How much should we pay for a drink?
July 5th, 2012 at 3:03 pm by David FarrarIn my Herald column I write about Labour’s proposed minimum pricing for alcohol.
Labour seem very reluctant to confirm what minimum price they are actually advocating. Lianne Dalziel twice stated in Parliament it should be at least $2 a standard drink. Her colleagues seem to want to ignore that, as seen below.
You can’t have it both ways and have your MPs get up in Parliament and say the law should be this, and then deny that is your policy – especially when the MP is your spokesperson on alcohol issues.
A reader sent me this graphic, which sums it up.
More usefully, Eric Crampton has an excellent analysis of minimum pricing. He states:
What would the world have to look like for minimum alcohol pricing to be a reasonable policy solution?
Suppose it is the case that harmful heavy drinkers, the sort that impose the greatest harms on others when they consume alcohol, really don’t care about the quality of the alcohol they’re drinking; they’re buying whatever product provides alcohol at the lowest price per standard drink. Suppose further that this cohort’s consumption is reasonably responsive to price measures: if you raise the price of the cheapest form of alcohol, you’ll do a lot to curb that cohort’s consumption while not doing much to reduce the normal consumption of moderate drinkers. Finally, assume that there’s little overlap between the kinds of alcohol consumed by harmful drinkers and that consumed by moderate low-income drinkers.
So minimum pricing is a good idea Eric says, if the above holds true.
where both heavy drinkers and moderate drinkers are choosing the same kinds of products, albeit in different quantities, we have to worry a lot about how each kind of consumer responds to changes in prices. The best meta-study on the topic remains Wagenaar, who found that heavy drinkers are roughly 60% as price responsive as moderate drinkers: the price elasticity of demand among heavy drinkers is -0.28 while it’s -0.44 for average drinkers. If we doubled the price of lower cost products, which we’d have to do to get to Labour’s preferred $2 minimum price per standard drink, moderate drinkers who currently choose that class of product would cut back their consumption by about 44% while heavy drinkers would reduce their consumption by only about 28%.
Intuitively you would expect heavy drinkers to be less price sensitive.
Related posts:
- Crampton on minimum prices
- $2 a standard drink advocated
- Labour’s $2 a standard drink policy
- Labour in retreat
July 5th, 2012 at 3:08 pm
http://www.scoop.co.nz/stories/PO1207/S00036/who-is-advising-the-prime-minister-on-alcohol-reform.htm
Vote:July 5th, 2012 at 3:16 pm
Everyone wants to treat the symptoms of a broken society,pretending to do something.Too late ,the horse bolted a long time ago.Now they want to tax us for the consequences of their stupidity.
Vote:July 5th, 2012 at 3:23 pm
I was going to post something but my daughters told me I must be very polite to Jacinda.
Vote:July 5th, 2012 at 3:27 pm
Nice!!
The Right need to make better use of graphics.
Make them simple and make them easy to relate too.
Labour – looking after the waitakere man since never
Vote:July 5th, 2012 at 3:34 pm
This is what I dont get. Minimum pricing on alcohol will impact lower priced – cheap – piss. Bought by a significant number of labour voters. Did labour not get ‘dont piss the supporters off’ memo?
Vote:July 5th, 2012 at 3:34 pm
The heavy drinking demographic is not price sensitive. It’s not sensitive to anything, really. That’s the deal with addiction.
Vote:July 5th, 2012 at 3:34 pm
Wouldn’t worry me if they increased the price by that much if the extra tax went specifically to cover harm done by the over consumption of alcohol.
Chances are it won’t though – it will get sucked into the consolidated fund.
Something has to be done though the harm caused by the misuse of alcohol in NZ – its terrible and the common attitude that its nothing but a bit of harmless fun isn’t terribly responsible.
Vote:July 5th, 2012 at 3:39 pm
Its about the message, not substance.
Quite frankly I suspect they only introduced this SOP because they were confident it would get voted down.
Vote:July 5th, 2012 at 3:39 pm
So nobody will bother buying dirty DB Bitter any more, because flash imported beers will be the same price.
