Roughan on alcohol and competition
May 25th, 2009 at 3:00 pm by David FarrarJohn Roughan on Saturday had an excellent post on the benefits of competition:
Twenty years ago a visit to a wine shop was not much better than a prowl around supermarket shelves today. There was a limited range of popular varieties, some priced to clear.
You made a selection with minimal assistance and knew from bitter experience not to try anything unfamiliar, particularly if it was red.
Twenty years ago, when Parliament passed a law allowing wine to be sold in supermarkets, everybody supposed it would spell the death of the wine shop. So much for supposition.
I have a nearby supplier these days who has noted what I like, knows my modest price preference and, more often than not, has a new vintage to recommend. Invariably, it is superb.
This is key – not all competition is price based. It is service based also.
Here’s to him, here’s to all the customers that keep him solvent, here’s to supermarkets that force him to compete on service, here’s to the Sale of Liquor Act, 1989.
Bravo.
I mention this because the liberal liquor laws of the late 20th Century are in imminent danger of reversal. The sale of alcohol from supermarkets, the proliferation of suburban liquor stores and the lowering of the minimum purchasing age to 18 are blamed for under-age and binge drinking, domestic violence, even armed robberies.
And much more no doubt.
I don’t know if higher prices will deter binge drinking and other sins. The researchers assure us it will. Nor do I know whether wine shops will continue to offer an assiduous service if supermarkets can no longer advertise today’s price differentials.
What I do know is that the benefit competition has brought for consumers like me is unlikely to figure in the decision. The benefits of competition seldom attract social research.
Eric Crampton has already analysed some of this research and found that it only looks at costs, not benefits. Any decisions on alcohol should be made on a rational basis.
Related posts:
- Blaming alcohol
- Drug Foundation Alcohol Bingo
- The Alcohol Reform Bill
- Du Fresne on moralising Police
May 25th, 2009 at 3:27 pm
This is key – not all competition is price based. It is service based also.
Yes. An important aspect of competition that is invariably missing from the spreadsheets of regulators.
Vote:May 25th, 2009 at 3:38 pm
What has putting a tax on sherry done to teenage drinking levels just out of interest?
Vote:May 25th, 2009 at 3:39 pm
Well yes, benefits need to be considered. But methinks Roughan being able to pop down the corner for that new Marlborough sauv is probably not going to be ranking in the executive summary of a review of alcohol’s societal impact is it?
Vote:May 25th, 2009 at 3:49 pm
Can’t argue with his points. I like smart sales people who look after their customers too.
But is a gentleman’s pleasure at having attentive staff on hand to recommend this week’s “superb vintage” really very important, compared to the booze-related problems in NZ that other people are complaining about?
Vote:May 25th, 2009 at 3:49 pm
“Invariably, it is superb.”
Not often I agree with John Roughan (or even manage to make it all the way through his tedious prose) but I think he’ll find that the wine is better because NZ producers are simply making better wine than 20 years ago. Much as I heartily endorse his support of the local wine shop, it’s not the service that’s making it taste better, it’s older vines, better clones and a shedload more experience of making good wine.
Vote:May 25th, 2009 at 3:57 pm
“But methinks Roughan being able to pop down the corner for that new Marlborough sauv is probably not going to be ranking in the executive summary of a review of alcohol’s societal impact is it?”
It wont, but it SHOULD.
It is possible that the aggregate small benefits, like that experienced by Roughan, massively outweigh the aggregate negatives. Those benefits exist, even if they are very difficult to measure.
This is the common problem with cost-benefit analysis. If something cant be measured easily, it is assumed to be unimportant and is ignored.
The fact that the example DPF mentioned explicitly ignores any and all benefits is another problem. Each individual detriment from drinking, ie easily measureable drink drive stats, far outweighs any individual benefit. So the analyser feels comfortable in assuming away all benefits.
Vote:May 25th, 2009 at 4:16 pm
Eureka! I have the answer. Price grog off the market for young people and make grog-shop owners surly and UNCOMPETITIVE.
Then clamp down hard on home brew. That’ll get these darned youngsters off to bed by 10pm with their calculus homework and favourite teddy on weekends. I’ll just run this neat idea past the teenager when she gets home from school.
Vote:I expect total agreement. Jolly pip.
May 25th, 2009 at 4:19 pm
“Any decisions on alcohol should be made on a rational basis.”
Fat bloody chance.
Any decisions on alcohol will be based on just how much the do-what-I-say anti-fun scum think they can get away with.
The current government makes chances slightly better that this will be limited – but only bloody slightly.
Vote:May 25th, 2009 at 4:20 pm
“Eric Crampton has already analysed some of this research and found that it only looks at costs, not benefits. Any decisions on alcohol should be made on a rational basis.”
Be nice to see research look at the benifits of recreational drug use as well.
And yes, alcohol is a recreational drug, just like Ecstacy or Cannabis, only more harmful.
Vote:May 25th, 2009 at 4:23 pm
So we have a problem with our youth resorting too frequently to alcohol? The typical government solution is of course to introduce bans, raise prices, forbid certain behaviour, restrict sales etc etc.
Couple of questions:
1-WHY do our youth resort to alcohol abuse?
2-WHY should this in some way be a responsibility of government? (obviously as long as no other laws are broken)
3-WHY do they think that restrictions of the kind contemplated will actually achieve anything?
4-WHAT has happened to individual choice and responsibility?
5-WHY do the doom merchants always hi-jack any issue to promote further increased state intervention into EVERYBODY’s life when a SMALL PART of the population is confronted with some perceived problem?
