases, the demand of a commodity decreases. In other words, keeping the price at a higher level is desirable to keep the demand of a commodity to minimum. Nobody wants to keep the demand of a commodity to minimum if the commodity delivers better things to the people. On the other hand, everybody likes to see the demand of a commodity getting lowered, if the commodity delivers only harmful effects in a society. Alcohol is a commodity which delivers only negative effects to a society and hence reduction of its demand in the market will be welcomed by the general public. In short, substance use more generally raises under conditions of increased availability/decreased price, and vice versa. Under such circumstances, the minimum price per unit policy would definitely help the government to keep the demand of alcoholic drinks under control. UK government believes that “minimum pricing will reduce alcohol consumption by 3.3 per cent. It will cut the number of crimes by 5,000 a year and hospital admissions by 24,000, while there would be 700 fewer alcohol-linked deaths each year”(Brown, 2012). UK is a country in which crime rates are growing every year. Psychologists and sociologists in UK believe that alcoholism is a major reason behind the increasing crime rate in UK. According to a study by Institute of alcoholic Studies (IAS), “Alcohol is associated with a wide range of offences ranging from minor public order offences, which are anti-social by nature, through traffic offences, minor assaults, serious assaults to murder” (Alcohol-related crime and Disorder, n.d., p.3). In a civilized society like ours, alcoholism or binge drinking is a social evil which cause the destruction of morals and ideals in the society. Under the influence of alcohol, people lose the ability of rational thinking. Lack of rational thinking motivates people to engage in crazy activities and unethical or immoral life styles. For example, teenage pregnancy or unwanted pregnancy is growing day by day in UK. One of the major reasons of such pregnancies is alcoholism. Under the influence of alcohol, teenagers lose their wisdom and they experiment unsafe sexual activities. They are unaware of the consequences of such activities when they happen to be under the control of alcoholism. Such people will curse their life later. A momentary lapse of control over emotions as a result of alcoholism may cost the entire life of a person. In short, reduction of alcoholism is not only an individual need but also a social need. “The purpose of minimum unit pricing is to reduce excessive alcohol consumption, particularly by the most hazardous and harmful drinkers who tend to show a preference for the cheapest alcohol products. Unlike moderate drinkers, they are less likely to switch to cheaper drinks, if prices rise”(Woodhouse and Ward, 2013, p.10). It should be noted that ordinary people in UK are currently struggling to balance their family budgets. The ongoing recession has caused huge financial problems in ordinary families even though it caused less problems to the wealthy people. Ordinary people in UK were forced to cut down their expenditure on unnecessary or unwanted items. The minimum price policy would shut down all illegal sources of alcoholic drinks. Moreover, this policy would reduce the availability of cheap liquor in UK. “We know that whenever alcohols too cheap, people die. This policy is about getting rid of the alcohol thats being retailed around 22p a unit, thats the alcohol thats killing people and causing carnage” (Siddique & Wintour, 2013) In short, this policy would definitely create more financial burden upon drinkers from ordinary families and they will be forced to reduce their drinking expenditure. “Crucially, evidence enables researchers to estimate in a statistically robust way (as set out in the Impact Assessment) that harmful drinkers in particular reduce their consumption more as a result of a minimum unit price set at a proportionate level than moderate drinkers” (Woodhouse and Ward, 2013, p.10). “In developing this strategy, the government considered the best available evidence about appropriate policies and interventions that are needed both to reduce drinking levels in individuals and reduce the damage to families and communities that alcohol can cause” (Independent alcohol strategy released by coalition of health bodies, 2013). The major objective of this policy is to reduce the number of irresponsible drinkers and to reduce the amount of illicit and cheap quality