The small businesses that are fortunate enough to be situated around the site of a World Cup usually benefit tremendously from the economic boom that occurs due to the influx of individuals and capital. The inflow of a great number
of fans from all over the world into an area immediately increases the demand and prices of local commodities. The overwhelming excitement gushing through the veins of ardent fans makes them slightly irrational about their spending behaviour. Before they
know it, they are spending their wallets out in the bars nearest to the stadium while regaling loved ones about how great the match was or how great it’s going to be. Therefore, alcohol understandingly becomes a very hot commodity in the taverns located near
important stadiums and bar owners stand to make a good profit from the timely manipulation of prices.
In New Zealand, the restaurants and bars around Eden Park seem to have quickly familiarized themselves with the potential profits to be made from the upcoming World Cup. It is therefore being expected that during the event, fans
might have to pay as high as $17 per glass of wine. Although the wine industry of the region has vehemently denied the charges of price manipulation yet the evidence seems to state otherwise. Even today the prices of certain brands of white wine have gone
up to $ 15 per glass in the bars of Mt Eden as well as in Kingsland. The managers have tried to defend their decisions by using the argument that the fans are not only paying for the wine but also for the superior quality and if they wanted they could buy
much cheaper wine from elsewhere. There does seem to be some truth in the claim for the price for a glass of sauvignon blanc in the region varies between $7.5 and $16 and therefore the individuals could go to any of the cheaper bars and get themselves drinks
that are cheaper and of apparent inferior quality. A tough battle seems to be playing out as the customers try to maximize the utility gained from the matches by maximizing the quality of wine consumed while minimizing the prices where the bar managers try
to do the opposite.
However the people of New Zealand do not seem to be pacified by these arguments and they are bent upon taking effective measures to ensure they are not exploited. Many have voiced complaints regarding the unfair pricing for alcohol.
It is also expected that the increase in the price of alcohol shall lead to a fall in spending on other items such as dining in restaurants as people would attempt to control their overall spending. This could lead to a potentially explosive situation between
bar managers and restaurant owners which could further develop into a mini crisis. It is essential therefore for this situation to be explored beforehand.
In defense of the bars, it has to be conceded that they still seem to be facing difficulties keeping themselves afloat after the recent international recession that resulted in the collapse of many stronger competitors. The managers
too seem to be pretty determined in their conviction that after the GST increase in October, prices have reached a ceiling and therefore were unlikely to cause further increases in wine costs. Fans can only keep their fingers crossed at this point and hope
that they do not have to go without liquor during the tournament or pay in ‘double digits’ for both scenarios would definitely dampen spirits.
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