End of " Cheap Booze " !

The Royal Australian College of Physicians has called on the New South Wales government to both retain this state's lockout laws and make alcohol more expensive to curb the health risks from over indulgence. They suggest that this could be achieved by a law change that introduced a new minimum floor price which must be charged for each drink containing alcohol.

This is clearly an attack on the price availability of cask wine.  Most bottle shops have four litre casks of wine on their shelves with a price tag of about $13 per cask.  The doctors are demanding a floor price of $1.30 for each standard drink.   As each four litre cask contains the equivalent of forty standard drinks they are now priced at just 32 cents per standard drink.

Applying that price of $ 1.30 for each standard drink to cask wine would increase that four litre cask to $52.  There would also be a consequent price increase for the lower end range of bottled wine, but it is hard to imagine many people continuing to buy cask wine at that price, and that is exactly the outcome the doctors envisage.

Perhaps the doctors would be wise to remember Newton's law.    To every action there is an equal and opposite reaction.   Hike the cost of cheap booze and many will look for an alternative - and the suppliers of ICE will happily fill that vacuum.   Thankfully, the tragic outcome  of the introduction of prohibition in the United States will not be lost on our politicians.  Taking the price out of reach of the lowly paid is similar to closing down liquor outlets.

We are reminded that last August just such a measure became law in the Northern Territory and a standard drink price of $1.30 was applied to cask wine there.  It seems that cask wine has virtually disappeared from bottle shops and new patterns of replacement are emerging.  We would be very unwise to rush in with legislation until the outcome in a much smaller state becomes crystal clear.

This proposal will also have a dramatic effect on the burgeoning Australian wine industry.  Our wines have achieved distinction both here and overseas and the wine makers have a wide choice from many grape growers.  The profitability of wine making is governed by its ability to dispose of products falling short of premium quality by diverting them to cask wine.  Should we destroy that market the entire cost spectrum will be altered.

We would also do do well to think long and hard on our lack of success in stopping smuggling.   We make spectacular drug busts, but illicit drugs are still widely available on the streets and when we hiked the price of tobacco we quickly found untaxed cigarettes flooding into the country.   Our porous borders will quickly react if we present a new sales opportunity.

No country in the world has managed to tax the ills that afflict humankind out of existence.  The law of supply and demand is paramount, and we are devilishly clever at finding alternatives.   This is a proposal that needs to be considered with great caution  !