liquor flowing across UK. In UK like extremely cold countries, it is illogical to ban liquor completely. At the same time, government cannot stay silent when alcohol induced unfavourable incidents increase in the society. Minimum price policy would help the government to have a strong control over the drinking habits of UK public. Bushman & Cooper (1990) pointed out that “Alcohol causes aggression directly by anesthetizing the centre of the brain that normally prevents aggressive responding. Alcohol facilitates aggression indirectly by causing certain cognitive, physiological, and emotional changes that increase the probability of aggression”(p.342). In most of the cases, alcohol induced crimes are taking place without the knowledge of the culprit. In other words, alcohol takes or leads a person from this real world to a virtual world. The person may not have any control over whatever the incidents happening in the virtual world. No moral or ethical principles have any role in the activities of an alcoholic. Man is a social animal and hence his activities may affect the society in many ways. Therefore, it is impossible for a society to allow its members to lead crazy life styles. When people live in a society, they should obey the rules and norms of the society. One of the social rules says that the activities of one person may not cause any damage to the interests of another person. Since alcoholism causes many damages to innocent people, no society can allow it beyond certain limits. Under such circumstances, UK government’s minimum price policy is justified. According to a report in The guardian posted by Owen Bowcott (Wednesday 26 May 2010), “Alcohol consumption is going down - but deaths from alcoholism are going up in UK. People are drinking less - but deaths from excessive drinking are rising steadily, according to the latest government statistics, published by the NHS Information Centre” (Bowcott, 2010). (See Appendix 1 for more details). The above report clearly suggests that the number of people consuming alcohol is getting decreased as time goes on; however the number of binge drinkers is increasing. That is why deaths related to alcoholism are increasing day by day. These facts clearly justify governmental intervention in the name of minimum price policy to reduce the number of binge drinkers in UK. At the same time, there are plenty of arguments against this policy. Many people believe that this policy would never bring any good to the society. In their opinion, this policy would bring more harm than good to a British society. Prevalence, harm, and unintended consequences of minimum price per unit policy The following table provides a rough idea about the increase in food and drink grocery budget following 40p minimum price, by income group and average weekly off-licence consumption level. From the table given below, it is evident that this policy would put extra burden in the shoulders of all British people irrespective of their financial capabilities. (Leicester and OConnell, 2012) Many people perceive this policy as a punishment to moderate drinkers. In their opinion, this policy might create or exacerbate existing social problems (Lonsdale et al., 2012). Since alcohol has the ability to cultivate addiction among its users, price hikes may not prevent binge drinkers from purchasing liquor even if the prices go high. It should be noted that binge drinkers normally belongs to people from the ordinary class. Addiction will force them to spend more money for drinks and thereby their families will be suffered a lot. In other words, price hikes may not prevent binge drinkers from the habit of purchasing alcoholic drinks. The ultimate sufferers of the minimum price policy would be the family members of the binge drinkers. “There was little evidence to suggest that people would support the introduction of a minimum price per unit of alcohol policy. Scepticism about the effectiveness of the policy is likely to represent the most significant barrier to public support” (Lonsdale et al., 2012). Three major concerns about the objections to a minimum price per unit among the public were related to the issues such as:”1) A misunderstanding of the minimum price per unit policy itself; 2) The failure to recognize the significance of small incremental reductions in alcohol consumption; and 3) A preoccupation with the effects of a minimum price on heavy and dependent drinkers”(The Cost of Alcohol: The Advocacy for a Minimum Price per Unit in the