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This article was taken from IAS, 23rd February
Minimum unit pricing is the healthiest pricing policy, says Sheffield experts
Minimum unit pricing and taxing all alcohol by strength are the best approaches for targeting a reduction in health inequalities of alcohol consumption, according to a comparative analysis of alcohol pricing strategies published in PLOS Medicine.
Using their well-known Alcohol Policy Model, the Sheffield Alcohol Research Group were able to estimate the impact of four different economic policies on alcohol consumption and health. Their findings showed that a minimum unit price of 50p was estimated to reduce consumption among low income heavy drinkers by 7.6% and low income moderate drinkers by 2.9%. Replacing current excise duties with a flat rate of £0.22 per unit of strength for all beverage types (volumetric taxation) was the next most effective policy, estimated to reduce consumption among low income heavy drinkers by 5.8% and low income moderate drinkers by 3.1%.
These results were in contrast to simply increasing current alcohol taxes to the equivalent level (13.4% increase), which was estimated to reduce consumption among both low income heavy drinkers and moderate drinkers by 2.2%. The least effective method was to introduce a 4% ad valorem tax to alcohol prices (specific sales tax on product value after duty at the time of purchase), which was estimated to lower consumption among both sets of drinkers by 2.1%.
In terms of reducing mortality among the heaviest drinkers and reducing alcohol-related health inequalities, the research team found that minimum unit pricing had the greatest impact on consumption among heavy drinkers on low incomes who are at greatest risk of harm from their alcohol use.
Among heavy drinkers in the lowest socioeconomic group, the estimated effects on mortality rates were −3.2% for the current tax increase (it reduced alcohol-related deaths by 3.2%), −2.9% for value-based taxation, −6.1% for strength-based taxation, and −7.8% for minimum unit pricing.
As a result of these targeted effects, these policies were also the most effective in reducing the gap in alcohol-related deaths rates between the lowest and highest socioeconomic groups, the authors of the study wrote.
“The alcohol-related mortality rate was 108% higher in lower socioeconomic groups before introducing any policy but this gap was estimated to reduce to 79% higher under a 50p minimum unit price and 83% higher when taxing all alcohol by strength,” they said.
The study contributes to an area of alcohol policy where evidence is needed for comparing the health impacts of different taxation and pricing strategies, including taxation by price, by beverage volume, or by alcohol content, and across population groups.
Commenting on the implications of their findings for the long-running minimum unit pricing court battle between the Scottish Government and a consortium of industry players led by the Scotch Whisky Association, the authors wrote:
“Our comparison of minimum pricing to tax policy options is fundamental [to the legal case], as it shows that whilst with substantial duty increases, the same overall reductions in deaths and hospital admissions could be achieved, these would not target heavy drinkers as effectively, lead to greater consumer spending increases and be less effective at reducing health inequalities.”