Stats NZ released its Consumer Price Index today. 
Booze & Ciggie Inflation
Here’s what’s been happening to the relative cost of your weekly booze and smokes.
Booze and smoke annual prices increased approximately 1.6% faster than other goods and services between 1988 and 2009. All other goods and services increased in price, but booze and smokes increased on average, 1.6% per year faster.
Sin Taxes
Between 2009 either the government or the suppliers decided they weren’t making enough money. The annual price of booze and smokes, relative to general prices, increased approximately 2.6% faster than other goods and services.
The government automatically indexes the excise taxes on booze and fags to changes in the consumer price index: “sin” taxes.
Its argument is that it doesn’t want alcohol to become “relatively” cheaper over time. Inflation will increase the cost of all of the other inputs in the booze and fag production process. Indexing excise tax to inflation ensures the government gets to extract the same proportion of the total price of booze or ciggies as tax.
If the tax component didn’t change then booze and fag production would become more affordable to consumers and/or more profitable to producers over time.
And somehow that would be “bad”.
😐
Just remember that your booze taxes are CPI increased, but your tax brackets aren’t. And then tell me how the government acts in your interests…
… anyway…
Between 2009 & 2021, producers have been able to sneak in an extra annual 2.6% price increase over the cost of inflation.
However, since the RBNZ has focused on inflation (2021 ish), the real cost of your weekly tipple has fallen about 0.4% per annum.
Price Levels
If the cost of a six-pack of beer was about $15 in 2021, here’s what it might have cost back in time.
Back when I started uni (1990), I would have only been paying about $4.49 for a six pack.
Here’s the spreadsheet I used to make these pictures: Relative_Prices.xls
Next up: what’s happened to the quantity of alcohol consumed?