Australia: Academics: MUP may reduce alcohol consumption
By Doris Prodanovic
January 22, 2020
The introduction of a $1.30 minimum unit price (MUP) per standard drink across Australia could reduce alcohol consumption by 1.5 standard drinks per week, according to a recent study by La Trobe University.
Australian drinkers consume around 14 standards drinks per week on average, with harmful drinkers consuming around 17 times more alcohol per week than moderate drinkers (80.7 vs 4.6 standard drinks).
La Trobe Centre for Alcohol Policy Research (CAPR) health economist Dr Jason (Heng) Jiang said alcohol affordability in Australia has remained relatively unchanged over the last 30 years, resulting in an increase of alcohol-related hospitalisations, emergency department and ambulance presentations and treatment episodes needed.
“Our findings show it’s time we had a discussion on alcohol pricing or tax reform in Australia,” said Jiang.
“Although applying a uniform tax rate across all beverages or introducing a $1.30 minimum unit price across all states and territories could have a similar impact on overall alcohol consumption, the beneficiaries are quite different.”
“The former will increase tax revenue for the federal government while the latter will only increase sales revenue, benefitting alcohol retailers, wholesalers and/or producers.”
CAPR found that applying a uniform excise tax rate of $0.97 per standard drink (equal to the 2013 spirits tax rate) across all beverages could generate a similar impact to the $1.30 MUP policy, but with greater impact on moderate drinkers, with an 8.8 per cent fall in consumption (0.4 standard drinks per week).
It also found the introduction of a MUP has the potential to improve health inequalities in Australia, as it could reduce consumption particularly among harmful drinkers and lower income drinkers, with comparatively smaller impacts on moderate drinkers and higher income drinkers.
No benefit to MUP: Alcohol Beverages Australia
Pan-industry body Alcohol Beverages Australia CEO Andrew Wilsmore, however, has argued alcohol consumption is at a 50-year low in Australia, with the new normal being moderate consumption across the board – “therefore, we can’t see any benefit to Minimum Unit Pricing”.
“It’s a blunt instrument that forces the majority of responsible drinkers to pay more and takes a proportionally greater amount from those on lower incomes,” said Wilsmore.
“The buying habits of heavy drinkers and those with substance abuse problems do not respond to price increases. This inelasticity of demand demonstrates that MUP effectively punishes responsible drinkers, while doing nothing to help people who really need help with their alcohol consumption.”
Wilsmore said Australia has one of the highest taxes on alcohol in the OECD, and should be supporting targeted education programmes and measures around responsible drinking, rather than further raising prices for everyone.