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Minimum Pricing Damaging to Hospitality Industry The Australian Hotels Association have joined alcohol retailers and others in the alcohol industry in condemning the proposed minimum pricing plan claiming that it would have a negative effect on the hospitality industry. According to the Australian National Preventative Health Agency imposing a minimum pricing on the alcohol industry would help to alleviate many of the alcohol fuelled problems experienced recently. This post highlights the issue on Hospitalitymagazine.com:

AHA’s position is in response to an Issue Paper released by the Australian National Preventive Health Agency (ANPHA), which provides an overview of alcohol consumption in Australia and promotes discussion on the issue of minimum pricing. Already seen in countries including Russia, Scotland and Ukraine, minimum pricing would introduce a minimum price per standard drink (or unit of alcohol) that alcoholic beverages must be sold for. The paper released by ANPHA, a government agency aimed at strengthening Australia’s investment and infrastructure in preventive health, states “…evidence consistently suggests that the price of alcohol influences alcohol consumption and harms. Whilst the relationship between alcohol price and consumption of specific beverages can vary significantly, in general, an increase in the price of alcohol leads to a decrease in alcohol consumption and alcohol related harm. “The Preventative Health Taskforce’s technical report on alcohol reviewed more than 50 studies from around the world indicating that when alcohol increases in price, consumption is reduced. The World Health Organisation states that increasing alcohol price is one of the most effective strategies for reducing alcohol consumption at the population level.” However the AHA argues that there is insufficient evidence that such a policy would

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actually result in a reduction in excessive and harmful drinking. In fact a statement issued by AHA argues that minimum pricing could actually hurt responsible, moderate drinkers more than problem drinkers. Source: http://www.hospitalitymagazine.com.au/beverage/minimum-alcohol-price-would-hurt-hos pitality-aha

The Preventative Health Taskforce believes that a minimum pricing strategy is best to curb the problem of binge drinking because most of these drinkers prefer cheaper alcohols as compared to those who consume alcohol moderately who tend to opt for the more expensive, higher quality brands. Problem drinkers, it is argued are more likely to consume cheap alcoholic beverages and so a minimum pricing policy would be able to at least minimise the amount of alcohol they can afford to consume and in so doing perhaps reduce the high alcohol fuelled crime statistics. However the hospitality industry believes that if the government go ahead with this strategy it would result in a loss of customers and the country’s wine industry would also suffer. According to the hospitality industry they estimate a loss of business even though they sell alcohol for much more than the suggested minimum prices. Another possible repercussion is that as the cheaper alcohol products prices are raised other drinks brands will raise their prices too in an effort to remain “exclusive� and differentiate themselves from these cheaper and lower quality brands, because after all how can a luxury brand cost the same as a low-cost one? Therefore higher quality products will be forced to raise their prices as well, so ultimately all alcohol consumers will be affected.

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Minimum Pricing Damaging to Hospitality Industry