Originally Posted by joe40
People also keep saying this will raise the price of all drinks, as if it is a foregone conclusion. I understand the reasoning, but don't believe that will happen. Retailers will still price their product to sell.
If the likes of Heineken, bud or craft beers currently selling above MUP could command a higher price, they would be doing so already.
I just don't accept the argument their price will automatically go up in line with price increases elsewhere.
I think the clue is in the title. It is MAP. The government is setting the lowest level at which a lager (for example) can be sold. Once a floor is set, lowest price is no longer a factor.
But there is no upper price. It is why the craft beers sell for far more the lies of Dutch Gold. Simply because the consumer is willing to pay more for that they perceive to be a better product.
Now, in the short term prices probably won't rise, but after a few months the new price will be factored in by the consumer and they will return to their old habits. So they will again be prepared to pay a premium for the Craft Beer. Thus the Craft beer would be made to maintain the old price as now the 'market' price as increased.
It might take longer that a few months, I don't know, but it will happen. Just as the price inevitably moves towards €1 instead of .79p after the changeover. It is simply repositition the value of value within the market.