Labour in retreat

July 6th, 2012 at 12:00 pm by David Farrar

The Herald reports:

  MP Charles Chauvel is calling for a minimum price on , but there is no consensus among his party about what that price should be.

This is trying to have your cake and eat it to. It is like a party announcing their taxation policy and saying “Oh we favour taxes going up, but we won’t tell you to how much”. A policy with no detail on what they want the minimum price to be, is not credible.

Before the 2011 election, Labour MP argued in the House for a $2 minimum price per standard drink in Parliament. She said this would bump up the price of the $6 bottles of wine which young women “pre-loaded on”, while not affecting a $15 bottle of wine.

National has argued that this would mean no bottle of wine – which usually contained 7 to 8 standard drinks – could be bought for less than $16.

Ms Dalziel’s office yesterday said that the MP used the $2 threshold as an example, and it was not Labour policy. It was up to the Justice Minister to decide on the threshold, and if minimum pricing was voted on in the House, Labour MPs would vote individually on it.

Crap.  Here are her exact words:

we should set a minimum price that would prevent wine from being sold for less than $2 for a standard drink

Does that sound like an example? It is a clear statement of what the minimum price should be.

This was not a one off. Labour’s spokesperson has been very consistent. At the first reading in 2010 she also said:

The priority is to increase the price of dirt-cheap alcohol, and that is why I am arguing for minimum pricing. I refer to the $5.99 bottles of wine. At that price, three young women can buy five bottles of wine to preload on, rather than buy two bottles of very good wine for the same price. The ones who buy five bottles of $5.99 wine are the most price-sensitive buyers. They are the ones who will change their behaviour when prices go up. Do not let anyone tell us that it will do otherwise. That is the reason for a minimum price per standard drink. The $2 per minimum standard drink price would not touch a $15 bottle of wine. That would stay the same price, but it would slightly more than double the price of the $5.99 bottle of wine.

It would touch the $15 bottle of wine. My Central Otago Pinot Noir is 14%, which for 750mls is 8.3 standard drinks. That would mean a minimum price of $16.60. I generally avoid the $6 bottles of wines, but you get many good wines for $11 or so, and Lianne is advocating they increase 50% in price.

I hope that MPs in Parliament will not let Labour get away with their policy of saying we believe in minimum pricing, we want to pass a law to enable it, but we will not tell you what the minimum price should be. Labour should be honest and tell New Zealanders what they think the minimum price should be.

Maybe it is even more than $2 a standard drink?

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56 Responses to “Labour in retreat”

  1. Michael Mckee (1,091 comments) says:

    Rubbish
    Deal to the offenders do not deal to non offenders with nanny state price rises.
    if a bottle is worth $16.00 then so be it, if we can buy it for $7.99 all the better.
    DPF when lazy thinking people affect ordinary law abiding peoples lives like this their behaviour is beyond comtempt.
    It shows they are not fit for purpose and shouldn’t be voted for.

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  2. dime (10,134 comments) says:

    Screw the price of wine.

    The price of vodka is the issue! $74 minimum for a 1125ml!

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  3. Sam Buchanan (501 comments) says:

    It’s a great example of Labour’s thinking on class politics when come out with: “We are determined to make alcoholism a privilege of the (hic) better-off.”

    Though to be honest, it’s mostly a sign of a party that can’t think of any way to impact on society other than to try and influence the market by making things more costly. Most parties follow this line of thinking these days.

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  4. mikenmild (11,777 comments) says:

    Perhaps it should be more than $2. I’d be interested to now if there was a model that would predict consequences from different minimum prices.

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  5. mpledger (425 comments) says:

    When supermarkets sell below the price of production because they are using it as a loss leader than that is a real problem. There market dominance not only harms the alcohol industry (I’m thinking wine specifically because they tend to be smaller companies) but it encourages excess consumption. People tend to buy extra when things are on special but then change their consumption, rather than keep it the same, because the extra is right there in front of them.

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  6. Pete George (23,687 comments) says:

    Chauvel clarified things a bit via email but confirmed the open ended ability of ‘the Minister’ to set an unrestricted mimimum price.

    A minimum pricing regime could simply target that product, say by providing for a ceiling or cap of say $12 per bottle of wine so that other beverages were not affected. That would still double the price of the cheapest existing wine which can be bought at the moment for $6. Or it could be more complex.

