The Pub trade is dying - Minimum price for Alcohol?

Sofiztikated

MadYaker wrote: »

I don't think so. I'm not arsed searching but I read, I think on the Irish Times website, that at the moment the minimum prices being proposed worked out at something like €18 for a bottle of spirits, €8 or €9 for a bottle of wine and I think around €1.80 or €1.90 for a can of beer? I could be a bit off the mark there.

They can't use it to increase the price of all drink since what they're doing is introducing a minimum price per gram of alcohol. So stuff that's already above the minimum price won't change. It will disproportionately affect the cheap stuff, which makes sense since the aim is to target binge drinkers, most of whom drink the cheap stuff.

Aye, so if your cheap piss is €18, and your brand name stuff is €18, don't you think Brand Name stuff will increase the price, to maintain the difference between them, and CheapO PlonkO?

MadYaker

Sofiztikated wrote: »

Aye, so if your cheap piss is €18, and your brand name stuff is €18, don't you think Brand Name stuff will increase the price, to maintain the difference between them, and CheapO PlonkO?

Why would they? Doesn't make any sense for the likes of Smirnoff to increase the price just because Tesco vodka is now a similar price. If anything the likes of Smirnoff should welcome this, it will make their products more competitive.

OldNotWIse

MadYaker wrote: »

I don't think so. I'm not arsed searching but I read, I think on the Irish Times website, that at the moment the minimum prices being proposed worked out at something like €18 for a bottle of spirits, €8 or €9 for a bottle of wine and I think around €1.80 or €1.90 for a can of beer? I could be a bit off the mark there.

They can't use it to increase the price of all drink since what they're doing is introducing a minimum price per gram of alcohol. So stuff that's already above the minimum price won't change. It will disproportionately affect the cheap stuff, which makes sense since the aim is to target binge drinkers, most of whom drink the cheap stuff.

Do you mean "shouldn't"?

Why don't we wait and see

syklops

MadYaker wrote: »

Why would they? Doesn't make any sense for the likes of Smirnoff to increase the price just because Tesco vodka is now a similar price. If anything the likes of Smirnoff should welcome this, it will make their products more competitive.

Smirnoff dont set the price though. Tesco does. Tesco own brand Vodka 18 euros, 6 euros profit. Smirnoff 18 euros, 2 euros profit. Smirnoffs new price will be 22 euros so that either way Tesco gets its 6 euros profit.

MadYaker

OldNotWIse wrote: »

Do you mean "shouldn't"?

Why don't we wait and see

Well they'd have completely change what they have proposed to something other than minimum pricing, which they haven't.

MadYaker

syklops wrote: »

Smirnoff dont set the price though. Tesco does. Tesco own brand Vodka 18 euros, 6 euros profit. Smirnoff 18 euros, 2 euros profit. Smirnoffs new price will be 22 euros so that either way Tesco gets its 6 euros profit.

You don't know the profit margins they are getting though. I worked in retail part time for a while and own brand products always have the lowest mark up, which means less money for the retailer per unit sold. On a per bottle basis the retailer makes more money from selling Smirnoff than they do from selling their own brand vodka. Minimum pricing won't change that, the money isn't going to the retailer it's going to the government.

Anyway Smirnoff is usually over €20 for a 700ml bottle unless its on offer. Tesco vodka is more like €13 for a 700ml bottle. So lets say minimum pricing comes in and the price of the tesco vodka jumps to €18. The profit margin on each bottle sold by the retailer is still the same because they are now buying it in at a higher price due to the tax increase. Smirnoff however hasn't been affected because it's price is too high to be affected by minimum pricing, and there is no reason for the retailer to increase the price of Smirnoff.

Just a little Samba

MadYaker wrote: »

Why would they?

For the same reason Heiniken are happy to sell Beamish for €3 a pint but insist that Murphy's isn't sold at the same price as it's their "premium" brand and selling it for "cheap" would be seen in their eyes as devaluing it.

Murphy's and Beamish have near identical ingredients, similar abv's and are make in the same plant for identical costs but one is sold for more than the other.

Why would they do that?

