Roughan on alcohol and competition

John Roughan on Saturday had an excellent post on the benefits of competition:

Twenty years ago a visit to a wine shop was not much better than a prowl around supermarket shelves today. There was a limited range of popular varieties, some priced to clear.

You made a selection with minimal assistance and knew from bitter experience not to try anything unfamiliar, particularly if it was red.

Twenty years ago, when Parliament passed a law allowing wine to be sold in supermarkets, everybody supposed it would spell the death of the wine shop. So much for supposition.

I have a nearby supplier these days who has noted what I like, knows my modest price preference and, more often than not, has a new vintage to recommend. Invariably, it is superb.

This is key – not all competition is price based. It is service based also.

Here’s to him, here’s to all the customers that keep him solvent, here’s to supermarkets that force him to compete on service, here’s to the Sale of Liquor Act, 1989.

Bravo.

I mention this because the liberal liquor laws of the late 20th Century are in imminent danger of reversal. The sale of alcohol from supermarkets, the proliferation of suburban liquor stores and the lowering of the minimum purchasing age to 18 are blamed for under-age and binge drinking, domestic violence, even armed robberies.

And much more no doubt.

I don’t know if higher prices will deter binge drinking and other sins. The researchers assure us it will. Nor do I know whether wine shops will continue to offer an assiduous service if supermarkets can no longer advertise today’s price differentials.

What I do know is that the benefit competition has brought for consumers like me is unlikely to figure in the decision. The benefits of competition seldom attract social research.

Eric Crampton has already analysed some of this research and found that it only looks at costs, not benefits. Any decisions on alcohol should be made on a rational basis.