The Treasury is betting on minimum unit pricing to curb the binge-drinking hordes and save us from ourselves.
The idea is simple: set the floor price for alcohol to make it less affordable, especially for heavy drinkers. On paper, it sounds like a sure-fire win-win. But if history has taught us anything, it is that when powers that be meddle with prices, the plot thickens in unexpected ways.
The theory is that by making alcohol more expensive, especially the dirt-cheap kind that fuels the country’s dinking problem, consumption will plummet. Citing studies from countries such as Scotland and Wales, where minimum unit pricing is heralded as a public health victory, the health experts nod approvingly.
But here’s the kicker: SA is not Scotland. We have a flourishing illicit alcohol market that has already crept its way into our daily lives. Estimates suggest that up to 22% of our alcohol market is illicit. Almost a quarter of the alcohol consumed bypasses any formal economy checks. Making legal alcohol more expensive will not make this black market shrink; it will turbocharge its growth.
Let’s not forget the lessons from the Covid-19 lockdowns. The government thought it was doing us a favour by keeping booze off the shelves, but all it did was reinvigorate the black market. People turned to illegal sources to get their fix, leading to an increase in illicit trade. This not only undermined the intended public health benefits of the ban but resulted in economic losses. The SA Liquor Brand Owners Association estimated a R13bn loss in tax revenue, which could have been used for other critical measures, such as vaccine procurement.
Now, the Treasury is considering imposing minimum unit pricing, which could have similar unintended consequences. Think of it this way: if minimum unit pricing makes your favourite cheap drink as pricey as top-shelf liquor, where do you think the average cash-strapped drinker will turn? Hint: it’s not sobriety. Instead, they will flock to backstreet brewers and dodgy distributors whose products can be more dangerous than the hangover they are trying to avoid. This would not only undermine the policy’s health objectives but worsen the very problems it seeks to solve.
The economic effect on low-income earners cannot be ignored. minimum unit pricing is inherently regressive, hitting the poorest the hardest. While the intention is to reduce consumption, the reality is that those with alcohol dependence may simply cut back on other essentials to afford their fix, leading to further social and economic harm.
To avoid turning minimum unit pricing into a loaded gun aimed at our collective foot, it is essential to implement it alongside robust measures. This means tightening law enforcement to crack down on the illicit alcohol market — something easier said than done in a country where enforcement resources are already stretched thin. It also means investing in consumer education, so people understand the risks of drinking counterfeit alcohol.
The bottom line is that while minimum unit pricing might look like the way forward in the policymakers’ playbook, the reality tends to play by its own rules. Without complementary measures, we risk turning a well-intentioned policy into a catalyst for even greater problems. The Covid-19 experience has shown us the potential pitfalls of such well-meaning but ultimately counterproductive policies.
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