What is Minimum Alcohol Pricing?

Minimum Priced Alcohol BottlesDepending on where you live, you may be used to spending next to nothing on your favorite drink when you’re at the bar or picking up booze at your local store. There’s nothing wrong with that, right? The less money you have to spend to get your drink on, the more cash you’ll have for things like clothes, rent, and, yes, more cocktails.

If you live in region where a bottle of water costs more than a beer, however, you may have noticed that there are wasted people in your neighborhood all the time. Or, your community may be known as a really good place to party, but not necessarily somewhere you want to bring the kids. Then again, you might live somewhere where people are really responsible drinkers but who are also really glad that booze doesn’t cost an arm and a leg at the same time.

If you live in a state or country where alcohol is really cheap, and there are also a lot of social problems, then you’ve probably heard of minimum alcohol pricing. So what is it? It’s a hotly debated type of legislation that could be coming to your town.

What’s the point of a minimum charge?

Basically, the idea behind minimum alcohol pricing is that, if booze is more expensive to buy, then people will drink less. Why should anyone drink less, you might be asking? That’s a fair question.

Although the only drinking-related issue most people get is a mind-splitting hangover and an insatiable appetite for greasy food, the reality is that alcohol abuse can cause serious social problems. Yes, issues that are far more troubling and costly for society than people making out on dance floors or vomiting in cabs (as bothersome as those problems are).

For example, according to the minimum pricing campaign in the United Kingdom, two people are brought to British hospitals every minute due to alcohol abuse. You might be still asking, but how does that affect anyone else? Well, the campaign also notes that alcohol abuse costs British taxpayers over 20 billion pounds annually (roughly equivalent to $30.4 billion) in spending that is tied to the nation’s healthcare and criminal justice systems.

But does that mean raising the price on alcohol will lower those costs? Won’t people just find a way to drink the same amount? After all, who needs to pay the heating bill if you have a nice buzz going?

Well, the minimum pricing campaign in Britain cites a study by the University of Sheffield, which concluded that raising prices on alcohol would significantly reduce alcohol-related incidents. According to the study, by establishing even a modest minimum price at 50 pence per alcohol unit (that’s just under $1), hospital admissions would be reduced by nearly 100,000 people and 3,000 lives would be saved annually.

In the Province of British Columbia, Canada, minimum pricing for alcohol was introduced several years ago. After the price on alcohol was raised by 10% across the board in the region, the amount of drinking-related deaths fell by over 30%.

How does it work in restaurants or bars?

Contrary to what some people might think, minimum alcohol pricing does not mean that every restaurant and bar throughout the nation has to charge the exact same amount. Just because alcohol becomes more expensive, doesn’t mean that the other operating costs like rent and wages magically disappear. In other words, if you live in a relatively quiet community with a low cost of living, chances are that your local establishments won’t have to charge that much more for booze.

So, in the case of a restaurant or bar, the establishment must pay a certain amount to acquire beer, wine, and spirits, and then, in turn, they are free to charge whatever they deem necessary above that. If the bar is in an upscale part of a major city, and the cost of rent is through the roof, then they may have to charge a lot more than the minimum price.

Since the primary reason for minimum pricing is to reduce problems related to intoxication, the higher the alcohol content, the higher the price.

For example, a bottle of whiskey will have a higher minimum price than the same sized bottle of wine, since you can get way, way, way drunker off whiskey. Or, a certain type of beer that has a higher amount of alcohol than another will also cost more.

What if I’m drinking at home?

Unless you have your own distillery, then minimum alcohol pricing also applies to drinking at home, since liquor and convenience stores also have to pay more for booze. At the end of the day, drinking at your friend’s place or your own will still be less expensive than going out, since the point of a restaurant or bar is to make a profit.

Plus, by hanging in rather than going out, you won’t be spending cash on additional things like tips, coat check, or cover charge. You’re also far less likely to buy that table of good-looking folks beside you a round of drinks.