Effects Of Alcohol On The Uk Economy

1912 Words Mar 2nd, 2016 8 Pages
“Discuss the likely economic impacts of a policy to impose a minimum price on a unit of alcohol. To what extent is it likely to achieve its aims?”

Alcohol as a good, is very difficult to place in to the category’s assigned to many of the goods which we purchase. It is most likely that alcohol is a normal good, meaning that as incomes rise the demand for alcohol will follow suit and rise along side. Alcohol has both economic and socio-cultural elements to play in the UK’s economy. It does however, cause many problems in society. It has been estimated that alcohol misuse has cost the UK around £21 billion per year (Gov, 2012). Alcohol also provides the UK economy with large amounts of tax revenues, in the tax year of 2009-2010 alcohol provided £9billion in tax revenues (Gov, 2010), alongside the tax revenues that alcohol creates; there are the jobs in and surrounding the industry which also add to any of the benefits that the sale and consumption of alcohol create in the economy. There is however a large gap between the amount of revenue gained from the taxation of alcohol and the costs inflicted. The imposition of a minimum price on a unit of alcohol would increase tax revenues if the demand for alcohol stays the same allowing for some of the revenues to then be spent on correcting any problems surrounding alcohol misuse.

The imposition of a minimum price on a unit of alcohol will have a number of economic impacts; the extent to which these changes will affect the…

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