Oireachtas Joint and Select Committees

Tuesday, 25 September 2012

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Beverage Exports: Discussion with Drinks Industry Group of Ireland

2:15 pm

Mr. Anthony Foley:

A number of points can be made on the issue. Scotland has introduced a limit but virtually no alcohol is sold in Ireland at that price. In Britain there is a wide variety of cheap spirits but that is not so much the case in Ireland. If we were going to introduce a minimum price it would have to be much higher than the Scottish one to have any effect. I am not sure that a minimum price would make a huge difference. Suppose we state that a bottle of whiskey or vodka must be sold for €15. What is to stop the supermarket from then selling crisps at 1 cent per packet? They can introduce all sorts of complementary products to get over the price. As an economist, I would have to argue that the higher the price, the smaller the consumption, but the relationship is such that enormous price increases would be required to achieve a significant reduction in consumption and a significant effect on health. An increase of 2% or 5% is not going to make much of a difference. I would bet any money that if one polled a group of young teenagers who should not be drinking in the first place, they would not even know the price of the products they purchased. They would estimate the price at €4.50 or €5 but they would not be able to accurately estimate a price of, for example, €4.67. An issue certainly arises in respect of the off-licence price of alcohol.

There are growing concerns throughout Europe about youth drinking not following the patterns of parents' consumption. For example, police in Rome are worried about drinkers congregating at fountains and squares, which was unheard of five years ago. The drinking problem among Irish youth is also a wider international problem. Price matters but one would need to create substantial price differentials to induce substantial reductions in consumption.