2: Health Aspects

GVA Fact Sheets: Overview; 1: UK Alcohol sales and consumption; 2: Health Aspects; 3: Excise tax on Gin and Vodka; 4: The UK white spirits market; 5: Exports and Imports; 6: Spirits Ready-To-Drink beverages (RTDS); 7: Cumulative burden of taxation, regulation and extra costs; 8: European fiscal issues; 9: Environmental, employment & rural issues; 10: The gin and vodka industry in scotland; 11: World Gin industry

Industry's recognition of its role in promoting responsible drinking

The industry and is fully committed to working with Government and other stakeholders in tackling alcohol misuse. As has already been illustrated, per capita alcohol consumption has fallen in recent years. In spite of this, there are increasingly vocal calls for significant increases in alcohol duties in order to reduce consumption and harm arising from misuse.

Excessive or anti-social drinking behaviour is a complex social problem, and as demonstrated by numerous studies, is not solved with blunt, population-based policy measures. Tax increases penalise producers and the vast majority of those who drink responsibly while having little impact on those who misuse alcohol. There is limited correlation between tax rates and harmful consumption. Excise duty is a tax on the producer and, while tax is a major element of retail price, changes are influenced by many factors. Those who consume alcohol to harmful levels are generally the least sensitive to price changes. One study even suggests that the heaviest drinkers have perfectly price inelastic demands.
The demand for alcohol: The differential response to price". W.G.Manning, L.Blumberg and L.H. Moulton, Journal of Health Economics, 1995.

Increase Prices to reduce alcohol deaths

It has been argued that alcohol prices should be increased by 10% in order to decrease alcohol-related deaths. These reports appear not to recognise that the Per capita alcohol consumption has fallen in the recent years. Additionally, it is obviously impractical to have different rates of Excise in the On-and Off Trade. The tax per bottle is already 69% in the Off Trade (Supermarkets) and over 84% for 'Cheapest on Display'. Any tax rise will mean that the Excise contribution towards health 'costs' would be reduced. Increases in taxation in the order illustrated above will feed into the shopping basket and fuel inflation at a vital time for restraint.

Consumers of alcohol to harmful levels are less sensitive to price changes. It is not clear how an increase in prices would affect mortality rates, as those who consume alcohol to harmful levels are less sensitive to price changes. An increase in prices will have an impact in reducing alcohol sales - and tax revenues - but it is most likely that it will affect only the low to moderate consumers without significantly affecting the rate of alcohol-related deaths.