The Most Competitive Way to Reduce Binge Drinking

(by Bruce Lyons) The new UK government is proposing to ban below-cost selling of alcohol as a way to address the binge drinking culture amongst some groups of people.  Tesco has responded with a counter-proposal for a minimum price per unit of alcohol, which is also proposed for Scotland by the devolved government.  The UK budget deficit is huge so major spending cuts and tax rises are inevitable, possibly including on alcohol.  Which of these three measures is the best way to use the price system to achieve the government’s aims without substantial anticompetitive side-effects?

Cameron and Clegg Advocate Behavioural Economics – But Have They Got It Right?

(by Robert Sugden) Yesterday, the UK’s new coalition government published its agreed ‘Programme for Government’. As one of the pioneers of what has come to be called ‘behavioural economics’, I was intrigued to find that the second sentence of the section on ‘Consumer Protection’ reads: ‘We need to promote more responsible corporate and consumer behaviour through greater transparency and by harnessing the insights from behavioural economics and social psychology.’ What does this mean?

New UK Government to take responsibility for criminal cartel offence away from the OFT

(by Andreas Stephan) The UK’s new governing coalition between the Conservatives and the Liberal Democrats released its new programme for government today. In it they announced:

“We take white collar crime as seriously as other crime, so we will create a single agency to take on the work of tackling serious economic crime that is currently done by, among others, the Serious Fraud Office, Financial Services Authority and Office of Fair Trading.” (p9)

The End to Competition Between Major UK Supermarkets?

(by Morten Hviid) ASDA’s new price promise appears to ensure customers get the best deal, but may actually result in less competition between supermarkets.

Collapse of BA Trial Risks Undermining Cartel Enforcement

(by Andreas Stephan) The spectacular collapse of the ‘British Airways Four’ price fixing trial on Monday raises serious questions about the OFT’s competence as a criminal prosecutor and its reliance on a leniency programme. The fallout from the case makes it very unlikely that we will see more criminal prosecutions in the UK any time soon, especially as the cartel offence’s legitimacy may now be brought into question. With the threat of imprisonment for would-be cartelists left to sound a hollow ring, the deterrent message of cartel enforcement may have been significantly weakened.