Wednesday, February 9, 2011

Lowering the cost of beer would be a winning issue for Hudak

Ontario PC leader Tim Hudak mused on Monday that many Ontarians miss a buck a beer (I certainly miss it). Premier Dalton McGuinty dismissed any discussion of the government enforced price floor as a “distraction” from more urgent issues. There is also the suggestion that it would some how be irresponsible to allow people to buy a good at market price. I thought I would take a moment to address both of these points.

If his point is that beer prices shouldn’t be the main focus of the next provincial election, I agree with Mr. McGuinty. The focus should be his abysmal fiscal performance and the resulting economic mess that is the province of Ontario.

That being said, there is not reason why “Premier dad’s” growing interference in the lives of responsible adults should not be an important side issue of the election. The attitude of the current Ontario Liberal leadership seems to be that the entire population of Ontario is made up 15 year olds. I agree that a 15 year old should not be drinking 1$ beer (as slightly hypocritical as that position makes me) but there is no reason that an adult shouldn’t be allowed to buy beer at any price that he/she can negotiate.

Surely we can include this debate without “distracting” too much from Mr. McGuinty’s other failures.

There are those that would disagree with my claim that there is no reason adults shouldn’t be treated as adults when it comes to beer prices. That position is presented in this CBC article:
Juergen Rehm, the director of social and epidemiological research at CAMH in Toronto, which treats addiction and mental illness, said there's a reason beer prices are higher.

"What [Hudak is] saying is actually contradicting all science about the consequences of such a move," said Rehm.

"We know that if prices would actually be lowered, the death toll would increase. Of course there's tremendous costs also with the non-fatal consequences of alcohol, all the hospital costs, all the costs in criminality, etc."
I will ignore that he refers to sociology as a “science,” because my reflex is to simply tune out anyone who makes such an absurd and misguided claim. Instead I will look at core assumption of the above statement.

Mr. Rehm is assuming that alcohol is the cause of personal and social problems. For him, more access to alcohol means that there would be more criminals and binge drinking. Such a claim is completely unsubstantiated. Someone with a psychological dependency on alcohol and drinks in a destructive manner would be willing to pay a high price for beer. They have already thrown away their health and their lives so why wouldn’t they spend a few dollars more?

The people that are actually affected by a price floor in beer are the responsible drinkers. The drinkers that enjoy an odd beer here and there may decide to drink less if the cost is higher, but such drinkers are not the ones being cited by price floor proponents. The people that they want to help are not helped by price floors and everyone else is hurt by a higher cost or a less than optimal beer supply.

This is not a difficult case to make because most Ontarians intuitively know all of this. The average beer drinker knows that they are being hurt by price floors and they know that a drunk is a drunk regardless of the price. If Mr. Hudak sticks to his guns, this could easily become a winning issue for him.

1 comments:

Martin said...

Beer, like most food basics has a fairly inelastic demand curve. Setting a floor price does very little to curb consumption. The real reason McGuinty raised a floor price was as a favour to international brewing giants who don't want to compete with budget brands. Of course, it also raised government tax revenues, but that was an minor consideration...
It is nonsense to claim increased drunkeness and social mayhem because of lower beer prices, the reduction is not that great. If this were the case, Ontario could easily regulate supply through reduced store hours, something it has done in the past. Instead, Ont. wants to have it both ways: avaiability of alcohol almost anytime, while worrying about excess consumption.
With an increasing addiction to alcohol profits and taxes, Ontario is in an insupportabel conflict of interest. Perhaps it is time for the government to relinquish alcohol sales to the private sector.