Beats me
Vote:May 25th, 2009 at 4:47 pm
1- because they are young
Vote:2- because government is responsible for everything
3- because government is the expert on everything they are responsible for
4- because government knows better than the individual about what is best for all individuals, collectively
5- see 2-4
May 25th, 2009 at 5:05 pm
“I don’t know if higher prices will deter binge drinking and other sins”
Having spent 5 years working in bars in wellington I can assure people that it will not. I have dealt with people who will gladly live on two minute noodles so they can go out for a drink. Who think nothing of spending $80-$100 on bottles of spirits to get hammered before they go out. But far more importantly, don’t think there is anything wrong with this,…it is as if getting smashed (both alcohol induced and physically) is a New Zealanders right.
And before people come crashing down on those people who work hard to make alcohol consumption safe and fun (the bar managers and owners, the local retailers, yes even the supermarkets who have quite strick ID rules) I’d like to point something out. I now live in Hong Kong which has a very different culture to NZ, but does have a good stock of brits, aussies and yanks to make it just feel and seem like home. I can go down to the 7/11 corner store and buy a small bottle of spirits, some RTDs, even beer and drink it whereever I like. I can buy full strength alcohol over the counter at the supermarket (and strangely for a 24 year old, I never get asked for ID) More to the point, so can everyone else here, and are there drunken louts falling over on the street, is there street crime, physical violence?
None at all, I’ve always felt safe in this city, because the culture understands that it is not the product that does the damage, it is the way people consume it.
When will New Zealand grow up and stop shifting the blame on issues such as this?
Vote:May 25th, 2009 at 5:06 pm
ROUGHAN:::::::: I don’t know if higher prices will deter binge drinking and other sins. The researchers assure us it will.
Well researchers are wrong as they invariably are; The last time Liabour increased liquor prices, according to Blowhard Anderton to stop teenagers drinking Ready to drink cans of spirits, the net effect was to price Pensioner’s sherry out of their budget, this may have allowed them to live a little longer(no research) but their enjoyment of life decreased. The kids drank just as much. Now we have the perpetual gravy slurper Geoffrey PALMER urging National to increase the price of liquor. IGNORE HIM National he is acting against your interests.
Vote:May 25th, 2009 at 5:15 pm
“Well researchers are wrong as they invariably are”
I love that statement!
Didn’t a well-known RESEARCHER in England once propose that the net force on a particle of constant mass is proportional to the time rate of change of its linear momentum, in other words: F = d(mv)/dt? (Laymen may be more familiar with F=MA)
That has been the basis of all engineering for the last 300 years. But no, all research is always wrong, just ask backster.
Honestly you chaps are going to have to grow out of this silly “Book-learnin’ never showed anybody how to grow turnips good” attitude if you ever want this to be anything more than a marginalised right-wing circle jerk!
Vote:May 25th, 2009 at 5:19 pm
It would be nice if the decisions around alcohol and other recreational drugs could be debated and worked upon in a manner which was logical and well thought up rather than reactionary and misinformed in a large review. Such a review would need to be truely independent, which is difficult considering the large amount that alcohol companies spend on lobbying. However this would need to be balanced in such away that kill joys who believe drinking is evil bla bla do not unduly restrict our ability to have fun.
Personally I would be for:
Wholesale age increased from 18 – 20. This would have the effect of reducing the ease of school aged kids getting booze without their parents knowledge (which puts the burden in parents hands) but in a realistic manner not restrict those after in any manner.
Onsite age maintained at 18.
Alcohol in terms of any crime committed seen not as an excuse in terms of sentancing etc.
Repeat drink drivers not being legally allowed to own a car and face prison terms. Sounds harse but a drink driver is more likely to kill someone than a thief.
Would like the review expanded however, as currently everything else is outlawed, I mean party pills for christ’s sake. They killed like noone to one compared with booze killing shit loads everyyear yet some get uptight cause it wasnt around in their day. Personally believe our drugs and alcohol policy needs to be more focussed on their negative effect + positive effects and how to minimise the former (i.e. focus police resources at P, Coke, Herorin etc) and remove the focus from those that cause low grade damage (E which according to a study in the UK has less negative societal effects than alcohol, tobacco or maijuanna) having the laws drafted in such a way that whilst not encouraging consumption they do not funnel money into the underworld.
Vote:May 25th, 2009 at 8:54 pm
Slighty off topic but I loved the part in the original article where he linked that to non deregulation of the pharmacy industry and pointed out the pharmacy industry is wanting extra funding to add the sort of value adding service that the wine shops have had to do with competition.
Vote:May 25th, 2009 at 9:09 pm
Hmm, all you fellows mate Michael Laws thinks that enforcing higher prices on booze will stop binge drinking amongst young’uns.
But just yesterday you were his best mate defending Lee.
Vote:May 25th, 2009 at 9:27 pm
Agreed bearhunter.
I’d hazard a guess that most staff in the chain bottle-stores couldn’t tell you the difference between a shiraz and a syrah.
Vote:May 25th, 2009 at 10:45 pm
To be able to choose and individual must be free. Once our children have access to schools of their choice, a safe family home, health insurance that reflects the cost of their lifestyle (with the ability to pay for it) and the ability to live and move within society and not be judged by their colour, gender or hair style then I would remove all controls on all drugs.
All individuals could then decide for themselves whether to take drugs or not and the ultimate consequences would be paid by them.
All drugs would just become common commodities as alcohol is today but without this false glamour that is associated with it.
Vote:May 25th, 2009 at 11:24 pm
kiki, thats an impossible utopia.
For starters, if everyone could choose.. Wellington College simply cannot support all of Wellingtons children.
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