Minimum price for alcohol

The news today includes the Supreme Court ruling that the Scottish Government can set a minimum price for alcohol, ending a five year legal battle – link

Whilst I understand the reasons behind this in terms of potential benefits for health, as a marketer it seems wrong to impose a minimum price, or actually any price restrictions at all. What this does is take away one element of the marketers toolkit, and that is my concern. I’m not a fan of government interference in markets generally and the news today should raise concerns about what might be next. What if it is decided that the product or service you offer is priced too cheaply, what impact could it have on your business if you had to increase prices? It’s the possible future extension of the principle that could have far reaching implications. In marketing mix terms, however, it is 25% of the tools taken away (working on the basis of alcohol being a product and therefore the 4Ps being appropriate).

It is also interesting to consider the other implications, not least the point raised in the BBC article that because it will lead to increased profit the retailers will have an incentive to promote more, possibly negating the price increase effect – and that could be better than cost neutral for marketers. It will also be interesting to see the impact on cross border trading – will there be “booze cruises” from Scotland to England? The managers of Morrisons and Asda in Berwick Upon Tweed should be planning for the extra business already.

So is it right to “reward” retailers with higher profits rather than encouraging them to sell responsibly and people to drink responsibly? Is it a wider marketing issue, or is it a marketing issue at all? What do you think.

Recent Articles