    So ‘it could be double’.

    Obviously it would need not to create unintended incentives to purchase other products in lieu of cheap wine on which to preload, or to penalize responsible drinkers.

    I don’t know how doubling the price of bottles of cheaper wine would not create all sorts of ‘unintended’ incentives and disincentives.

    And any increase would penalise responsible drinkers. This sounds like trying to reassure responsible drinkers to their faces – while whacking them in the back pocket.

    All this SOP would do is allow price to go into the mix.

    With wide ministerial powers, no limitations, and unknown intentions.

    Alcohol abuse is a complex and difficult problem to address, but much more effort needs to aim at the problems rather than catching everyone in the crossfire.

    Ref: http://yournz.org/2012/07/05/charles-chauvel-alcohol-reform-bil/

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  7. mpledger (425 comments) says:

    An intersting experiment would be to have a fixed low price in the North Island and a non-fixed low price in the South Island and see the results.

    [DPF: I agree]

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  8. straya (85 comments) says:

    Personally I think the idea of minimum prices is rubbish. But if you are serious about implementing an idea of this kind, then put some thought in to the policy, perhaps along the following lines:-

    1. impose a tax per standard drink, so that rather than granting windfall profits to the retailers, the government receives the money and can direct the proceeds to meet the costs imposed by problem drinking;
    2. apply it as a marginal tax, reducing with additional units of standard drinks eg. $0.35 for the first eight standard drinks, $0.10 for the next eight, $0.05 for each subsequent additional drink. You might do more work on the numbers to avoid creating perverse incentives, but the principle (assuming you think minimum pirces are a desirable outcome, which I don’t) is to increase the price at the bottom of the market without making all products prohibitively expensive.

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  9. Sam Buchanan (501 comments) says:

    Labour – if something causes a social or environmental problem, tax it.
    National – if something causes a social or environmental problem, flip a coin, and either tax it, or smile and ignore it.
    Greens – if something causes a social or environmental problem, flip a coin and either tax it, or give those responsible a stern talking to.
    ACT – there’s no such thing as society or the environment.

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  10. Manolo (14,082 comments) says:

    mikenmild, apparatchik and unrepentant socialist, continues to push the cause of a minimum price (as instructed).

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  11. RRM (10,034 comments) says:

    That Labour are only now beginning to show signs of back-pedalling away from this awful policy shows you how utterly incompetent and out of touch with reality the NZ Labour Party is IMO. These people live in La-La land where they say any dumb thing, and their legion of lunatic followers cheer them, so they think “hey we must be saying the right things…”

    They don’t seem to understand that real people don’t want to sit at home paying bar prices to drink a basic bottle of wine while boycotting the Mad Butcher.

    It is painful living in a country with no competent, sensible mainstream left party. The greens have convinced themselves they should be a left party not an environmentalist party, and labour has gone all Lord of the Flies. I might have to start voting National…

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  12. ross69 (3,652 comments) says:

    > A minimum pricing policy with no detail on what they want the minimum price to be, is not credible.

    A bit like National’s assets policy, with the government unsure how much the assets will realise. But hey, what’s a few billion dollars between friends!

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  13. CJPhoto (227 comments) says:

    I dont understand the concept of the minimum price. That means two bottles of wine previously price $6 and$16 would now both sell for $16?

    As stated above, if they want to increase the price of alcohol, do it via an excise tax so the government benefits, not businesses.

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  14. ross69 (3,652 comments) says:

    > Lianne is advocating they increase 50% in price

    Don’t worry your cotton socks, DPF, this policy – although meritorious – won’t see the light of day. Ruth Dyson couldn’t afford it to see it passed. :)

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  15. mikenmild (11,777 comments) says:

    It would be like saying we want to increase the price of tobacco, but not specifying a minimum price per cigarette. The minimum price in itself is a bit of a red herring, sharply increased excise tax and regualr increases might be more effective. At the same time, of course, we should legalise all other harmful substances and tax them according to the relative harm inflicted. So, lower taxes for tobacco and marijuana, higher taxes for alcohol and methamphetamine.

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  16. Manolo (14,082 comments) says:

    I might have to start voting National…

    Not to worry, RRM. You would still be voting for the left.

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  17. Pete George (23,687 comments) says:

    That means two bottles of wine previously price $6 and$16 would now both sell for $16?