Is this part of “own our future”? I’m confused…
Vote:July 5th, 2012 at 3:42 pm
People might want to look at the last time politicians meddled in the specific price of types of Booze in 2003, when Jim Anderton killed off Sherry, while attempting to stop binge drinkers
“Mr Anderton, the leader of the Progressive Coalition, said that if the light-spirit market had crashed he was glad the tax had been effective. He said young people did not drink spirits such as vodka or bourbon.
“That’s not going to young kids. The evidence is we’ve been successful.”
The late Michael Erceg had a particular lovely comment
Mr Erceg said he would not be asking Mr Anderton to review the effectiveness of the tax.
“It’s like holding up a newspaper in front of a blind man, so why bother.”
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=3548151
Vote:July 5th, 2012 at 3:44 pm
From yesterday Alcohol minimum price support:
If Nat MPs follow Key’s lead on this onl;y one more vote is needed to defeat Labour’s SOP.
But then Dunne tweeted later in the day:
So it doesn’t look like the minimum price will pass.
The amendments to change the purchasing age from 18 are still open.
Vote:July 5th, 2012 at 3:44 pm
Well there’s a surprise eh, Inky – the PM being misinformed about alcohol reform.
Vote:July 5th, 2012 at 3:48 pm
Chauvel’s comments on his SOP didn’t specify the minimum price though, it was an open ended price fixing tool for whatever minister was in at the time:
Of course we could have confidence the Minister’s power would always be “properly exercised”.
Does make you wonder if this SOP was designed to fail so it could be used as a political weapon.
Vote:July 5th, 2012 at 3:50 pm
Go on then miken, whys that then – or just another meaningless banal statement?
And before you answer, dont bother referring to that press release – the science on both sides shows what they want it to show, so quoting from a press release from an organisation that actively campiagns against drinking? Nah, not even.
Vote:July 5th, 2012 at 3:51 pm
Something has to be done…
Isn’t this the catch-cry of every nanny state proposal? SOMEthing has to be done. What exactly? Who knows but SOMEthing. The logical implication being that government action can only have positive consequences, that there are no such things as tradeoffs, and that whatever the government does it is better than doing nothing.
My view is that I pay enough tax on alcohol to cover any health related expenditures. I pay this tax despite the fact that plenty of other unhealthy lifestyles go unnoticed and despite the fact that I control the amount I drink. I don’t see why I should have to pay more for my alcohol on the questionable basis that it may reduce the harm caused by fucktards who will be fucktards no matter what legislation is passed.
Vote:July 5th, 2012 at 3:55 pm
It’s not the drinking, it’s the drinkers that are the problem.
Vote:July 5th, 2012 at 3:57 pm
So nobody will bother buying dirty DB Bitter any more, because flash imported beers will be the same price.
I’m picking the various parties involved won’t nobly continue selling Stella, Grolsch etc at $20-24 per dozen if they’re having to charge $24 per dozen of shit beer. If the new low-price benchmark is Rheineck at $20 a case, the rest of the beer market will price upwards from there. Ah, good times ahead of paying more for things to serve no useful purpose. Labour, how vital do you think it is to your party’s future to keep coming with excellent reasons why we shouldn’t vote for you?
Vote:July 5th, 2012 at 3:58 pm
That’s right hmmo, appeals to science are such obvious bunk, aren’t they?
Vote:July 5th, 2012 at 4:01 pm
Minimum pricing is a dumb idea from dumb people.
Distilling kits for home use are readily available. All that will happen is that kids will distill their own ethanol under dubious quality conditions and not bother watering it down.
Outcome? Much more harm. The problem isn’t the price of alcohol, it is the attitude of those consuming it. NZ has a poor attitude to a lot of things: Alcohol, violence, drugs.
How about bringing a few more drunk and disorderly cases in front of the courts, and have judges issue a forbidden to drink for 6 months, with the offender required to submit to alcohol testing once a week. If we can forbid driving, and forbid ownership of animals, and forbid associating with gangs, we can forbid drinking alcohol.
Vote:July 5th, 2012 at 4:02 pm
Personally I think it is stupid to look at Alcohol in isolation. Why do we need different sets of laws for different recreational drugs?