UK, N.d., p.2). UK government has implemented this policy in a hurry. They never tried to empower the public with respect to the needs of such a policy before its implementation. As a result of that lot of rumors are currently spreading in UK about this policy. The government should have put this policy in front of the public for a debate before its actual implementation. UK Public has a feeling that a small reduction in alcohol consumption may not solve the problem to the satisfactory level. In their opinion, this policy may not help the government in reducing the drinking habits of the public. Among heavy drinkers, this policy has created lot of skepticism. They believe that the government is trying to loot the money from the poor people in the name of this policy. Economists also have many concerns about the impact of this policy upon the revenue of the government. “The expected reduction in alcohol consumption following the introduction of a minimum unit price would reduce the amount of alcohol duty received by the Government, with consequences for the public purse”(Woodhouse and Ward, 2013, p.10). It should be noted that one of the major revenue sources of UK government was the taxes generated from the selling of alcoholic drinks. Reduction of alcoholic drink consumption may result in the reduction of tax revenue from the alcoholic beverage sector. When the government fails to generate enough revenue from the alcoholic beverage sector, they will try to increase the taxes of other sectors. Ultimately, the minimum price policy would affect normal people in one way or another. Andrew Opie of the British Retail Consortium has claimed that a minimum price would be a tax on responsible drinkers: Irresponsible drinking has cultural causes and retailers have been hugely engaged in information and education to change attitudes to drinking. Its a myth to suggest that supermarkets are the problem or that a pub is somehow a safer drinking environment. Effectively, a minimum price is a tax on responsible drinkers (Woodhouse and Ward, 2013, p.13). Another drawback of the minimum price policy is that it may not affect the alcohol consumption among the higher income groups. Alcohol has the ability to generate health problems not only among average income group but also among high income group. When government implements a policy, its benefits or drawbacks should be affected all the people irrespective of their income. However, the minimum price policy seems to be affecting only the average income groups. Effects of the policy across population subgroups Effect of the policy across teenagers Drinking habits are different among different people in UK. It is not necessary that both teenagers and adults have same taste and preferences with respect to alcoholic drinks. Some people like sweetly drinks whereas others like drinks enriched with alcohols. According to a research conducted by Hargan (2010) through mobiles phones among teenagers in the age group of 18-24 in the UK the following results were obtained. While 18-24s are more likely to drink to get drunk, their consumption is actually less (in volume terms) than the rest of the population as they drink less but more frequently. They are a key segment as these drinkers are new to the market and experimenting to find out their favorite beverage.  Brands want to attract them before their preferences become established. 18-24s prefer sweeter-tasting drinks and are more likely to drink spirits mixed with soft drinks and cocktails.  Vodka was reported as being very popular due to both high level marketing campaigns and the fact that it does not have a strong taste (Hargan, 2010). People in the age group of 18-24 are students and hence their revenue sources will be limited. They get financial assistance from others since they are not working professionals. Mostly people in this age group get pocket money from parents which will be utilized for the drinking purposes. However, the recent recession has caused huge financial problems to average families in UK. As a result of that pocket money supply to teenagers from such families were dropped significantly during the recession period. Such people forced to limit their drinking habits which are evident from the illustrations given in appendix 2. Minimum price policy would further exaggerate the problems facing by teenagers in getting their favorite alcoholic drinks. It is difficult for them to find enough money to purchase their favorite drink when the price per unit of