    In theory that’s how it looks. But in practice I think that medium priced wine would go up in price too. And the current specials – it’s common to get $5-10 or more off $15-25 bottles – would not come down to the bottom price, that would be nuts.

    So it is likely to push up all prices of wine.

    And where are alcopops in this? Would they be pushed up too? Or would the cheap market go there even more?

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  18. tvb (4,518 comments) says:

    Nah under Labour’s policy alcopops will be $2 per bottle. Yay lets get drunk as.

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  19. KevinH (1,236 comments) says:

    A recent Roy Morgan poll paints a comletely different picture concerning alcohol consumption in New Zealand and does raise the issue that emotion appears to be in conflict with statistics. For instance the age group identified as the biggest consumers are men 50+, and their preferred product being beer:
    http://www.roymorgan.com/news/press-releases/2012/1730/
    My view from observation is that wine is not the problem, alcohol pops such as Woodstock 8% are the problem because they are cheap and easy to get and are popular with young drinkers. If any price adjustments are to be considered RTD’s should be high on the list.

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  20. thedavincimode (6,877 comments) says:

    Manolo

    How did I know that was coming? :P

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  21. dime (10,134 comments) says:

    “They don’t seem to understand that real people don’t want to sit at home paying bar prices to drink a basic bottle of wine while boycotting the Mad Butcher.”

    lmao

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  22. slightlyright (94 comments) says:

    Though if ever there was someone suitable to talk on the perils of drink, its Lianne

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  23. Brian Smaller (4,026 comments) says:

    What the plebs save on “No GST on Fruit and Vege” can be used to pay for their more expensive piss.

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  24. Pete George (23,687 comments) says:

    Brian – if wine prices are hiked, how long will it take for a call to benefits to cover ‘inflation’.

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  25. Brian Smaller (4,026 comments) says:

    About ten seconds I would say.

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  26. Kiwi Dave (95 comments) says:

    Chardonnay socialists in action again.

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  27. plum (38 comments) says:

    Here is a discussion paper with some actual evidence, produced for the Australian government who are also looking at the issue:

    http://www.anpha.gov.au/internet/anpha/publishing.nsf/Content/min-floor-price-alc

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  28. rouppe (984 comments) says:

    If a cheap wine sells for $6, and an good wine sells for $15, you’d be mad to believe that after this, the “cheap wine” would be $12 and the good wine was still $15.

    The good wine would go to $20-25 to maintain their gap from the cheap stuff, and so the $20 wines would go to $30 and so on.

    An incredibly stupid idea. Once again personal responsibility, and consequences for ones actions are ignored. As I said before, drunk and disorderly is a current offence. Start arresting and charging drunkards with this, and have judges start issuing “forbidden to drink” notices. These can be followed up with mandatory breath testing weekly, with accompanying fines for failure, or even short jail terms.

    Thirty days in jail will soon change the behaviour of silly boys and girls

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  29. RightNow (7,013 comments) says:

    Using wine as an example (which seems to be de rigueur) if a producer is able to have their wine retail profitably at (say) $8 per bottle, a minimum price that pushes this wine into the same price bracket as a $15 bottle of wine will effectively kill the $8 bottle in the market. If you were going to pay $15 you’d go for the better quality wine.
    The unintended consequence is very apparent.

    A far more rational approach would be to increase the excise tax on alcohol uniformly, such that the $8 bottle might rise to $12, but accordingly a $16 bottle might rise to $20 (note the tax isn’t proportionate to sale price but to alcohol content).

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  30. Colville (2,300 comments) says:

    So you have a el cheapo bottle at $16 and you get 3 cans of baked beans free with it at the supermarket?
    I dont think it would take long for supermarkets to rort the system to enable a free market and discounting to apply again.

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  31. Manolo (14,082 comments) says:

    The delicate Charlie Chauvel only drinks the finest champagne around Oriental Parade in Wellington, so he couldn’t care less about the “masses” he claims to represent. He’s a tosser and waste of space.

    Yes, davinci, you’re a seer. Now tell me the winner of the second race at Ellerslie tomorrow. C’mon, mate.

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  32. Puzzled in Ekatahuna (346 comments) says:

    Going back to the graphic DPF was sent yesterday
    http://www.kiwiblog.co.nz/wp-content/uploads/2012/07/Labours-Alcohol-Policy.jpg

    Yvette says:
    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

    Mobile Michael says:
    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.

