“The UK government has recently considered introducing a minimum price scheme for alcohol. Discuss the likely economic effects using correctly labelled supply and demand diagrams to explain and illustrate your answer.”
A policy in which minimum price is fixed for a unit of alcohol is called Alcohol minimum pricing. Alcohol cannot be sold below the given price. By initiating a minimum price per unit of alcohol, beverages with a high number of units that are at present being sold at low cost are largely effected in price through the introduction of this policy (Bill, 2012) In UK, with the consumption of alcohol, the number of deaths caused is approximately 40,000. This proposal was introduced by David Cameron the Prime Minister of UK, after the raising concern in health crisis. A study indicates that planning a minimum price of 30p per unit would prevent 300 deaths a year, 40p about 1,000 deaths, and 50p more than 2,000 premature deaths. Forcing firms to charge a minimum price could be illegal under European law, says the Business Department (Winnett, R. and Mason, R., 2011) The main aim of this proposal is to eradicate the availability of cheap alcohol which will alongside terminate the consumption of alcohol in susceptible groups such as young drinkers or heavy drinkers who might be buyers of low worth products. This essay is an overview on the current situation as well as what alternative measures can be taken.
The minimum price for alcohol will affect all types ...