UK Government Learns the Whole Supply and Demand Thing with Beer

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Last year England’s government raised the excise tax on beer eighteen percent. Now for some inexplicable reason beer sales have fallen roughly eight percent. The Daily Telegraph reports that brewers and pub owners are asking the government to rescind the tax. Seems that if you rise the price of something significantly you lower the demand. This means due to lower consumption the government is actually collecting less tax revenue. The economic crisis is also not helping of course as people cut back on eating out and socializing. I think the U.K. revenue people might have been able to predict this.

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Matthew Potter works supporting US Army aviation programs. He holds degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, Defense Procurement News.

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