Alternatives to Classical Regulation

There is growing concern about lemonade binge-drinking. People are getting so high on the sugar content of the drinks that they have started late-night rioting in cities, leading some newspapers to suggest that inner cities have become ‘no go’ areas. At the same time, there has been concern about the long-term health effect of lemonade drinking and complaints that lemonade has been marketed to young children in particular — and teenagers, especially girls, have been prominent in latenight rioting. Lemonade cafés are a particular feature of Amnesian society and appear prominently in tourist guides, although their economic significance has suffered since the introduction of anti-smoking legislation. Supermarket sales of lemonade have increased. Tax rates for lemonade are lower in Amnesia’s neighbour country, Dezertia.Amnesia wishes to address the problem of lemonade binge-drinking. It also is committed to an approach that favours ‘alternatives’ to regulation over ‘classical regulation’ (defined as legal standards backed by sanctions). This follows an international trend in advocating ‘alternatives to regulation’ (BRTF 2000; OECD 2002, 2010a; Department of Treasury and Finance 2007). Alternatives include exemptions, market-based solutions, design-solutions and self-regulatory options, and also the ‘donothing’ option. So what would you advise? What do we know about the regulatory tools available and how they would deal with the problem of lemonade binge-drinking?