Cheshire police call for a rise in the price of alcohol
Young people may be put off alcohol if there are price rises
Cheshire’s leading police officer has called for a minimum price for alcohol double that under government proposals.
The county’s Chief Constable David Whatton has said beer should cost no less than 50p per unit of alcohol; the government is proposing 21p.
His report, which is coming before the Cheshire Police Authority, wants all councils in Cheshire to make use of local bylaws to force the issue.
The report says evidence shows that vulnerable drinkers do react to price.
The Home Office proposal works out at about a minimum 21p per unit of beer and 28p per unit of spirits.
Though it is thought the effects in pubs would be small, it would reduce the current availability of drinks in supermarkets, where a two litre bottle of cider can currently be bought for £1.21 and 15-can packs of lager for £5.
Well-being
No council in Cheshire has yet agreed to enforce the 50p idea with a bylaw.
The Cheshire East councillor Andrew Knowles, who is the council’s cabinet member with responsibility for health & wellbeing, told BBC Radio Stoke he was considering the suggestion: “Cheshire East Council is already committed to reducing alcohol harm; and is working collaboratively with key partners across the county on the issue of a minimum price.”
Keith Bott, a director of Titanic Brewery in Stoke-on-Trent, said he was cautious about the idea: “I welcome anything that pushes people into pubs into supervised surroundings, but I wouldn’t want the minimum price to go up even more beyond 50p.”
The Cheshire Police Authority, a body composed of councillors and lay-people, which monitors the police service, considers the report at its meeting on 22 February.
In 2008, the former Chief Constable of Cheshire Peter Fahy also campaigned for an increase in the legal age of buying alcohol to 21, following the murder of Garry Newlove in Warrington, north Cheshire.
http://news.bbc.co.uk/local/stoke/hi/people_and_places/newsid_9399000/9399564.stm
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Extract; “Cheshire Police call for a rise in Alcohol”
Source; BBC news
Extract date; February 16th 2011
Commentary Date; February 29th 2011
Word Count; 662
Relevant Syllabus section; Section 2
A debate was sparked in England between the Police and Government on the raise of the price of Alcohol. While the government proposes a minimal price of 21p per unit of alcohol police departments call for a minimum price of 45p. The rise in minimal price of alcohol will surely cause the demand for these beverages to drop. Demand is the quantity of a good or service in this case a good that consumers are willing and able to purchase at a given price. If the price of 21 pents per unit of alcohol is above the equilibrium price, this will create hesitation in the consumer as one must pay more, as the government hopes will cause an overall drop in consumption. However the rise in price of these products has little potential of causing a major decrease in consumption. This has to do with the inelastic demand of alcohol. Elasticity of demand is a measure of how much the demand for a product changes when there is a change in one of the determinates of demand, in this case the determent is price. Inelastic demand is when the value of Price elasticity of demand is less than one and greater than zero. The inelastic demand of Alcohol will a change in price of the product to lead to a proportionally smaller change in the quantity demanded of it. Therefore the raise of 21p purposed by the government will most likely lead to a minimal if at all decrease in demand, especially if 21p is near the equilibrium price of Alcohol. The police departments wanting to increase the price to 45p per unit would clearly have a greater impact on the consumption, as the price is much higher that the governments purposed 21p.
Graph to the left displays the Equilibrium Price of Alcohol,- (E1) as well as the minimal prices purposed by the government (E G2) and Police department (E PD 3)
The difference between Equilibriums=difference in price, the higher the price the higher are the chances of decreasing demand of the product.
Interestingly the police departments want a much higher minimal price; this is a consequence of the negative externalities that Alcohol has on society and which the police are especially aware of. A negative externality. A negative externality occurs when the production or consumption of a good or service has a negative effect upon a third party. Alcohol provides a benefit to society as people enjoy drinking it, however alcohol also has a social cost has it is often evolved in crime and violence. Because the costs alcohol has on society have a greater effect then the benefits of alcohol, a negative externality is created. To remove this negative externality the police department has purposed to raise the minimum price of Alcohol to 45p, even with the inelastic nature of demand of alcohol the consumption would decrease due the large raise in price. With consumption decreasing the problems associated with Alcohol would also deteriorate, eliminating large portions of the negative externality.
