Alcohol – price, policy and public health
Report on the findings of the Expert Workshop on Price Convened by Scottish Health Action on Alcohol Problems (SHAAP) December 2007
SHAAP is to be commended for producing this timely Report. It coincides with other calls on Central and Devolved Governments to take action now to prevent the rise in alcohol-related harm.1This Report contains seven key Recommendations, two of which call on the Scottish Government to make representation to Westminster to:
- increase alcohol duty and link alcohol taxes to inflation (Recommendation 3)2 and to
- link levels of taxation to alcohol strength
(Recommendation 4)3
On licensing, the Report highlights one of the fundamental differences between current Scottish and English approaches to alcohol policies referred to in Section Four (p. 43)
“In Scotland, a public health principle has been enshrined in the new licensing legislation which comes into force in 2009. This places a duty on local licensing boards to consider the protection and improvement of public health when granting or reviewing licences. The new legislation also prohibits irresponsible drinks promotion in pubs, clubs and restaurants (the on trade sector), meaning that ‘happy hours’, ‘all you can drink’ offers in return for a club entry fee, and other similar promotions, will be outlawed. More recently, the Scottish government has published regulations which, if implemented will require retailers to have separate display areas for alcohol.” (Draft Licensing (Mandatory Conditions No. 2) (Scotland) Regulations 2007).
Public health advocates in other countries may wish to consider action that would promote similar legislation to reduced alcohol-related disease and harm.
Dr Bruce Ritson (Chair), an ardent campaigner on alcohol and health, has overseen the production of a seminal report in terms of style, content and clarity. The Report merits a wide international readership, and its usefulness for advocates could have far-reaching impact. The arguments for and against using pricing and taxation policies are clearly stated and well referenced. The industry’s position is taken into account together with consideration of the political realities in introducing change. There is a strong rationale presented on why alcohol policies need to reach the majority of drinkers (SectionThree), and a detailed appendix on the relationship between alcohol, price and consumption (Appendix 1).
The Report concludes that:
“Having reviewed the international evidence linking price, consumption and harm; and considered the mechanisms for raising alcohol price in Scotland and the UK, this report advocates using price as a policy lever to reduce alcohol consumption and related harm. Based on estimates by the Academy of Medical Sciences, a 10% rise in alcohol price would save the lives of 479 Scottish men and 265 women every year.” Calling time:The nation’s drinking as a major health issues, Academy of Medical Sciences, March 2004) Conclusions and Recommendations (p.13)
1 “NewAlcohol Health Alliance calls for tougher measures onAlcohol”. AlcoholAlert Issue 1, 2008 issn 1460-7174
2 RECOMMENDATION 3 (p.16)
The Scottish Government should make representation to Westminster to increase alcohol duty and link alcohol taxes to inflation. Increasing the rates of duty on all categories of alcoholic drinks is a simple, straightforward means available to the Westminster government to raise alcohol price. It is possible for alcohol producers and retailers to absorb the costs of a tax increase without increasing the retail price of alcohol, and this is particularly likely in the case of big supermarkets that can subsidise losses on alcohol with profits from other products. However, the evidence suggests that most producers and retailers generally pass on the costs of tax increases to consumers. In addition to raising the duty on alcohol, the Westminster government should also index-link tax increases to counter the erosion of the real value of specific alcohol duties in nominal terms due to inflation.
3 RECOMMENDATION 4 (p.17)
The Scottish Government should make representation to Westminster to link levels of taxation to alcohol strength. Increasing levels of taxation on stronger alcoholic beverages and reducing the level of taxation on lower strength beverages would give a financial incentive to consumers to buy and consume lower-strength drinks (provided the reduction or increase in tax was reflected in the retail price) and to producers to produce lower-strength products.
Although the way excise duty is levied in the UK is subject to rules laid down by the EU, EU law allows taxes other than excise duty to be placed on alcohol products by individual member states. This gives the UK government scope to place further taxes, in addition to excise duty, on alcoholic beverages with higher alcohol content with the aim of reducing alcohol consumption and improving public health.
In particular, the duty on cider should be increased in relation to its alcoholic strength and taxed at the same rate as beer, a comparable alcoholic beverage.Under the current excise arrangements, cider is taxed at a much lower rate than beer of an equivalent alcoholic strength.
The full Report is available online:
SHAAP
12 Queen Street
Edinburgh
EH2 1JQ
Tel: 0131 247 3667
Fax: 0131 247 3664
Email: shaap@rcpe.ac.uk
Website: www.shaap.org.uk