    So who is right, DPF graphic, Yvette, Mobile Michael or none of them? See how simple it would be?

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  33. RightNow (7,013 comments) says:

    Yvette is right WRT DB Bitter (it is only 3.5%)
    A 330ml can at 4% is 1 std drink: http://www.alac.org.nz/alcohol-you/whats-standard-drink

    I’m pretty sure Brenner is 4%, so not sure what Mobile Michael is basing his calculations on – either a larger can (440ml) or a stronger beer.

    PS _ I like that (according to the alac calculation) a 3 litre cask of wine is 30 standard drinks, so would cost $60 under Charlies Law

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  34. david (2,564 comments) says:

    Drawing this along its logical path of development. The <$10 wines would be offered at the same discounts as currently given to the supermarkets but to overseas buyers who would swoop like rabid dogs on this sudden windfall of product that they can dump on their markets with lots of hype about "cheap NZ wine" Result – the price distinction currently enjoyed by NZ wines offshore ( in the Oz and British markets in particular) would vanish followed by an enormous shakeout in the NZ wine industry where the number of labels would dramatically slump and the average bottle price for all NZ wines exported would fall back when we are newly perceived as "low cost producers" and put in the same category as Chile and South Africa.
    In NZ not much would change except that what were once medium priced wines would congregate at the "minimum retail price" level, a few thousand jobs would be lost and several thousand Vanuatuans and Pacific Islanders would be unable to come to NZ for seasonal work thus causing an increased need for foreign aid.
    Stupid, stupid Labour

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  35. thedavincimode (6,877 comments) says:

    Manolo

    Its Te Awamutu and Awapuni in the north tomorrow. Alexandra Park tonight.

    I’m picking that Lucia will be betting the Church on no. 2 in the 2nd at Alexandra Park. In the first there, I’m picking grumpy will be on no. 1, eastbay and nasska will be on no. 3, scotty qwiss, Scott II, tristanb & co will on no. 6. The demented waterwoman will be backing no. 8 in race 4 and The Great Masturbator will be on no. 5 in the fifth usiing our money. Expect Ewen Macdonald to bet heavy on no. 6 in race 7.

    At Te Awamutu tomorrow, I expect that Darren Hughes will like the look of no. 9 in race 3 and no. 19 in race 5. Expect Johnboy to see some action with no. 13 in race 6; an unlikely prospect for most but not for him.

    Awapuni tomorrow – I like the look of no. 2 in race 5.

    Shane Jones will probably favour some (betting) action across the ditch – expect him to put the treaty settlement on no. 2 in race 3 at Melbourne. Possibly the demented waterwoman will be casting around to spread her risk in which case she’ll also opt for no. 16 in race 8.

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  36. Manolo (14,082 comments) says:

    Brilliant. Your tips are a sure thing and akin to money in the bank.
    Please accept my libertarian thanks.

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  37. thedavincimode (6,877 comments) says:

    Make sure you make some libertarian money.

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  38. thedavincimode (6,877 comments) says:

    oops correction. Johnboy race 6 no. 13 at Awapuni, not Te Awamutu

    … breaking … maybe Darren Hughes will also like no. 7 in race 4 at Brisbane

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  39. mikenmild (11,777 comments) says:

    Surely big bruv will be on No 10 in race 6 at Te Awamutu?
    And I think Lucia will probably look for the quinella on 1 and 7 in Race 5 tonight at Alexanadra Park

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  40. thedavincimode (6,877 comments) says:

    … and I’m very sorry about this but by now you will also have realised that of course the mad waterwoman would be on no. 16 in race 8 at Brisbane, not Melbourne.

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  41. thedavincimode (6,877 comments) says:

    milky

    You might be onto something there. :P

    It just goes on …

    dime on no. 6, race 4 at Te Awamutu

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  42. mikenmild (11,777 comments) says:

    Although the fastest in that race actually looks to be No 3.
    And F E Smith would sure rate No 6 in race 6 at Te Awamutu.

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  43. WineOh (630 comments) says:

    Artificial minimum price controls are ridiculous & don’t work. The system always finds a way to defeat it.
    An excise duty would be a cleaner and more efficient way of doing it, though the way this is currently collected is by the manufacturer (eg- winery, brewery). The infamous ‘sherry’ tax was another attempted way of discouraging problem drinking, it increased excise duties on a band of drinks that were seen to be a high target for youth drinkers (RTDs) however inadvertently raised the tax on fortified spirits like brandy & sherry, and the youf just switched to harder drinks like vodka where they could maximise their drunkeness per dollar spent ratio.

