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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 DĂșn 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.

Wednesday, September 19, 2012

More minimum pricing news

An article in Decanter states that the Bulgarian Government intends to object to the European Commission (EC) over Scotland's plans to introduce minimum pricing at £0.50 per unit of alcohol. Now, the Scots defence will be that minimum pricing can be demonstrated to have proven positive effects on alcohol-related harms and they believe that will be a sufficient defence.

Bearing in mind last year's decision by the European Court of Justice (ECJ) in relation to gender-based car insurance premia, this my yet prove to be wishful thinking. Up to now, in Ireland and the UK, car insurance premia were set based on the likely risk posed by the person being insured. Young men crash cars far more than women, generally, and so they paid a higher premium (mathematicians might dislike a frequentist approach but I'm not sure there is a better way in this instance).
However, the ECJ decided that this was unfair on equality grounds and the practice has to stop by 31 December of this year. So, what if the EC takes a similar approach given the clash of philosophies: do right by the consumer on health grounds or do right by the consumer on competition grounds?
Another interesting question is what would be the minimum price of a bottle of wine? One unit of alcohol is 10 mL pure alcohol, or 1 cL pa. In a bottle of wine (75cL) at 12% abv then there are 9 units. At a minimum unit price of £0.50 that would mean a minimum selling price of £4.50. I wonder, how much Bulgarian wine is sold lower than this? Given UK duty is £1.90 per bottle, VAT is 20%, shipping and warehousing are about £1.00 per bottle, then a £4.50 RRP wine comes in at £0.85 to cover all margins plus cost of production!
Possibly the Bulgarians are being altruistic and want to object so that the principle can be tested but it's hard to see what benefit there will be for consumers if the net result is lots more really cheap product gets sold. Very low margins to pay for jobs, and easy access to alcohol for those who least need it - are these principles of a higher standard?

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