The Alcohol Price War – Good for the Pocket, Bad for Our Health
One somewhat positive result of the recession we find ourselves in is that businesses must lower their prices in order to attract customers. And while this may be desirable for consumers looking for the best deals on groceries, clothing and so on, when we reach alcohol, the situation becomes a little different.
In the current climate, bars and clubs are struggling as students have less and less disposable income, and often choose to drink at home, rather than spend a night out on the town. As a result, they are turning to more desperate measures. A price war is erupting as clubs try to outdo each other in their bid to attract customers. One club in Dublin gave away around two hundred naggins of liquor and 200 bottles of beer in one night recently. Other clubs around the capital are running various promotions, half hour vodka bars, 99c shot nights, or simply free alcohol promotions. Clubs are often forced to these measures by the actions of others. If one establishment lowers its prices or offers free drinks, they draw in the crowd. The knock-on effect is simple, competing businesses try to further outdo their rivals and it spirals from there.
James Morrissey of the Signature Group has been highly critical of the price war and its effect on the industry. “It’s been damaging for the industry as a whole. The owner of a nightclub might want to put on drinks deals because his venue is about to go bust, but it brings down the price of everyone else’s as well.”
Even more concerning is its effect on a generation already cavalier in their use of alcohol. Ireland has always been associated with alcohol consumption, particularly copious amounts, especially among the younger generation. Ireland still ranks amongst the highest alcohol consumption in the EU, 20% above the continent’s average. Alcohol Action Ireland have said that alcohol is twice as cheap now as it was fifteen years ago while people are drinking twice as much as they did fifty years ago. Half of all drinkers in the country have a ‘harmful pattern of drinking’. Recently, a report by the Health Research Board has highlighted just how negative the situation really is. In five years, the number seeking help for alcohol related problems has doubled. More troubling is the news of an increase of 145% of those seeking help under the age of eighteen. The bill for all of this comes to a staggering €3.7 billion each year.
No laws exist to prohibit clubs and pubs from undertaking such dangerous promotions. Section 20 of the Intoxicating Liquor Act (2003) prevents businesses from selling alcohol at a reduced price for a period during the day, like the American ‘Happy Hour’. This is easily enough circumvented, pubs and clubs simply run their promotions all night instead of the limited period as defined in the law. And, as the law is limited to alcohol being sold, there are no problems if it is simply given away.
So the alcohol price war may be good for our lighter pockets post Budget 2012. However, the long term effects vastly outweigh the short term. Irish attitudes towards alcohol have always been rather lax and a change would do us the world of good. Better still, the government could plug the holes in the legislation, and do something worthwhile for a change.