Study on the affordability of alcoholic beverages in the EU

The European Commission DG SANCO has published a study on the affordability of alcoholic beverages in the EU, with a focus on excise duty pass-through, on- and off-trade sales, price promotions and pricing regulations.

The new study, prepared by RAND EUROPE, is based on the knowledge that, in spite of extensive evidence that raising alcohol prices reduces alcohol consumption and harm, the real price of alcoholic beverages is decreasing across the EU. Yet governments have at their disposal many types of pricing policies to address alcohol harms. In addition to taxes, there are also restrictions of promotions and discounts, bans on below-cost sales, and the introduction of a minimum price on a unit of alcohol.

However, RAND say that there remain many gaps in the understanding of the various factors that affect how different pricing policies translate into actual price changes across the EU. The study therefore focuses on four areas of inquiry:

• The link between changes in excise duties and changes in alcohol consumer prices – the extent to which changes in alcohol taxes are passed through to consumers Study on the affordability of alcoholic beverages in the EU

• The trends in the ratio of on-trade to off-trade consumption of alcohol, and their drivers • Trends in regard to alcohol price promotions and discounts in the on- and offtrade across the EU

• Regulations in Member States’ on-price promotions and discounts, their compliance and effectiveness The main findings of the report are:

• Different countries vary in the extent to which changes in excise duties are passed through to consumers in the prices they pay, and there are variations for different beverages and for different types of premise

• For example, there is less than full pass-through for beer excise duties both in the on- and off-trade in Ireland and Finland, whereas they are more than fully passed through in the off-trade in Latvia and Slovenia

• There is a trend towards more off-trade consumption in many EU countries

• Both formal alcohol policy and social and economic changes may influence the movement of alcohol consumption between the on- and off-trade sectors. For example, the current economic downturn may be helping to encourage off-trade consumption, partly because of lower prices

• Alcohol price promotions are widespread throughout the EU. For example, price promotions and discounts are common in both on- and off-trade in France, Ireland, Latvia, the Netherlands, Poland and the UK

• Many different types of non-tax pricing regulations are used across the EU, but little is known about their effectiveness in reducing alcohol harms

The Further study on the affordability of alcoholic beverages in the EU can be downloaded at: ec.europa.eu/health/alcohol/docs/ alcohol_rand_2012.pdf