This important aspect of External Influences comes into sharp focus this week, as the new Sugar Tax comes into force on April 6th, and Scotland introduces a minimum price for alcohol of 50p per unit on May 1st. A level students are amongst the key targets for these new government policies. This makes it a great subject to practice their skills of Analysis and Evaluation when learning about the impact of government policy on business strategy.
The UK Government's objective for the sugar tax is given on www.gov.uk as:
The Scottish Government's website, writing about minimum pricing for alcohol, says that
In a piece commissioned by the BBC, Kate Smith of the (independent) Institute of Fiscal Studies examines these new policies, the reasons for them and whether they will be effective in solving problems caused for individuals and for society.
It contains data about the policies that are being introduced and some useful background data on sugar and alcohol consumption, and the changes that have already been introduced by some manufacturers in anticipation of the new sugar tax. This, together with the stated objectives given above, could serve as a good stimulus for discussion about which stakeholders are affected by the changes, and how they are likely to respond, and lead on to some good chain-of-analysis work on the likely impact on each stakeholder - making particular reference to both price and income elasticity of demand. The UK Government page linked above has some very helpful comment on likely revenue to be raised, the impact on individuals and households, and on businesses, and on the wider health issue. The Scottish Government give more detailed information for businesses about their responsibilities, and how to calculate the price they must charge, here: https://www.mygov.scot/minimum...
Some follow up evaluation of effectiveness, both of the tax and minimum price, and of other alternatives which could be used, will also be suggested by more detailed reading of the article, and could form the basis for students to make their own recommendations for the most effective policies to achieve the government's stated objectives.
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