alcoholic drinks increases as a result of the minimum price policy. They will be forced to reduce the frequency of their drinking habits because of the price hikes. At the same time, some dangers are also associated with the minimum price policy. It is quite possible that teenagers try to engage in antisocial activities to find enough money to purchase their favorite drinks. For example, it is possible that teenagers start robbery, burglary and other violent criminal activities to find enough money to purchase alcoholic drinks. Drug trafficking and sex trade may also increase among teenagers when they struggle to find enough money to purchase alcoholic drinks. According to Hunt et al (2013), “Depending on the minimum price introduced, the effect of this policy is especially strong for low-cost alcohol. Thus minimum pricing has important implications for young and hazardous/harmful drinkers and low-income groups, who are more likely to purchase cheaper drinks” (Hunt et al., 2013). In short, government should make sure that the minimum price policy would never cultivate antisocial activities among teenagers. Effect of the policy across higher income groups and professionals Professionals and people from higher income groups may not be affected very much by the minimum price policy. This population group should have enough financial resources to purchase their favorite drinks and a small price hike may not prevent them from shifting their interests from alcoholism to any other activities. It should be noted that drinking is a socializing activity among higher income groups and professionals. Drinks are unavoidable in parties and celebrations conducted by professionals and higher income groups. There are plenty of people who have the habit of a sufficient inventory of alcoholic beverages in their kitchen or in fridges. Such group of people will never bother much when price hikes occurs for alcoholic drinks. Conclusions Alcoholism is one of the major social problems across the world and the case of UK is not an exception. Even though the number of drinkers is getting reduced in UK, the number of binge drinkers is getting increased as time goes on. As a result of that deaths related to alcoholism are increasing in UK. It should be noted that alcoholics cause problems not only to themselves, but also to their family and society. Even innocent people face problems related to the drinking habits of others. Under such circumstances, it is impossible for a democratic government to stay idle when alcoholism spreads across the population. The minimum price policy was introduced by the UK government to reduce drinking habits among UK population. This policy was good in principle, but in practice it failed to meet the objectives because of the faults in implementation of this policy. UK Government failed to discuss this policy among the public to find out the loopholes, before its implementation. In other words, this policy was introduced in a hurry without investigating its consequences. UK government thought that binge drinking habits can be controlled up to certain extent with the help of this policy. However, this policy succeeded only partially in meeting its objectives. Even though low income groups may reduce their drinking habits up to certain extent, higher income groups may not reduce their drinking habits as a result of this policy. At the same time, it is quite possible that low income group of people may engage in antisocial activities to find out enough money to purchase their beloved alcoholic drinks. In short, UK government should have conducted a comprehensive study to determine the good and evil effects of this policy before the implementation of this policy. References Alcohol-related crime and Disorder, N.d. Institute of Alcoholic Studies. [Online] Available at: http://www.ias.org.uk/resources/factsheets/crime_disorder.pdf [Accessed 31 March, 2013] Bushman, B. J. & Cooper, H.M. 1990. Effects of Alcohol on Human Aggression: An Integrative Research Review. Psychological Bulletin. American Psychological Association, Inc.1990, Vol. 107, No. 3,341-354. Bowcott, O. 2010. UK alcohol consumption statistics: how much do people drink where you live?. The guardian. Wednesday 26 May 2010. Breene, S. 2012. News: UK Bans Cheap Alcohol to Reduce Binge Drinking. [Online] Available at: http://greatist.com/health/uk-cheap-alcohol-ban-112812 [Accessed 31 March, 2013] Brown, M. 2012. Middle Britain hit by ban on cheap alcohol. Express. November 29, 