Graph to the left displays the negative externality Alcohol has on society (blue triangle)
MPC=marginal Production Cost
MSB=marginal Social Benefit
MSC=Marginal social Cost
The imposed Minimum Price on Alcohol would eliminate a large portion of the negative externality (difference between blue and light blue triangle) by simply increasing the price of per unit of alcohol.
In conclusion the Police department should raise the price of alcohol to a minimum price of 45p, alcohol is a major part of crime and despair, and however it cannot be combated successfully if the economy encourages the consumption. Therefore the Police should be able to raise the price to 45p instead of the 21p suggested by the government due to the inelasticity of demand of alcoholic beverages in order to successfully reduce the consumption.
Miles's Blog 
Extract; “Cheshire Police call for a rise in Alcohol”
Source; BBC news
Extract date; February 16th 2011
Commentary Date; February 29th 2011
Word Count; 662
Relevant Syllabus section; Section 2
A debate was sparked in England between the Police and Government on the raise of the price of Alcohol. While the government proposes a minimal price of 21p per unit of alcohol police departments call for a minimum price of 45p. The rise in minimal price of alcohol will surely cause the demand for these beverages to drop. Demand is the quantity of a good or service in this case a good that consumers are willing and able to purchase at a given price. If the price of 21 pents per unit of alcohol is above the equilibrium price, this will create hesitation in the consumer as one must pay more, as the government hopes will cause an overall drop in consumption. However the rise in price of these products has little potential of causing a major decrease in consumption. This has to do with the inelastic demand of alcohol. Elasticity of demand is a measure of how much the demand for a product changes when there is a change in one of the determinates of demand, in this case the determent is price. Inelastic demand is when the value of Price elasticity of demand is less than one and greater than zero. The inelastic demand of Alcohol will a change in price of the product to lead to a proportionally smaller change in the quantity demanded of it. Therefore the raise of 21p purposed by the government will most likely lead to a minimal if at all decrease in demand, especially if 21p is near the equilibrium price of Alcohol. The police departments wanting to increase the price to 45p per unit would clearly have a greater impact on the consumption, as the price is much higher that the governments purposed 21p.
Graph to the left displays the Equilibrium Price of Alcohol,- (E1) as well as the minimal prices purposed by the government (E G2) and Police department (E PD 3)
The difference between Equilibriums=difference in price, the higher the price the higher are the chances of decreasing demand of the product.
Interestingly the police departments want a much higher minimal price; this is a consequence of the negative externalities that Alcohol has on society and which the police are especially aware of. A negative externality. A negative externality occurs when the production or consumption of a good or service has a negative effect upon a third party. Alcohol provides a benefit to society as people enjoy drinking it, however alcohol also has a social cost has it is often evolved in crime and violence. Because the costs alcohol has on society have a greater effect then the benefits of alcohol, a negative externality is created. To remove this negative externality the police department has purposed to raise the minimum price of Alcohol to 45p, even with the inelastic nature of demand of alcohol the consumption would decrease due the large raise in price. With consumption decreasing the problems associated with Alcohol would also deteriorate, eliminating large portions of the negative externality.
Graph to the left displays the negative externality Alcohol has on society (blue triangle)
MPC=marginal Production Cost
MSB=marginal Social Benefit
MSC=Marginal social Cost
The imposed Minimum Price on Alcohol would eliminate a large portion of the negative externality (difference between blue and light blue triangle) by simply increasing the price of per unit of alcohol.
In conclusion the Police department should raise the price of alcohol to a minimum price of 45p, alcohol is a major part of crime and despair, and however it cannot be combated successfully if the economy encourages the consumption. Therefore the Police should be able to raise the price to 45p instead of the 21p suggested by the government due to the inelasticity of demand of alcoholic beverages in order to successfully reduce the consumption.