Booze price hike meets retailers' resistance

A stand-off has developed between supermarkets and the Law Commission over a proposed scheme to raise the prices of cheap beer and wine.

The commission is considering a minimum price scheme, aimed at raising liquor prices at the lower end of the scale to choke back demand from young and problem drinkers, as part of its review of the liquor laws.

The scheme is just one of a raft of changes being investigated by the Law Commission as concern grows about the dark side of New Zealand's drinking culture, including binge drinking and alcoholism, alcohol-related crime and injury, and the carnage caused by drunk drivers. Proposals mooted in a commission report in August included shorter drinking hours, higher taxes and new laws against public drunkenness.

But the supermarkets have so far declined to give the commission detailed information on prices and volumes of beer and wine sales, apparently fearing a minimum price scheme could hit their profits.

One liquor industry analyst said: "The supermarkets are in a dilemma. The commission wants them to provide information which could then be used to deal to them."

The stand-off is revealed in emails issued last week by the commission following a request under the Official Information Act for copies of all submissions to it by the liquor industry.

The Retailers Association, acting on behalf of the supermarkets, has declined the commission's information request, first made on September 1, until it receives "assurances" about what the commission is doing.

Cut-price liquor sales by supermarkets have sparked fears that they encourage harmful consumption by young and heavy drinkers. The commission, in an issues report in July, said minimum price schemes were not common, although several Canadian provinces had them and the Scottish government had said it was going to introduce one. And minimum price schemes were "gaining increased support, led mainly by the medical fraternity".

An exchange of emails between the Law Commission and the Retailers' Association reveal the commission's thwarted attempts to extract the information on liquor sales. On September 1 commission staffer Fiona Stirling asked for a breakdown of sales volumes in different price bands to determine how large a proportion of sales would be affected by a minimum price scheme.

In an email to Foodstuffs, which controls Pak'n'Save, New World and Four Square supermarkets, she discussed finding the right minimum price that would capture a large enough proportion of sales to tackle heavy drinking, while not heavily disadvantaging the industry and ordinary customers.

She said she would "greatly appreciate" the information so she could inform Justice Minister Simon Powell, who is in charge of the liquor law reform, of the pros and cons of a scheme.

Barry Hellberg from the Retailers' Association, replied on September 14 with a range of concerns, and proposed the commission provide details of what it would do with the data, and supply a detailed brief for industry on how a minimum-price scheme would be implemented, its likely costs and the probable effects on liquor consumption.

On September 15 Stirling sent Hellberg an email declining his proposal – the proposed brief would take a lot of work and the commission was working to tight deadlines. Stirling was disappointed the commission could not make use of the "rich" data held by the supermarkets.

Six days later Hellberg wrote to "reaffirm our willingness to work with the commission" but repeating concerns that wrong conclusions could be reached.

Since then the stand-off seems to have remained. Commission president Sir Geoffrey Palmer told the Sunday Star-Times he had repeated his request during a meeting with the association, but so far it had not provided the information.

He had told them he was "not much impressed" by the list of assurances it had sought on the issue.

However, he said he did not think the association was being unco-operative, and remained hopeful it would provide the information. In the long run, it might not make much difference whether it refused, because the government could force the supermarkets to provide the data.

The commission believed a minimum price scheme had "considerable merit", but it would not necessarily recommend it to the government.

Hellberg told the Star-Times that he could add little to the information in the emails. "At the moment we have agreed to disagree on the appropriate approach to minimum pricing," he said.

The association hoped to have a further meeting with the commission this month.

anthony.hubbard@star-times.co.nz