Et Tu Social Market Foundation?


This looks reasonable on the face of it. Then a modicum of thought shows us that it’s just the same old tripe dressed up in a new sauce:

Wine lovers pay seven times as much alcohol tax on a glass as cider drinkers, study shows

Yes, they do. And the reason why they do? Because they will.

Wine lovers are paying up to seven times the alcohol duty per glass as cider drinkers, a new analysis reveals amid calls for a change after Brexit. The study shows drinkers of a low-strength wine, at six per cent alcohol content, are paying 50p duty per unit compared to 7p per unit for the same strength alcohol. This reflects EU regulations that require wine and cider to be taxed according to the volume rather than the strength. The Social Market Foundation (SMF) think tank says the UK should take advantage of Brexit to overhaul duty on alcohol so that the stronger a drink is, the more tax it incurs.

It says its “duty strength escalator” would not only simplify Britain’s complex duty system but also provide financial incentives for healthier drinking habits and for the industry to produce more low-strength alternatives.

And that is all just minimum pricing dressed up in that new sauce.

So, why do we charge lower duty on cider? Because it is – traditionally at least – the rural working man’s drink. And we think it righteous that the rural working man, generally on a lower income, gets dinged for tax less than the effete urban middle and upper classes who are the traditional wine drinkers.

We think this is righteous when we talk about income tax, we think it right when we talk about the rates, we think it just when we talk about booze taxes.

There is also the very point that the SMF are making, which is that cider consumption seems to be more elastic with respect to price than wine. Which is a good reason to tax it less, isn’t it? We generally thinking that taxation of things inelastic with respect to price being a good idea.

But if you spot significant resistance to the idea that the poor should be charged lots for their booze through minimum pricing why not gain the same effect by another route?

Well, if you’re the sort of Puritans who run the Social Market Foundation at least…..