Science not morality should be used for one set of standard drug laws be it Alcohol, Tobacco, Marijuana, Opium or P. However I can’t see parliament trusting science as every party in our parliament opposes science to some decree preferring their own prejudices which they justify by calling them commonsense
Vote:July 5th, 2012 at 4:07 pm
Wht didnt he just turn to Jacinda and say “you are telling lies” ?
Vote:July 5th, 2012 at 4:08 pm
My wife is a diy type person and she once asked me why didn’t I consider setting up a home brew kit.
She seemed confused when I explained that I like drinking nice beer…
Vote:July 5th, 2012 at 4:09 pm
Rouppe, my brother has a still, makes awesome gin! trick is to use a very high quality filter.
Vote:About $8 a litre at 40%.
But a poor benificiary would never go to that much trouble. Where would they find the time?
July 5th, 2012 at 4:11 pm
and all this talk of booze is making me thirsty…
But its a bit early to start if I want to get to see Cameron drooling on the canvas later tonight.
Vote:July 5th, 2012 at 4:21 pm
Nope miken, fail, didnt answer the question. Can only assume you lack the mental horse power to do so, or your argument is as shallow as your posts. 1/10, do try harder.
RRM, the quality of home brew – if you DONT use kits – is astonishingly good. Do try it
Vote:July 5th, 2012 at 4:28 pm
This could be like the measures to curb cigarette advertising, which game theory proved actually tremendously boosted the profits of all the cigarette companies in the late 70′s, 80′s, 90′s.
Wineries hate the low price of wine that the market has determined. This will artificially lift the price up. This could very well increase the supply of wine responding to artificially higher prices, as demand is unlikely to respond in a huge regard given the nature of this normal good. This could actually lead to higher profits for alcohol outfits.
I am a teetotaller largely, aside from a very very very occasional dark ale or cider. I don’t actually care too much what the govt does. But from my experience this won’t affect people’s consumption too much. Alcohol seems to be a need rather then a want good for most kiwis. Go figure.
Vote:July 5th, 2012 at 4:33 pm
Ok, so I’m pretty much a teetotaller, so I really am not affected by the price of alcohol.
But lets take into account that Labour are trying to target the heavy drinkers. These are people with a serious addiction …. I haven’t noticed the high prices of other addictive substance having much affect on stopping those with a serious addiction from getting as much of their preferred substance in whatever form or shape they can conjure up, paying whatever price is demanded.
There definitely needs to be something done. but I don’t think jacking up the price will make that much of a difference.
And if they jack up the price too high, it’s not like it’s that hard to make your own. And again if you got a serious addiction you don’t care much about the taste…. heck my folks had an alcoholic gardener in South Africa who used to use dog biscuits and battery acid as some of the ingredients for the crap he used to drink.
Vote:July 5th, 2012 at 4:35 pm
Tariana Turia blogs: Minimum pricing of alcohol will make “legends” of us all
She makes a case and then closes:
Vote:July 5th, 2012 at 4:45 pm
loved the way Ardern tried to shut Jamie-Lee of by denying the price of $2 per std drink. He did what all of us should do and ignored her .. the look on her face was gold.
Vote:Anyway, our local bottle store is flogging off Black Douglas 1125ml for $39.95 .. 1st glass will be poured when the clock says 5pm.
The thing the dingbats, and she is one, miss is that it would have to be a noticeable increase of the $2 per std drink value to be noticeable .. adding a couple of dollars per 6 pk will do sod all
July 5th, 2012 at 4:53 pm
hmmo
Vote:No, you are the one alleging that ‘the science on both sides shows what they want it to show’, so perhaps the onus might be on you to demonstrate the science that refutes the position taken in the press statement to which Inky so kindly directed our attention.
But if you insist on an answer to a question: ‘Go on then miken, whys that then – or just another meaningless banal statement?’ Yes, I am happy to confirm that the PM did make just another another meaningless banal statment.
July 5th, 2012 at 5:04 pm
Oh, twisted context, youre SO clever and smart.