2012. Hunt, P., Rabinovich, L. & Baumberg, B. 2013. Preliminary assessment of economic impacts of alcohol pricing policy options in the UK. [Online] Available at: http://www.rand.org/pubs/technical_reports/TR858-1.html[Accessed 31 March, 2013] Hargan, C. 2010. Drink preferences of 18-24 years old in the UK examined. [Online] Available at: http://www.bordbia.ie/industryservices/information/alerts/Pages/DrinkpreferencesofUK18-24yearsoldexamined.aspx?year=2010&wk=31[Accessed 31 March, 2013] Independent alcohol strategy released by coalition of health bodies, 2013. [Online] Available at: http://www.alcoholpolicy.net/alcohol-pricing/[Accessed 31 March, 2013] Lonsdale, A.J., Hardcastle, S.J. & Hagger, M.S. 2012. A minimum price per unit of alcohol: A focus group study to investigate public opinion concerning UK government proposals to introduce new price controls to curb alcohol consumption. BMC Public Health 2012, Vol. 12 Issue 1, p1-16. Leicester A and OConnell, M. 2012. How significant is a minimum unit price for alcohol of 40p?. [Online] Available at: http://www.ifs.org.uk/publications/6084 [Accessed 31 March, 2013] Morton, F. &Tighe, B. 2011. Prevalence of, and factors influencing, binge drinking in young adult university under-graduate students. Journal of Human Nutrition & Dietetics Jun2011, Vol. 24 Issue 3, p296. Marshall, A. N.d. Economics Basics: Supply and Demand[Online] Available at: http://www.investopedia.com/university/economics/economics3.asp [Accessed 31 March, 2013] Siddique, H & Wintour, P. 2013. Minimum alcohol price still in balance as Cameron fudges his booze pledge. The Guardian. 13 March 2013 The Cost of Alcohol: The Advocacy for a Minimum Price per Unit in the UK, N.d., [Online] Available at: http://www.alcoholresearchuk.org/downloads/insights/AlcoholInsight_0082.pdf [Accessed 31 March, 2013] Woodhouse, J and Ward, P. 2013. A Minimum Price for Alcohol?. [Online] Available at: www.parliament.uk/briefing-papers/SN05021.pdf[Accessed 31 March, 2013] What Is An Alcoholic? What Is Alcoholism?, 2009. [Online] Available at: http://www.medicalnewstoday.com/articles/157163.php [Accessed 31 March, 2013] Appendix 1 Alcohol-related deaths, by gender, 2001 to 2008 . . England Numbers . ICD 10 code 2001 2002 2003 2004 2005 2006 2007 2008 . . All persons 5,476 5,582 5,981 6,036 6,191 6,517 6,541 6,769 . F10 Mental and behavioural disorders due to alcohol 484 430 433 462 539 506 484 637 . I42.6 Alcoholic cardiomyopathy 108 122 99 94 75 83 75 80 . K70 Alcoholic liver disease 3,236 3,392 3,697 3,759 3,874 4,160 4,249 4,400 . K73 Chronic hepatitis - not elsewhere specified 70 72 58 63 58 68 68 62 . K74 Fibrosis and cirrhosis of the liver (excluding K74.3-K74.5) 1,406 1,407 1,511 1,466 1,427 1,490 1,432 1,367 . K86.0 Alcoholic induced chronic pancreatitis 33 32 32 43 52 41 48 48 . X45 Accidental poisoning by and exposure to alcohol 126 112 127 130 151 149 157 153 . Other causes4 13 15 24 19 15 20 28 22 . . Men 3,576 3,631 3,970 3,922 4,096 4,272 4,236 4,473 . F10 Mental and behavioural disorders due to alcohol 337 306 320 326 400 349 321 434 . I42.6 Alcoholic cardiomyopathy 95 93 88 78 59 74 66 68 . K70 Alcoholic liver disease 2,146 2,275 2,513 2,461 2,602 2,769 2,814 2,966 . K73 Chronic hepatitis - not elsewhere specified 22 16 14 14 12 14 10 16 . K74 Fibrosis and cirrhosis of the liver (excluding K74.3-K74.5) 858 835 909 904 869 918 865 829 . K86.0 Alcoholic induced chronic pancreatitis 19 24 22 34 43 33 35 39 . X45 Accidental poisoning by and exposure to alcohol 90 70 86 91 100 96 106 110 . Other causes4 9 12 18 14 11 19 19 11 . . Women 1,900 1,951 2,011 2,114 2,095 2,245 2,305 2,296 . F10 Mental and behavioural disorders due to alcohol 147 124 113 136 139 157 163 203 . I42.6 Alcoholic cardiomyopathy 13 29 11 16 16 9 9 12 . K70 Alcoholic liver disease 1,090 1,117 1,184 1,298 1,272 1,391 1,435 1,434 . K73 Chronic hepatitis - not elsewhere specified 48 56 44 49 46 54 58 46 . K74 Fibrosis and cirrhosis of the liver (excluding K74.3-K74.5) 548 572 602 562 558 572 567 538 . K86.0 Alcoholic induced chronic pancreatitis 14 8 10 9 9 8 13 9 . X45 Accidental poisoning by and exposure to alcohol 36 42 41 39 51 53 51 43 . Other causes4 4 3 6 5 4 1 9 11 . . 1. Deaths occurring in each calendar year. . 2. Data may include non-residents. . . Source: . DH2 Mortality Statistics - Cause, No.s 28, 29, 30, 31 and 32, 2001, 2002, 2003, 2004, 2005 and Mortality statistics: Deaths registered in 2006, 2007, Office for National Statistics . (Bowcott, 2010) Appendix 2 (Hargan, 2010) Read More