Minimum price not good for retailers: PCCI calls for other options to tackle alcohol abuse

Peel Chamber of Commerce and Industry general manager Andrew McKerrell said he "doesn't agree" with the concept of a minimum floor price for alcohol. Photo: Nathan Hondros.
Peel Chamber of Commerce and Industry general manager Andrew McKerrell said he "doesn't agree" with the concept of a minimum floor price for alcohol. Photo: Nathan Hondros.

The Peel Chamber of Commerce and Industry (PCCI) are calling for the state government to consider alternative solutions to the minimum floor price to tackle alcohol-related harm across Western Australia.

The Mandurah Mail has recently reported a renewed push from the WA Alcohol and Youth Action Coalition to implement the “important public health initiative” to reduce heavy drinking across the state.

A floor price would set a minimum dollar amount per standard drink below which alcohol cannot be sold and would prevent alcohol retailers from selling bargain-basement booze.

PCCI general manager Andrew McKerrell said forcing retailers throughout the state to implement the initiative could have a damaging effect on the local economy.

” I don’t agree in removing a business’ ability to operate independently in a competitive market and specifically regulate against their ability to price accordingly to move unwanted stock,” he said.

I don't agree in removing a business' ability to operate independently in a competitive market.

Andrew McKerrell

And the business leader said on-premise venues would be hit even harder by the consequences of such a measure.

“This can also be applied to on-premise venues like clubs, bars and restaurants,” Mr McKerrell said.

“However the effect would be compounded and have a much greater impact where very little margin is made on beverages already once exorbitant operating costs are taken into account.”

On top of the economic impact, Mr McKerrell had further concerns about implementing a minimum floor price for alcohol across the state.

“Implementing a minimum price floor would further encourage those in our society who use alcohol as a drug, to consume liquor at home and ‘load up’ before venturing out into the community,” he said.

“This would drastically raise the chances of anti-social behaviour due to increased consumption or worse, turning to alternate illicit substances.”

This would result in huge negative impacts on a business’ turn-over, profitability and ultimately, financial viability.

Andrew McKerrell

He also doesn’t think the initiative will address “the core issue our community is facing”. 

“A firm holistic approach in addressing our society’s culture and taboos centred around alcohol consumption is desperately needed, founded by scientific and global social research, and backed by a strong, persistent inter-generational educational program,” he said.

“Due to lessons learned from the prohibition period of the 1920s and 30s, I unfortunately cannot see the implementation of a minimum price policy as an effective means of addressing what appears by all accounts to be a social and health issue, and not one of economics.

“I see a policy such as this as anti-competitive and effectively removing business’ ability to operate in a highly competitive market.

“This would result in huge negative impacts on a business’ turn-over, profitability and ultimately, financial viability.”

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Australian Hotels Association (AHA) WA chief executive officer Bradley Woods did not echo the opinion of the PCCI and instead said they would be willing to implement the measure.

“The AHA is open to considering a minimum price on alcohol because we recognise that there are complex social issues underlying alcohol abuse,” Mr Woods said.

“But there is no single solution.”

Mr Woods did acknowledge however that it might just act as a Band-Aid in fixing the alcohol abuse problem.

“Broad-based consumption measures like a minimum price will make cheap wines and beer less accessible however it is important to note it will not target all harmful drinkers as they are not all responsive to price rises.”

There is no single solution.

Bradley Woods

“Our members will continue to work with the government on targeted solutions to address alcohol abuse.

“This includes adhering to government bans, self-imposed alcohol restrictions, utilising powers that allow police and licensees to penalise and prohibit anti-social drinkers and the development of a Banned Drinkers Register.”

A visiting UK professor, and expert in the field of minimum floor price policy, has suggested on-premise liquor stores would in fact benefit from the measure.

Speaking at a public seminar in Bentley on November 15, University of Sheffield’s Dr John Holmes explained how he believed retailers could make money from the initiative.

Dr John Holmes from the University of Sheffield in the UK spoke at a public seminar in Perth last week about implementing a minimum floor price for alcohol. Photo: Kaylee Meerton.

Dr John Holmes from the University of Sheffield in the UK spoke at a public seminar in Perth last week about implementing a minimum floor price for alcohol. Photo: Kaylee Meerton.

“Because minimum pricing is not a tax, off-trade retailers – those who actually sell alcohol at low prices, actually retain the extra money from the alcohol sold at higher prices,” he said.

“So we will see quite a big windfall for off-trade retailers.”

Dr Holmes explained that during a survey in the UK, it was revealed many sectors of the industry in fact supported the initiative for a range of different reasons.

“The pub sector supported it because it was struggling and hoped it would stop people drinking at home and bring people back to the pubs,” he said.

“Some independent stores supported it because they were concerned the supermarkets were able to sell at such a low price already.”

The Mandurah Mail team will continue to develop this controversial issue with further investigation in the upcoming weeks.

What are your thoughts on implementing a minimum floor price for alcohol in WA? To share your opinion get in touch with the Mandurah Mail team via editor.mandurahmail@fairfaxmedia.com.