Wow, one day we all want to be like you when we grow up. Oh, hang on…
But do please keep going with the line that the PM is evil, and hated. I love it. Pity its entirely devoid of anything approaching a fact base. But then thats not a problem for you is it
Vote:July 5th, 2012 at 5:23 pm
To borrow a quote from Charlton Heston-
“I’ll give you my beer when you pry it from my cold, dead hands!”
God help us If the left ever come to power in New Zealand..Kids will be actively encouraged to smoke the magic herb Cannabis but alcohol will be fast-tracked to being banned! (along with the even more evil sausage sizzle!)
Vote:July 5th, 2012 at 5:26 pm
Ardern certainly cuts up all wrong when she has it stuck to her. The dopey drongo faux outrage. She’s one to watch given her amusement potential.
Vote:July 5th, 2012 at 5:53 pm
You know things are going badly for Labour when after 4 years in opposition they are still on the back foot and being schooled over their awful policies. Even in the face of an inept National Government
Vote:July 5th, 2012 at 5:56 pm
Some random observations. Jacinda Ahern is a wet behind the ears little girl who lacks life experiences.
Vote:Isnt just typical of the Socialist Morons to go punish citizens who just want to buy a bottle of wine and sit down over a nice drink every so often. Rather than tackle the problem they prefer to punish the innocent.
July 5th, 2012 at 5:58 pm
An inspired turn of phrase, davincimode.
Vote:The dopey drongo part rings truer than ever with her.
July 5th, 2012 at 6:01 pm
Turia should be fixing Maoridom’s more urgent problem of killing its offspring, instead of becoming a wowser.
Vote:The poor woman is out of her depth.
July 5th, 2012 at 6:13 pm
I think nailing the rest of us for arseholes who cause a whole load of trouble is poor law and lazy thinking, in fact it goes so far to make politicians and councillers unfit for office in my book.
lets penalise the miscreants not the populace.
Firstly, make it illegal to be drunk in public, then sort the offenders out from there.
America has the same type of socialistas with the same attitude.
Vote:http://www.theblaze.com/stories/rep-west-mocks-mandate-lets-force-everyone-to-buy-a-glock-9mm/
July 5th, 2012 at 6:14 pm
Unlike wee Jammie….who’s spent all of his working life at the trough.
Vote:July 5th, 2012 at 6:28 pm
I get pissed off at the assumption made by Turia that cheap booze is the domain of the poor and alcoholic. I am neither but still like cheap booze. Buying a reasonable wine or beer for a hefty discount at PakN Slave means I have more dosh left over for other things.
Vote:July 5th, 2012 at 6:28 pm
The problem is binge drinking.
It manifests with people throwing up in gutters.
The solution is punish the fucking drunks.
That means gather them up and cage them till they pay an instant fine say $250.
Just leave sane, sensible, socially responsible pensioners afreekinglone.
Dopy socialists thinking they can solve every problem.
Reallity is they just create more fricken unforeseen consequences.
Outcome will be no discernable effect.
Charley shovel, My little Poney Adern, Plughead Cosgrove, Casper Shearer, alternative government my arse.
Vote:July 5th, 2012 at 6:33 pm
hmmo
Vote:Does your imaginary world (in which I think ‘the PM is evil, and hated’) have unicorns?
Sorry to be so mean as to ask where Mr Key got his advice about alcohol reform that directly contradicts informed opinion. Maybe it was ‘aspirational’ advice – you know, advice that is not necessarily real.
July 5th, 2012 at 6:35 pm
“The heavy drinking demographic is not price sensitive. It’s not sensitive to anything, really. That’s the deal with addiction.”
It is somewhat price sensitive as a proportion of the real dypsomaniacs have limited earnings and spend everything they can find on booze. But yes if they can find the funds alcoholics are not particularly price sensitive.
Vote:July 5th, 2012 at 6:37 pm
I wrote a post many years ago on the connection between socialism (and communism) and alcohol. Generally, the more socialist a country is, the more the people will drink. The government then has to either put up with it or crack down on it really hard. I think in Sweden you can only buy alcohol from government run shops, so it becomes a bit of a rigmarole.
Of course, becoming less socialistic as a possible solution to the drink problem never occurs to them!
