Preventive health response to alcohol problems

Health researchers Michael Thorn (CEO of the Foundation for Alcohol Research and Education) and Professor Sandra Jones (Director of Centre for Health Initiatives at University of Wollongong) had an interesting article in Crikey yesterday pulling together some research on preventive health responses to alcohol problems. It’s paywalled (readable with a free trial), but here are some excerpts:

Price response: Studies consistently show that lower socioeconomic groups and people with limited disposable income (young people, indigenous groups and heavy drinkers) are more responsive to price.

Alcohol floor price: The Australian National Preventive Health Agency has made an economically convincing case that reforming the wine equalisation tax (WET) must come before introducing minimum price regimes. A view supported by brewers, distillers and two of Australia’s largest wine corporations.

Alcohol taxation benefit cost analysis: The research is clear that alcohol taxation reform is justified. 85% of Australians will be better off as a consequence. Access Economics’ analysis has been repudiated and the $20 billion a year cost estimate of alcohol’s “harm to others” confirmed.

Rational thinking: This is not a moral case. There are social, health and economic arguments that fully justify acting to reduce the more than $10 billion a year cost to government. These are tangible alcohol-related police, justice and health care costs that far exceed the $6 billion of alcohol tax collected each year.

Thorn and Jones’ article is in response to Bernard Keane’s piece two days previously decrying preventive health measures as attempts by “taxpayer-funded elites to crack down on what they disapprove of.”

Floor Pricing for Alcohol

A journalist whose views I usually respect today derided calls for an increase in the minimum price of alcohol as coming from the “killjoy” crowd, who “do not even attempt to … estimate the value of the pleasure given by alcohol to the vast majority of Australians who do not abuse it.”

This is balderdash. As with gambling, the problem is not with what the vast majority of Australians do, but with the problematic excesses of a few. In the case of alcohol, it is the problem of those who purchase litres of cask wine at 30c per standard drink and proceed to destroy their health and lives. Prevalently, these are people of lower socio-economic status, especially Aborigines. Coles, Woolworth, and IGA have already almost quadrupled this minimum price in Alice Springs by selling alcohol at no less than $1.14 per standard drink, without affecting the prices of beer, spirits, better wines, etc – the stuff the vast majority of Australians actually drink.

The Henry Review suggested that the final rate of volumetric tax should “be intended solely to optimise price signals facing consumers. It should be set without regard to the government’s fiscal position, and irrespective of any specific spending commitments related to alcohol abuse” (Australia’s Future Tax System, Chapter E5-3, 2010).

Floor pricing for alcohol is a sensible health proposal that deserves support, not to be dismissed out of hand as coming from the “killjoy” crowd.