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Hi, I'm a Master of Wine (MW) having passed in 1997. I am about to open a wine shop in Dún Laoghaire, Ireland, called The Wine Library and this is my wine blog. There should be no conflict of interest between my work with The Wine Library and the opinions expressed herein but I will do my utmost to be fair and responsible in my posts – please read my Who Pays article. I have worked in wine education, retail, and consultancy. From June 2013 until May 2017 I was the Retail Manager for The Wicklow Wine Company. I was a member of the Council of the Institute of Masters of Wine (IMW) from 2008 to 2014 and was also a member of the Events, Trips and Governance Committees Having had problems with potentially libellous comments from unidentifiable posters, I now require that if you post a comment, you must identify yourself properly or it won't be published. Please note that I do not review products or services on request so kindly don't ask. I value my independence and I believe my readers (few that they may be) do so also.

Sunday, January 8, 2012

Minimum pricing revisited

The Irish Sunday Tines carried a story today claiming that the government is considering introducing a minimum price for alcohol of €0.55 per unit. I don't buy the paper and don't subscribe to the online edition but it was reported on Today FM news today. Consequently I'm not sure if this measure relates only to beers and own-label vodkas, as reported in the news bulletins, or across the board.

The unit price stated, €0.55, suggests that a can of beer could be sold for no less than €1.10 as the average can of 4% abv beer has 2 units. I assume that for wine, the minimum RRP would be determined in the same way. So, for a 7.5% riesling from the Mosel, the lowest price at which this wine could be sold is €3.09. Since that equates to an FOB price of €0.18 per bottle, I think that's an impossibly low price to begin with.
For the very popular 15% Amarones or Australian shirazes the minimum would be €6.19 - again, the vast majority of these wines are already well above this price.
If my assumption about how this scheme would work is correct then the vast majority of wines drinkers will be unaffected by minimum pricing, which is interesting.
Of course, the whole notion of minimum pricing causes quite extreme reactions among the trade but, as I have stated before, I believe it will arrive and that the industry would be better off preparing for it rather than throwing its collective toys out of the pram.
As I mentioned before it has been Irish government policy for over 20 years to introduce measures such as these; if you care to read the background material cited in the Alcohol Action Ireland website (actually read the documents - WHO, RAND, SLAN etc) then you should find it difficult to actually argue against some form of price control.
Anyway, I'll prepare for the onslaught of poorly expressed and thought-out counter arguments but, if my assessment of the government's plan is correct, than actually it's not too bad. I wonder how many will respond by stating that the unit price isn't high enough?

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