Vote:July 5th, 2012 at 6:38 pm
Informed opinion from whom? Surely, the do-gooders, wowsers, busybodies and petty tirants that pululate your beloved socialist Labour Party.
Vote:July 5th, 2012 at 6:54 pm
No Manolo, it is only the humble specialists from Alcohol Action NZ. Feel free to refute the research they cite, though.
Vote:July 5th, 2012 at 6:55 pm
Nice word there though, ‘pululate’, what does that mean?
Vote:July 5th, 2012 at 7:05 pm
“..Just leave sane, sensible, socially responsible pensioners afreekinglone…”
funny story..!
the largest consumers of alcohol in new zealand are the 50 +
..and as alcohol is one of the most dangerous drugs..it should be priced appropriately..
..and most certainly shouldn’t be advertised/pushed by sportspeople…
..and another funny story..
..we all know that alcohol consumption is one of our biggest social problems..
(drug overdose stats from wellington hospital show admissions running at 500-1..
..500 for alcohol..to one for all other drugs…legal and illegal..)
..and estimates are that legalising pot..(the safest drug..never ever even one admission to wellington hosp for pot-od..)
..that this legalisation of pot would see alcohol consumption drop by 20-25%…
..which would help solve our major social/od-issue..eh..?
..that is if sane thinking was at play..of course..
..as it obviously isn’t…
phillip ure whoar.co.nz
Vote:July 5th, 2012 at 7:15 pm
Charles Chauvel has replied to an email clarifying and elaborating on the Alcohol Reform Bill, including minimum pricing, the purchase age, the select committee process etc.
http://yournz.org/2012/07/05/charles-chauvel-alcohol-reform-bil/
It also links to the Alcohol Reform Bill (PDF).
Vote:July 5th, 2012 at 7:19 pm
“..alcohol will be fast-tracked to being banned! (along with the even more evil sausage sizzle!)..”
..i haven’t heard any ‘greenies’ calling for it to be banned..
..but advertising/pushing this addictive-muck on tv etc..is a particular form of madness…
..and of course it should cost more to purchase..
..and as for yr reference to ‘sausages’..?
well..given the facts of the cancers caused by eating red meat..(cancers that we in nz lead in people suffering from..)
..sausages should at the very least come with a health-warning…like cigarettes..
..eh..?
booze ‘n sausages..eh..?..the pan-cancers hit…living dangerously..
phillip ure whoar.co.nz
Vote:July 5th, 2012 at 7:26 pm
You and your Socialists. Socialists this, socialists that. The socialists did it. The socialists are to blame.
It makes it impossible to take a word you write seriously.
Wasn’t Jesus always turning blood into wine, feeding 5,000 from 5 loaves, 2 fish and a bottle of wine, etc etc?
Vote:July 5th, 2012 at 7:28 pm
Oh my, how easy it is to be free with other people’s money.
Vote:July 5th, 2012 at 7:43 pm
RRM,
LOL! When was the last time I talked about socialists?
Vote:July 5th, 2012 at 7:48 pm
I did a check of my blog, and the last real post on socialism (with a socialism tag that wasn’t just a passing comment) was from November 14 last year: Clare Curren on the Catholic Church and radical reform of the world’s financial systems.
Edited to add: Oh yes, and nothing wrong with wine. It’s just drinking to excess that’s the problem.
Vote:July 5th, 2012 at 7:55 pm
The only thing I don’t like about wine is the transubstantiation – that’s just a bit yucky.
Vote:July 5th, 2012 at 7:59 pm
Good on you Luca Maria. I have oftener wondered myself about the link between socialism and alcoholism.
Vote:RRM, Socialism is maxism under a different name and no matter the trojan horse that get’s it into a country, RRM, it is death to the democratic freedoms and aspirations of the middle classes. It’s not so silly really.
July 5th, 2012 at 8:00 pm
No wine MM, just casserole.
http://freethoughtblogs.com/dispatches/2012/06/16/rick-joyner-and-the-bottomless-casserole/
Vote:July 5th, 2012 at 8:02 pm
Good one cha. Don’t you wish Rick Perry had come through the Republican primaries?
Vote:July 5th, 2012 at 8:03 pm
I don’t know about anybody else but it rips my undies to be told what is right and what is wrong by two parasites who have never worked a day in their lives.