    If any government is really serious about addressing alcohol harm, don’t both taxing it any more or legislation, just enforce the existing liquor laws that we have. How many folks have gone down Courtenay Place after midnight & experienced the amount of drunkeness in and out of licensed premises. Liquor facilities are NOT ALLOWED to have drunks on the premises, much less serve them. The cops already have the laws to do it, they just don’t have the political will to do so.

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  44. mikenmild (11,777 comments) says:

    That’s a question as to whether the best strategy is to reduce alcohol consumption overall, or just address alcohol-fuelled behaviour. Might I suggest we could do both?

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  45. thedavincimode (6,877 comments) says:

    Expect The Great Masturbator to invest more of our money on no. 3 in race 5.

    Look for Bereal to have a wee taste of no. 2 in race 9 at Alexandra Park. Scotty might like some more action with no. 6 in that race, and perhaps even no. 2 in race 7 at Addington tonight.

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  46. Pete George (23,687 comments) says:

    mikenmild, if you address the worst alcohol-fuelled behaviour you will reduce overall consumption.

    But why should I be forced to reduce my consumption?

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  47. mikenmild (11,777 comments) says:

    Pete – you are partially right. Reducing consumption isn’t just about behaviour though – it’s about overall health and safety benefits. No one would be forced to reduce consumption.

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  48. Pete George (23,687 comments) says:

    But the aim of increasing prices substantially is to force consumption down. They can”t claim it would force heavy drinkers to drink less and light drinkers to not change their drinking habits.

    What’s likely to happen? I’ll have a glass or two every third day rather than every second day perhaps. And heavy drinkers will suddenly be able to say no after 10 drinks instead of after 15 drinks?

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  49. mara (797 comments) says:

    Fixed low prices in the North Island? Really? The Cook strait ferries would sink under the extra weight of grog being ferried.
    Also, why should I, on a low fixed income, have to pay an extra sin tax because the Police will not lock up and fine the yobs who are chundering and fighting in Queen St and scaring away the delicate Oriental flowers who may no longer bloom at night. Govt. should remember what its core job really is …. to ensure and protect the safety of the public. This duty is NOT best done with yet another tax. I am righteously pissed off that it even needs saying. Again.

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  50. slijmbal (1,236 comments) says:

    “When supermarkets sell below the price of production because they are using it as a loss leader than that is a real problem.”

    This myth keeps doing the rounds. Supermarkets rarely do loss leaders. They just don’t need to and actually cannot afford to as their margins are too tight. They have suppliers climbing over each other to get their products on supermarket shelves as it’s often the route to success for the supplier. All those discounts you see on the shelves are typically the supplier dropping his prices with the supermarket contributing where it does not cannibalise their other sales. Supermarkets make better margins from booze than they do from dry goods. They make less margin than other liquor outlets but ship the volumes.

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  51. Steve (North Shore) (4,592 comments) says:

    Liarbour has always had a problem with numbers and Dalziel is no exception.
    Variable Math works well for them

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  52. Mr_Blobby (191 comments) says:

    I think we should have maximum prices on fruit and vegetables.

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  53. mara (797 comments) says:

    Mr Blobby. Are you personally fat and blobbery?

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  54. swan (665 comments) says:

    With such socially conservative policies, I’m beginning to wonder – has Labour got in bed with the exclusive brethren?

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  55. krazykiwi (9,186 comments) says:

    WineOh 3:43 – Completely agree. The current laws are not enforced, when they should be. If they were enforced, and the yobbo problems persisted then I’d support other options. But the usual leftist approach to regulating more aggressively is designed to feed their addiction to control moreso than it is to addessing some perceived need.

    swan 9:32 – That would make for some interesting reality TV :)

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  56. Liberal Minded Kiwi (1,571 comments) says:

    What is Labours definition of a “very good wine”? What on earth gives a the left the right to decide how much we should drink before going to a pub that has been regulated within an inch of itself by the previous Labour Govt (and upheld by the sad excuse of a non nanny state National Govt)

    We drink because NZ is a bloody awful place to live in sometimes. Don’t take this away from us.

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