Along with tobacco and narcotic drugs such as heroin, alcoholic drink is classified by many economists as a demerit good. The British Medical Association (BMA), which is the main professional group representing doctors, recently said that more than a June 2009 26 (C) quarter of all drink-related deaths could be prevented by a 10 per cent rise in taxes on beer, wine and spirits. The BMA suggests tax increases should be linked to the 5 alcoholic strength of drinks. The BMA backed calls from Tesco for the Government to ban cut-price alcohol, including two-for-one offers and so-called "loss-leaders', in which drinks are sold at prices below cost to attract people into bars and shops that sell alcohol. The BMA Ethics Committee stated: "We have a public health emergency and people need to 10 be prepared to look at an increase in price. They may not want to pay more but they also don't want to see their children, their friends and their neighbours dying from liver failure in their 20s and 30s." The Committee went on to say that recent UK governments have worked too closely with the alcohol industry and have refused to intervene in the way that alcoholic drinks are priced. 15 In 2008, taxes on alcohol in Britain are already among the highest in Europe. Beer and wine are taxed at 33 pence a pint and around f1.50 a bottle respectively, and alcoholic Extract C: Is alcoholic drink too cheap? In a free market, should we stop alcohol being cheap? We may wish to end the sale of lager that costs less than bottled water, but it is simplistic to assume that binge-drinking is price-sensitive. And it is wrong to allow drunken yobs to deprive ordinary consumers of the opportunity to buy wine, beer and spirits at a reasonable market price. A change in behaviour, not pricing, is needed. There are laws against drunken 5 behaviour and selling alcohol to under 18s, but they are not always enforced rigidly enough; they may also need to be made stricter. Most major supermarkets are careful not to sell alcohol to anyone under 18, but would 21 be a more sensible age limit? Meanwhile, some smaller shops are shockingly casual about the under-18 rule. A Tesco spokesperson recently said: "We can't put up our prices because people will 10 simply shop elsewhere. It could be commercial suicide, and supermarkets can't act together to put up prices because that would be against the law." c) With the help of a demand and supply diagram, explain how an increase in the age limit to 21 might affect the market for alcoholic drinks. (12 marks)