Alcopops - has the tax worked?
The alcopops tax has worked to reduce drinking by young people but broader changes and a comprehensive approach that includes taxation reform are needed to tackle alcohol abuse across the wider community, an article in the Medical Journal of Australia says.
The April 2008 increase in excise on ready-to-drink spirit-based beverages (RTDs or alcopops) closed a loophole that resulted in RTDs being taxed at a much lower rate and therefore cheaper to buy than spirits.
The alcohol industry tried to label the tax a failure. However, Professor Mike Daube, Director of the McCusker Centre for Action on Alcohol and Youth, and co-authors said that alcohol sales figures showed that RTD sales fell by more than 30 per cent in the 2008-09 financial year, and declined further in 2009-10.
The 2008 Australian Secondary School Alcohol and Drug Survey (ASSAD) also showed that the proportion of students who reported drinking in the week preceding the survey - 27 per cent - was significantly less than in the 2005 survey, and the proportion of students who reported drinking at risky or high-risk levels had declined by 30 per cent.
“So while the stated preference of young people for RTDs did not change in this survey, there were reductions in overall drinking and risky drinking,” Prof Daube said.
Although sales of other spirits increased, the rise accounted for less than half the decrease in RTD sales, with a net effect of a 1.5 per cent reduction in all alcohol apparently consumed in 2008-09 and a further reduction the following year.
“Is the alcopops tax working? To the extent possible, probably yes in that RTDs are not the only beverage of concern and young drinkers and teenagers are not the only Australians being harmed by drinking,” Prof Daube said.
“The alcohol industry spends hundreds of millions of dollars promoting its products. If a pricing strategy is to be used to reduce hazardous consumption and harm – and it is clear that price is the most effective and cost-effective measure we can use – this should be as part of a comprehensive approach.
“The Government should seriously consider setting a minimum price per standard drink. This would curtail the alcohol industry’s ability to discount prices to increase sales and to shift consumers to cheaper alternatives.”
The Medical Journal of Australia is a publication of the Australian Medical Association.
The statements or opinions that are expressed in the MJA reflect the views of the authors and do not represent the official policy of the AMA unless that is so stated.
CONTACT: Prof Mike Daube 0409 933 933