Both Adren and Lee-Ross have no bloody idea what a hard weeks work is, neither of them have had to worry about meeting the payroll or wondering how to pay the mortgage, I despise them both.
There should be a law against serial troughers being in Parliament, unless you have worked at least five years (in a real job) then you simply cannot have empathy with your constituents let alone know what life is like in the real work.
If you really want to know why this country is going down the shitter then one of the reasons might be because we elect fools like Lee-Ross and Adren to our house of representatives.
Vote:July 5th, 2012 at 8:04 pm
Thanks, Monique!
And thanks for what you said the other day about my friend, I appreciated that.
Vote:July 5th, 2012 at 8:08 pm
On that – at least sacramental wine would not be affected as it’s typically quite low alcohol content
Vote:July 5th, 2012 at 8:18 pm
Yes, there is a link between alcoholism and socialism, they both end in ‘ism’. Apart from that, there is no link.
Vote:July 5th, 2012 at 8:27 pm
Monique Watson – So… what’s the solution?
State control over alcohol sales?
Or just more state regulation of alcohol sales?
Or more god-worship?
Vote:July 5th, 2012 at 8:29 pm
If 330ml of beer @ 4% is 1 standard drink [ALAC] why would 12 330ml cans DB Bitter [3.5%] be $24.00?
Would it not be more like $21.00?
Back to the Cointreau apple martini
Vote:July 5th, 2012 at 8:46 pm
I’d prefer to see ways of targetting the problems rather than penalising everyone. There could well be a million people enjoying a drink today, and most quite harmlessly.
I’ve just brewed up some gluhwein with a cheap bottle of red, diluted with ginger ale, probably half the alcohol evaporated off. Why should that double in price because some misuse it??
Vote:July 5th, 2012 at 9:15 pm
There is a mistake in the graphic, a can contains 1.3 standard drinks so the cost of a dozen is actually over $31.
Vote:July 5th, 2012 at 9:16 pm
The bitch is a silly twat. can you imagine Twevor getting hot and nasty over Cinty babe.
Vote:July 5th, 2012 at 9:17 pm
Now that’s not very nice.
Vote:July 5th, 2012 at 10:59 pm
Can you still get $6 bottles? I can never find anything less than $7 at the supermarket. Why has Labour fallen so far, from something resembling a liberal party, to now being more socially conservative than National.
And more importantly, how will you be able to justify cooking coq au vin or risotto, when the wine will cost more than the meat!
Vote:July 6th, 2012 at 6:28 am
> The heavy drinking demographic is not price sensitive
And the evidence for that is? Presumably then the government’s continued increase of excise tax on tobacco is also a waste of time. Funnily enough, I haven’t seen DPF blog on that subject. I wonder why.
Vote:July 6th, 2012 at 6:34 am
Just staggeringly idiotic. Has there ever been a party that’s strayed so far from its supporters? The average working stiff traditional labour voter must think the party’s been taken over by alien lifeforms.
Vote:July 6th, 2012 at 6:41 am
Isn’t that a bit patronising? Labour shouldn’t support alcohol reform because its supporters are more likely to be heavy drinkers? Maybe they want better health for their supporters, among everyone else who will benefit.
Vote:July 6th, 2012 at 8:57 am
Can we have a minimum price for petrol too? I’m sure it’d get Greens environmental support and keep the road toll down.
Vote:July 6th, 2012 at 9:39 am
Yes, a minimum price for petrol could have some environmental benefits although arguably the existing tax regime for petrol does that job already,
Vote:July 6th, 2012 at 9:54 am
Interesting. Most weeks, it can be an amusing exercise to go through the comments on DPF’s column on the NZH website and try and work out what “official” message was pushed out by the opposition spinmeisters for their minions to use to counter DPF. Some weeks I wonder why you even bother, David, given the amount of negative comments it generates.
This week, not a peep. So far there are 77 comments and I count only 3 that support minimum pricing. And no one has queried DPF’s figures – not a single comment about how he is mis-representing Labour’s position at $2 per standard drink etc. Interesting.
Vote: