There’s a very sad, at least to me, story out of Scotland that points out the limitations of using taxes, fees, etc. to alter consumer behavior.
An article in The Guardian examines the effects of a policy in Scotland that sets a minimum price for alcoholic drinks, especially “low-cost, high-strength drinks.” They have to cost at least 50 pence (about 63 cents) per serving. As The Guardian describes it, this was a flagship policy of the Scottish National Party, fought tooth and nail in court by the Scotch Whisky Association but introduced in 2018.
I’d like to see any place in the United States where you can get a drink of water for 63 cents, but apparently 50 pence is a big deal in Scotland. It’s enough so that a year after the introduction of what’s called Minimum Unit Pricing (MUP), alcohol sales reached their lowest level in 25 years.
However, MUP seems not to have changed the behavior of the consumers who need it the most: hard-core alcoholics.
According to a study commissioned by Public Health Scotland, not only did such people not alter their drinking habits after MUP; the poorest ones cut back on heat or food to keep up their levels of alcohol consumption. Worse, it found that most of them didn’t understand what MUP was or why it made their drinks more expensive.
As I said, this is very sad. But it’s no surprise, at least to me. Drug addicts are undeterred by the illegal status of what they crave; why would an alcoholic be put off by paying a little more for a drink?
That’s not to say that “sin taxes” are invariably wrong. At a minimum, they can be used to help clean up the mess made by the products they apply to, by funding health and addiction services. But anyone thinking of them as some kind of magic bullet to save people from the perils of overconsumption of alcohol – or of sugar, fat or anything else that’s unhealthy – doesn’t understand the nature of addiction.
Pan Demetrakakes is a Senior Editor for Food Processing and has been a business journalist since 1992, mostly covering various aspects of the food production and supply chain, including processing, packaging, distribution and retailing. Learn more about him or contact him