MadYaker

Just a little Samba wrote: »

For the same reason Heiniken are happy to sell Beamish for €3 a pint but insist that Murphy's isn't sold at the same price as it's their "premium" brand and selling it for "cheap" would be seen in their eyes as devaluing it.

Murphy's and Beamish have near identical ingredients, similar abv's and are make in the same plant for identical costs but one is sold for more than the other.

Why would they do that?

Heineken are entitled to sell their produce to pub owners at whatever price they choose, thereby dictating the price at the bar since the pub have to make a profit on each pint sold. They charge more for a keg of Murphys, so the pub are forced to charge more for a pint of Murphys.

But I really don't see how what you posted relates to the points I've been making in any way?

Flex

MadYaker wrote: »

You don't know the profit margins they are getting though. I worked in retail part time for a while and own brand products always have the lowest mark up, which means less money for the retailer per unit sold. On a per bottle basis the retailer makes more money from selling Smirnoff than they do from selling their own brand vodka. Minimum pricing won't change that, the money isn't going to the retailer it's going to the government.

Anyway Smirnoff is usually over €20 for a 700ml bottle unless its on offer. Tesco vodka is more like €13 for a 700ml bottle. So lets say minimum pricing comes in and the price of the tesco vodka jumps to €18. The profit margin on each bottle sold by the retailer is still the same because they are now buying it in at a higher price due to the tax increase. Smirnoff however hasn't been affected because it's price is too high to be affected by minimum pricing, and there is no reason for the retailer to increase the price of Smirnoff.

Ive read that they intend to use different measures for beer, wine and spirits because they want to achieve certain price points.

• Beer €2.20 for a can (about €50 for a tray of cans)
• Wine €10 for a 12.5% abv bottle, roughly €11 for a 13.5%
• Spirits €30 for a bottle of 37.5% vodka (meaning whiskey and other 40% spirits would be about €32 for a 700ml bottle)

I definitely read it elsewhere but just at the moment this is the only link I can find as Im in a hurry

http://www.thejournal.ie/minimum-alcohol-pricing-ireland-1919202-Feb2015/

the change could push the minimum cost of a bottle of wine above €10 and a bottle of spirits over €30.
.
.
.
Drinks like spirits, which are cheap when measured against their strength, will have a higher minimum sale price than low-alcohol beer, for example.

The government says this will work because heavy drinkers and young people with little disposable income tended to favour alcohol products which were “strong and cheap”.

Boskowski

This is so funny. They're all about free market principles this and small government that. Until some powerful business association sees their profits dwindling that is. Then its all screams for intervention and regulation.

TireeTerror

Is this minimum pricing going to done in the North as well? I live right near the border and I buy nearly all of my drink in the North as its way cheaper. I would just get a van load form the mainland UK if they did this and stock right up.

Capt'n Midnight

senordingdong wrote: »

Indeed, much the same for alot of is. So the only real benefactor is the exchequer.

Since there is no increase in excise duty and since the intended aim is to reduce alcohol sales the tax take will be reduced.

The exchequer may even have to raise taxes elsewhere to compensate for the shortfall.

The extra cost doesn't go to revenue it just gets pocketed by the retailers less whatever the distributors can gauge out of the retailers

Mr. teddywinkles

Henlars67 wrote: »

I'm on a low income, and I like a drink, but I'm delighted with the minimum price being introduced.

I only drink in a pub, not at home like a weirdo.

wont be saying that when you have kids

dr.fuzzenstein

OldNotWIse wrote: »

In anticipation of being f.ucked over by the Irish government again, anybody know anything about stocking up on wine in France? Restrictions, limits etc.

You can bring a good bit:
http://www.revenue.ie/en/customs/leaflets/pn1878.html

Booze cruises will be the way to go.

TireeTerror

Mr. teddywinkles wrote: »

wont be saying that when you have kids

After living in Tenerife for 4 years before moving to live in Ireland,, I was disgusted at the price of drinks. So to combat it and to take advantage of the great prices just over the border in the shops etc, I built my own gaming room which kind of turned a bit more like a bar with each addition!

https://www.youtube.com/watch?v=gk_UsE_be7s&edit=vd

MadYaker

MadYaker wrote: »

I think this will only affect the really cheap stuff. Like if your someone who drinks a lot of cheap strong beer/cider or Aldi and Tesco own brand spirits. You can get 4 cans of druids cider for €5 and its 6%, stuff like that will nearly double in price. I don't drink it but a lot of my friends do. It'll mostly affect student drinkers like me, and homeless alcoholics. These aren't people who are going to turn to the pubs just because their drinks of choice get more expensive, off licenses will still be cheaper.

