Scotland Levies New Taxes on Working-Class Drinkers

In an old joke, a little boy climbs onto his father's knee.

"Daddy," he says, his wide eyes bright with optimism. "Now that alcohol is so expensive, does that mean you'll drink less?"

The father laughs.

"No, my son," he replies. "It means you'll eat less."

In May, Scotland decided to test this joke on a national scale when it became the first country in the world to implement "minimum-unit pricing." The policy sets a price floor for alcohol at 50 pence (approximately 68 U.S. cents) per unit—i.e., 10 milliliters of pure booze. (A standard 25-milliliter shot of 40 percent whiskey is one unit; a standard 175-milliliter glass of 14 percent wine is 2.4 units.) That threshold won't affect the price of premium products, such as Champagne, fine wine, and craft beer, which all cost more than the new minimum to begin with, but it will cause the price of a lot of other products to skyrocket. According to data from NHS Scotland, more than half of the alcohol sold in Scottish supermarkets in 2016 cost less than 50 pence per unit—with some as little as 18 pence per unit.

The policy has good intentions: Scotland has the highest rate of alcohol-related deaths in the United Kingdom, and advocates hope this policy will change that. A study using the Sheffield Alcohol Policy Model suggests that the new price floor could save 392 lives within five years and lead to 8,000 fewer hospital admissions. There are also potential financial benefits: Scottish Health Secretary Shona Robison claims that alcohol misuse costs the country 3.6 billion pounds ($4.9 billion) each year.

But critics argue that this policy unfairly targets the poor.

"It's not just a regressive policy," said Chris Snowdon of the Institute of Economic Affairs. "It's a policy that actively exempts the rich. Nothing will change for people who buy fine wine. It's the people who buy boxes of wine who will be hit."

The price differences are likely to be most striking at the border, where Scottish customers have the option to drive to English stores. When The Scottish Sun compared the price of a loaded shopping cart in southern Scotland with an identical cart 30 miles south in England, it found that the Scottish cart cost 30 pounds (about $40) more—a 40 percent markup. According to critics of the policy, that kind of price increase makes it harder for low-income Scots to stock up on bargain-basement liquor for holiday gatherings, summer barbecues, or game days.

"I think there will be a bit of cross-border trade in the short term—a relatively small number of people who are trying to game the system—but it's important to split that individual behavior from what's likely to happen in the vast majority of cases," said Ewan MacDonald-Russell, the head of policy and external affairs for the Scottish Retail Consortium. "We don't know what's going to happen now. It might have all kinds of effects we haven't predicted."

Policies meant to address alcohol misuse are trendy throughout the region. Wales is expected to adopt minimum-unit pricing in the summer of 2019, and there are campaigns to extend the policy to England as well. In the Republic of Ireland, the parliament has considered implementing an even higher price floor for alcohol, but concerns about cost imbalance across the border have stalled the policy until Northern Ireland adopts a similar rule.

And yet minimum-unit pricing may not be enough for anti-alcohol activists: An advocacy alliance is now calling for a ban on selling booze after 8 p.m. And if the attack on libations isn't enough, First Minister Nicola Sturgeon recently vowed to go after two-for-one pizza deals in an effort to stymie the child obesity epidemic. (First they came for the boxed wine…)

If nothing else, this neo-prohibition creates opportunities for Scots to play hopscotch with the law. Home brewing is always an option, and online sales remain a significant loophole: When the Scottish Sunday Express ordered a large cart of alcohol on Amazon, it cost less than the same items would have at a local store, even including the 5 pound shipping fee, since the box was dispatched from England.

And if the Amazon fee is too steep for your liking? No problem. Scottish social media users who work across the border are offering to bring booze back home with them—for a price, of course.

For now, delivery starts at just 1 pound.