Upping The Tax On Premixed Spirits - A Step In The Right Direction?

Main Category: Alcohol / Addiction / Illegal Drugs
Also Included In: Nutrition / Diet;  Public Health
Article Date: 30 Aug 2008 - 0:00 PST

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Whilst the Australian government should be applauded for increasing the tax on premixed spirits, the authors of a Comment in this week's edition of The Lancet say it should be part of a battery of strategies to reduce both binge and excessive drinking.

Dr Christopher Doran and Dr Anthony Shakeshaft, National Drug and Alcohol Research Centre, University of New South Wales, Sydney, Australia, discuss the possible effects of the 70% increase in excise duty on premixed spirits brought in by the Australian Government in April 2008, from AU$39.36/L to $66.67/L.

They say: "The excise increase raises the question about whether consumers of premixed spirits will simply switch their preferences to purchasing unmixed spirits or cheaper beverages. Across the whole population, switching to unmixed spirits is unlikely to be a major issue, because even if all current drinkers of premixed spirits switched to unmixed, they would still comprise a small market share (about 30%) relative to beer drinkers (about 66%)." Further, they add that young people are particularly unlikely to switch to cheaper beverages, since spirits are the drink of choice among the 45% of 16-17-year-olds who drink in Australia, despite such drinks being the most expensive per litre of alcohol.

In conclusion, the authors say that while the Australian government should be applauded for this step in the right direction, overall rates of usual or binge drinking in Australia are unlikely to fall due to the small overall market share of spirits (see table in full Comment). They say: "This conclusion does not indicate, however, that the government's decision was wrong - going part of the way is not the same as going the wrong way. The principle of a standardised tax rate is sound, and governments have a clear role to proactively improve public health."

The government should, they say, combine taxation issues with other supply and demand initiatives. They conclude: "The government could adopt a battery of strategies, such as the provision of incentives to encourage manufacturers to market mid-strength and low-strength beer, the imposition of restrictions on the availability of drinks with a high alcohol content, and more effective regulation of advertising codes of practice."

"Upping the tax on premixed spirits - a step in the right direction"
Dr Christopher Doran and Dr Anthony Shakeshaft
The Lancet, Volume 372, Number 9640, 30 August 2008
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The Lancet