Cross border raid!

Thursday January 5, 2012

Tom Miers explains how artificially increasing the price of alcohol in one part of the UK will hit the moderate drinker and cost jobs

Eight miles from the frontier, the opportunities for cross-border trade are becoming more lucrative. Locally, the administration has launched a crusade against the demon drink. Booze outlets on the other side are rubbing their hands with glee, while on this side of the river they are getting ready to hammer up the clapboards.

I’m talking, of course, about the Anglo-Scottish border, which since Elizabethan times has been free of the kind of nefarious traffic that seems set to reawaken – in milder form of course – under her namesake successor.

The Scottish Government has already banned ‘two-for-one’ promotions, and now wants to set a ‘minimum price’ for alcoholic drinks. As with all sin taxes, this opens up both moral and practical problems.

Why should those who drink be penalised like this? These measures will of course hit the moderate drinker as well as the binger.

And it will of course encourage drinkers to go elsewhere to buy their liquor, damaging local businesses.

One apologist claims that the amounts involved are too small to provoke cross-border booze raids. No-one from Aberdeen is going to do their weekly shop in Berwick because of this – think of the petrol costs.

Perhaps so. But if the minimum price is too low to have an effect on shopping habits, it will definitely have no impact on the volume consumed. Certainly not by those out to get hammered. So to have an effect, the price floor will have to go up, and you can be certain that the same health ‘charities’ now lobbying for this law will soon be upping the ante.

Most Scots live within an hour or two of the Border, and many make regular trips south for work or leisure. As soon as there is a significant arbitrage in the price of alcohol, thousands will make it worth their while to stock up across the border on their way home, perhaps even making special trips for friends and family.

But an even more sinister development is in the offing. The Scotch Whisky Association has pointed out that a minimum price hits cheap alcohol but not the more expensive brands. The measure can therefore be portrayed as penalising unfairly producers of inexpensive booze. A Portuguese wine producer has been hit, while the maker of say, Champagne, is unaffected. Or malt whisky.

Within the EU this gives grounds for legal challenge, but more generally it provides a great excuse for retaliatory action on our own high value products. Asian spirits producers have always been trigger happy on the tariff front, to the great detriment historically of Scotch whisky and other high value exports.

Tom Miers is Editor of the Free Society. A version of this article appeared in The Scotsman on 3rd January