Just Majestic

Drafting legislation must be a thankless task. All those lawyers, double meanings, wriggle room, my version of certainty against your version … and that’s before the MSPs get their hands on it. What a job … cross fingers and hope it all hangs together, I suppose.

The Scottish Government’s campaign against alcohol abuse in Scotland is well known. More is to come, despite previous shenanigans around the proposals for minimum pricing per alcohol unit. Unfinished business doesn’t come into it. And that’s even before the latest legislation comes into force.

Life is too short to detail the Alcohol Scotland Act 2010 which comes into force on October 1, 2011, or the wriggle room that will be exposed in the coming months. If you are desperate then see a lawyer … but be prepared, you might need a drink afterwards. And if you are a retailer and have not thought through the implications for your business yet, then get a defence lawyer … time is not on your side, unless you fancy time “inside”.

The intention is clearly laudable; responsible behaviour around alcohol. It is hard to argue against the sentiments behind some of the suggestions and remedies. Given the data on alcohol and Scotland we need to do something … but that’s where consensus breaks down. Nonetheless the Act brings in restrictions on multipack sales and quantity discounts amongst other things, so as to discourage (too) cheap pricing and binge buying.

This all sounds fine, but let’s consider a moment. If we are really interested we can consider the official guidance to the Act. The law says that multipacks need to be priced in multiples of the single unit price. So if a retailer doesn’t sell single items, or if the multipacks are of a different size product (44oml versus 500ml say), then what is the base price?

Even more interesting may be the banning of quantity discounts, to cut price discounting and so-called “incentives” for bulk buying (Let’s ignore the issue of whether loyalty card points are incentives or “irresponsible promotions” – the official guidance says this may be an issue for the Courts).

Having just received their recent leaflet, this is where Majestic comes in.

Majestic have responded to the change in the law by pricing single bottles of wine in Scotland at the equivalent of the two bottle price in England. So a headline figure on a bottle of wine on the 30th September in Scotland is £7.99 (but is £5.99 if you purchase two, and remember that the Majestic minimum buy is a mixed half case). On on the 1st October this will become £5.99 on the bottle in Majestic in Scotland.

Magic isn’t it … headline wine prices down. Just what the legislators wanted – I think not.

And that’s the problem with legislation. Drafting something is the easy part; drafting something to cover all eventualities and not to look stupid is much harder. So that’s where the lawyers come in (again).

I know this is really an oddity created by the marketing and promotional approach used by Majestic, but it does illustrate that the Scotland/England divide will raise issues. And that’s not even going into the guidance which says online sales based in England but delivered to Scotland are not covered by the Act – thereby providing an incentive (irresponsible promotion anyone)  to English  internet sales and against Scottish based shop jobs, and driving a rather large articulated vehicle through a small part of the sustainable Scotland programme. Finding a sensible way forward on promotion and marketing of alcohol in Scotland may not be  not as straightforward as some seem to think it is.

Slainte.

About Leigh Sparks

I am Professor of Retail Studies at the Institute for Retail Studies, University of Stirling, where I research and teach aspects of retailing and retail supply chains, alongside various colleagues. I am Chair of Scotland's Towns Partnership. I am also a Deputy Principal of the University, with responsibility for Internationalisation and Graduate Studies.
This entry was posted in Discounts, Government, International Retailing, Majestic, Online Retailing, Pricing, Promotion, Regulation, Retailers and tagged , , , , , , , , , . Bookmark the permalink.

2 Responses to Just Majestic

  1. Adam Blackie says:

    Leigh,
    Are there any marketeers, economists or historians in the Scottish Parliament? It seems not.Otherwise they would know that the efforts to reduce smoking taught us that :-

    – Price makes little difference, in fact it probably made the cigarette manufacturers wealthier as their cut became increasingly smaller v’s the Taxation element. Is alcohol similarly price-inelastic?
    – Product packaging regulation is effective. The compulsory warnings on packets was, in my opinion, the start of the process of weaning smokers off their habit and preventing others from starting. It certainly worked for me. The warnings on alcoholic drink labels currently go un-noticed. They could be increased in prominence at almost no cost to the manufacturers.
    – Place makes a difference. Only licensed premises can sell cigarettes in fairly restricted circumstances and with penalties for breaching the rules. Also, banning smoking in public places seems to have been the most effective weapon as it became almost universally anti-social overnight.
    – Promotion was also effective.Reducing the ability to advertise cigarettes, other than in a very local and specific context seemed to work well for a time.

    In this case it appears that parliament is attacking the least effective of the four P’s of Marketing.

    Cheers,
    Adam.

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