Tuesday, August 7, 2018

Buck-a-Beer is Terrible Policy, Great Politics

I'll be honest. It's late on Tuesday and because of the holiday Monday I forgot what day of the week it is, so this has to be written and delivered quickly.

When Doug Ford announced his 'policy' to bring cheaper beer to Ontario I don't know if I could have rolled by eyes harder. It was the exact sort of cheap pandering I had come to expect from the Progressive Conservative leader, but even still, when I first saw the message I thought it was a parody. What could be greater satire than Doug Ford promising cheap beer to win over voters?

To the shame of us all that was an actual commitment and one the government of Ontario has started to move towards making it a reality. The government will lower the minimum cost of a bottle or can of beer from $1.25 to $1. The price was raised ten years ago under Premier Dalton McGuinty. However, anyone capable of basic economics will probably point to the fact that this may not be as simple a fix as that. Prices have only gone up over the last ten years. Inflation and price structuring alone would mean that companies would be hesitant to lower their prices.

The government, ridiculously, is encouraging brewers to lower prices in order to win promotional opportunities at the government-owned LCBO.

Unsurprisingly, there has been significant outcry from brewers about this. Over recent decades small-scale and craft breweries have developed products to cater to a more diverse market. Quality costs money, and some brewers have clearly made the point that in order to meet the prices the Ford government wants, quality or quantity would have to be slashed

The truth is that the government of Ontario cannot really control the price of beer. Setting a new minimum will not necessarily encourage anyone to take advantage of it. I remember being a university student and drinking the buck-a-beers. They were awful, almost every one of them. The idea of general affordability is quite popular, no doubt, but whether or not that should be applied to alcohol. I would much prefer people to have cheaper transit or cheaper housing or cheaper food. The public good is much clearer there.

It's ridiculous policy, but it will no doubt be good politics.

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