To be honest I'm hoping the EU competition authorities will strike this down, and if they don't who knows, maybe a black market for cheap booze imported illegally from eastern europe will start up. Id buy it.

The price of the cheap stuff will go up and be priced similarly to bud/Heineken etc who view themselves as premium brands. They will not be happy to sell at the same price as Dutch gold etc. Prices will go up across the board to preserve the brand image.

MadYaker

Deleted User wrote: »

The price of the cheap stuff will go up and be priced similarly to bud/Heineken etc who view themselves as premium brands. They will not be happy to sell at the same price as Dutch gold etc. Prices will go up across the board to preserve the brand image.

That literally makes no sense from Heineken's POV. If the cheap stuff gets more expensive then Heineken etc become more price competitive and more people will buy their product because now everything is pretty much the same price, so the average drinker will go for the better stuff.

If Heineken is €2 a can and some sh!t beer that was 90c a can is now €1.90 a can, 9/10 people who used to buy the sh!t stuff will now buy Heineken. So why on earth would Heineken increase the price and make their product less attractive??? Their brand image isn't being tarnished here, Heineken isn't getting any cheaper, the crap stuff is getting more expensive therefore making Heineken a more tempting purchase.

Custardpi

Unfortunately what doesn't seem to get mentioned is that there are actually quite a few great beers that will almost certainly disappear when these laws come in. Dunnes have an own brand "Germania" lager that is really tasty & brewed for them in Germany on Reinheitsgebot rules. Spar have a similar lager that isn't quite as good but decent enough nonetheless. Lidl's Perlenbacher is also lovely.There's a few others that I'm sure fellow beer drinkers can think of.

These are beers that are reasonably priced & would compete very favourably with the likes of Carlsberg & Heineken in terms of taste. The idea that the latter are "premium" beers in any other area but price could only be sustained by someone who has had their taste buds removed at birth.
All of the aforementioned beers would fall well below what the minimum price for a beercan is likely to be pegged at. The intention is very much to drive them out of the market so that the choice for beer drinkers will be overpriced "premium" pish or even more overpriced though at least decent craft beer.
Having a few cans of lager doesn't make one a problem drinker & it shouldn't have to cost an arm and a leg.

FalconGirl

TireeTerror wrote: »

After living in Tenerife for 4 years before moving to live in Ireland,, I was disgusted at the price of drinks. So to combat it and to take advantage of the great prices just over the border in the shops etc, I built my own gaming room which kind of turned a bit more like a bar with each addition!

https://www.youtube.com/watch?v=gk_UsE_be7s&edit=vd

Someone is gonna die coming down them stairs pished!! Might be an idea to put some bannisters there. Pretty cool though.

qt3.14

MadYaker wrote: »

That literally makes no sense from Heineken's POV. If the cheap stuff gets more expensive then Heineken etc become more price competitive and more people will buy their product because now everything is pretty much the same price, so the average drinker will go for the better stuff.

If Heineken is €2 a can and some sh!t beer that was 90c a can is now €1.90 a can, 9/10 people who used to buy the sh!t stuff will now buy Heineken. So why on earth would Heineken increase the price and make their product less attractive??? Their brand image isn't being tarnished here, Heineken isn't getting any cheaper, the crap stuff is getting more expensive therefore making Heineken a more tempting purchase.

Have a read of Veblen goods and positional goods on Wikipedia. It's counter intuitive but reducing price or an inferior products price increase can actually lower a premium products sales. Especially, when secretly the premium brand is crap anyway.

