What price for an extra-ordinary commodity? ( Editorial )

Abstract

The Scottish Government can make laws independently of the London (Westminster) government, but taxation within the UK is not devolved. Thus, the Scottish Government, when proposing measures to reduce harm from alcohol, cannot raise alcohol-tax to increase the price of alcoholic beverages. Instead, especially to reduce the sale of very cheap alcoholic beverages such as industrial cider (Gill et al., 2010), it has proposed legislating a minimum price per unit (e.g. £0.40 or £0.50 per 8 g ethanol; £1 = 1.6 US$ or 1.2€). Very cheap alcohol has been increasingly used as a loss-leader (sold at below cost to attract purchasers of other products) by UK grocery retailers: it has even been reported that the sales tax (VAT) on promotional offers is reclaimed by the retailer because such offers are advertising. (‘taxpayer picks up cheap booze bill’: Bayer, 2009.) …