The introduction of a minimum price for alcohol is a contentious issue and allows for some great analysis and evaluation.
Here are some notable advantages and disadvantages to the plans:
* it is argued that the increase would dissuade consumption of cheap alcohol, thereby reducing the social costs associated with drunken anti-social behaviour amongst young people.
* it is argued the the policy is well targeted in tackling the types of alcohol that lie at the heart of the anti-social behaviour and demands upon emergency services, since these issues largely come about through younger people drinking cheap strong cider and lager.
* Ministers believe the policy could be good for pubs, by encouraging those who might otherwise buy cheaply priced alcohol from supermarkets to go to the pub to drink.
* Alcohol is clearly highly addictive and highly price and income inelastic. Therefore drinkers will still find a way to consume and this may lead to increased crime or less consumption of other goods (including merit goods perhaps) in order to pay for it. However, advocates of the policy may point to a wider range of measures being introduced including flexibility for local authorities to restrict licensing hours and use sobriety enforcement orders to police this problem.
* There is little prospect of tax revenue being raised from this policy to tackle the ongoing negative externalities of binge drinking, including health costs as well as social costs.
* Some argue this policy is unfair on responsible drinkers who will suffer through seeing prices rise when consumers have hard pressed budgets already. I wonder whether it would enable wine retailers to put up prices of their mid and top end products in order to continue to differentiate them in price from the cheapest products currently beneath the proposed 40p per unit threshold. On the other hand, others claim this policy does nothing to target middle-class people who have been identified as consuming in excess of the guidelines.
* There is concern that this will simply help to boost the profits of retailers, who will be forced to increase prices but will take the opportunity to increase the profits they make on the price they purchase the alcohol for from producers.
Here are some links that apply the theory to reality.