Custardpi

Yeah, that's a fascinating area of economics. I remember reading a case study about Armani introducing a line of jeans that were not cheap exactly but much more affordable than Armani stuff was at the time. It ended up damaging the entire reputation of Armani as a "premium" brand, just because that one line wasn't seen as as "exclusive" as their usual output.

qt3.14

Custardpi wrote: »

Yeah, that's a fascinating area of economics. I remember reading a case study about Armani introducing a line of jeans that were not cheap exactly but much more affordable than Armani stuff was at the time. It ended up damaging the entire reputation of Armani as a "premium" brand, just because that one line wasn't seen as as "exclusive" as their usual output.

Yep. Another was Tiffany's. Tourists go there almost as a Mecca. So they tried to cash in by offering relatively cheep trinkets so everyone could walk around with a Tiffany's bag. Then sales of big ticket items crashed...

TireeTerror

FalconGirl wrote: »

Someone is gonna die coming down them stairs pished!! Might be an idea to put some bannisters there. Pretty cool though.

Form over function! My girlfriend fell down them the other day stone cold sober, luckily she fell down them rather than over the edge as that would've been really sore, potentially fatal!

SteelyDanJalapeno

TireeTerror wrote: »

After living in Tenerife for 4 years before moving to live in Ireland,, I was disgusted at the price of drinks. So to combat it and to take advantage of the great prices just over the border in the shops etc, I built my own gaming room which kind of turned a bit more like a bar with each addition!

https://www.youtube.com/watch?v=gk_UsE_be7s&edit=vd

Very nice, did you have build thread or document it online anywhere?

Capt'n Midnight

MadYaker wrote: »

The profit margin on each bottle sold by the retailer is still the same because they are now buying it in at a higher price due to the tax increase.

WHAT TAX INCREASE ?????

this is about minimum retail price , not wholesale price , there is NO tax increase

The gov't won't get a red cent extra

Today you can buy 3 cans for €2.40 , tomorrow you might only buy 2
Revenue still get the same VAT because that's based on the total price.
But excise is down by a third.

So apart from the VAT everything else you used to pay for in the third can , like excise , contents etc, would now all be pure profit to the retailer

Turpentine

Capt'n Midnight wrote: »

Since there is no increase in excise duty and since the intended aim is to reduce alcohol sales the tax take will be reduced.

The exchequer may even have to raise taxes elsewhere to compensate for the shortfall.

The extra cost doesn't go to revenue it just gets pocketed by the retailers less whatever the distributors can gauge out of the retailers

Capt'n Midnight wrote: »

WHAT TAX INCREASE ?????

this is about minimum retail price , not wholesale price , there is NO tax increase

The gov't won't get a red cent extra

Today you can buy 3 cans for €2.40 , tomorrow you might only buy 2
Revenue still get the same VAT because that's based on the total price.
But excise is down by a third.

So apart from the VAT everything else you used to pay for in the third can , like excise , contents etc, would now all be pure profit to the retailer

I sincerely doubt the retailer would get any more profit per Euro spent should such a pricing system see the light of day.

It's quite naive to assume that the brewers would continue to sell their wares at the same price and allow distributors or retailers to keep the difference.

TireeTerror

TiltedBrain wrote: »

Very nice, did you have build thread or document it online anywhere?

No, sorry. The only thing I have an online build of is the computer racing simulator rig you can see in the video. Its a bit dark in the video and I only had one of the monitors on and wasnt running a game, so it was a bit of a waste of opportunity. Anyway here is the build, although at this point I did not have the 3 U2711 monitors I have now.

http://www.gtplanet.net/forum/threads/my-first-build-ever-a-copy-of-waysides-design.260101/

hatrickpatrick

syklops wrote: »

Why is it irrelevant? If we dont discuss it here on boards and make people aware of it, it will silently get signed into law and it will be too late to protest, or write to TDs, it will be law.

Oh don't get me wrong, I agree we need to oppose this at home. I'm merely pointing out that until the ECJ delivers its ruling and unless that ruling is in favour of the legality of minimum alcohol pricing, no such law can be enacted.

This is of course presuming there's an Irish company with the balls to take a case, should the government proceed before such a ruling is delivered.

hatrickpatrick

Capt'n Midnight wrote: »

Today you can buy 3 cans for €2.40

Nice! Where?

Princess Consuela Bananahammock

hatrickpatrick wrote: »

Nice! Where?

Budapest.