Want to Save Pubs?: Support Minimum Unit Pricing of Alcohol

13jour600.1The Economist is among the world’s indispensable newspapers, but it has a University of Chicago-style blind spot concerning any restrictions on psychoactive drugs. I therefore generally regard it as an endearing British relative who has one annoying quirk, but now I can be unambivalent in my affection: The Economist has endorsed minimum unit pricing of alcohol.

I describe the policy in detail here, but the gist is that regulators set a floor under the price of alcohol. The Economist describes this as a “windfall” for producers and retailers but this is not correct: The increase in price lowers volume of sales to the point that it’s a wash for sellers (fewer sales, but higher profit per sale). The true windfall goes to the public, who benefit from decreased deaths, accidents, crimes and emergency room visits.

Minimum pricing is also, as a member of the UK Parliament and I pointed out in submitted evidence, exactly what the ailing UK pub industry needs to get back on its feet. Some critics of minimum pricing howl that “responsible pub drinkers should not have to pay for the damage of boozing by violent yobs”. This is completely wrong-headed, because alcohol prices in pubs are already far above even the highest proposed minimum price. Minimum pricing is directed at rock-bottom price sales of alcohol in supermarkets, which are killing the pubs by undercutting the price of their number one product.

Pub-goers who are losing their beloved watering holes are thus suffering not from minimum pricing, but from a lack of it. Andrew Sullivan laments, as I do, the decline of British pubs, but his series of posts on the topic has not highlighted how Tesco and similar supermarket chains have hurt pubs by flogging high strength, low cost alcohol. Sullivan passed along the claim that anti-smoking legislation is one cause of pubs’ declining fortunes, which sounds like tobacco industry propaganda and has been empirically disproven. The return of customers who don’t like tobacco smoke isn’t hurting pubs; alcohol being sold at ultra-low prices by competitors who can make up the lost revenue on other products is.