Did the alcopops tax do the trick?

In 2008, the Rudd Government announced it would introduce a 70 per cent tax increase on ‘ready-to-drink’ alcoholic beverages in an effort to deter the youth of Australia from binge drinking.

So did the alcopops tax do the trick in reducing alcohol-related harm?

A new study showed that hospital emergency department presentations in New South Wales for alcohol problems in young people significantly decreased following the introduction of the ‘alcopops’ tax.

The results are there for all to see in a UNSW-led study led by Dr Marianne Gale and published recently in the journal BMC Public Health.

Until now, limited evidence had emerged as to whether the alcopops tax reduced rates of alcohol-related harm in young people. Previous studies looking at the alcopops tax only analysed trends over shorter time periods before and after the introduction of the tax.

Our study was the first to examine the longer term impact of the Goods and Services Tax (GST) and the alcopops tax on alcohol harm in New South Wales. The Goods and Services Tax led to a 40 per cent decrease in the tax on alcopops compared with straight spirits. Presentations then increased steeply from 2000 but decreased after the alcopops tax was introduced in 2008.

Our research team analysed the 107,810 presentations for acute alcohol problems to 39 hospital emergency departments (EDs) across NSW, including 62 per cent to hospitals in metropolitan Sydney, over 15 years from 1997 to 2011.

ED presentation trends were compared with the introduction of each tax. Under-age (15-17 years) and legal age drinkers were included in the study. Factors that may have influenced demand, such as the global financial crisis, were also taken into account.

The study found the GST, which decreased the price of alcopops relative to other alcoholic drinks, was associated with at least 3,260 additional alcohol-related ED presentations among 18-24 year old women from 2000 until 2008 when the alcopops tax came into effect.  Young women are a primary target market for alcopops.

The alcopops tax, which increased the price of alcopops, was associated with a significant decrease in presentations in males aged 15-49 years, and females aged 15-64 years, particularly in 18-24 year old women.

Between 2008 to 2011 a total of 1,350 presentations were avoided among 18-24 year old females and 514 presentations avoided among 18-24 year old males.

The results of the study are compelling and clearly show a month by month reduction in ED presentations following the introduction of the alcopops tax.

This is consistent with a gradual change in alcohol consumption behaviour driven by adaptive responses to tax changes by both consumers and the alcohol industry.

As the Commonwealth Government considers submissions as part of its review of the federal tax system, national taxation measures to reduce alcohol-related harm in Australia must be on the table.

The evidence is clear: increasing alcohol taxes can reduce harms associated with binge drinking, and not just decrease levels of alcohol consumption.

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David Muscatello

David Muscatello has a PhD in epidemiology and is a Senior Lecturer in the UNSW School of Public Health and Community Medicine. David's research interests include use of administrative databases for public health surveillance and policy evaluation.

This article has 2 comments

  1. Julia Reply

    This is very useful research. Great to see policy changes being evaluated. We included this research in our organisation’s submission following the recent tax discussion paper.

  2. Brad Wilkinson Reply

    It would be interesting to see about comparison rate of alcohol related ED presentations compared to illicit drug ED presentations and see if it is now on the rise as alot of young people you talk to these days regarding this issue say drinking alcohol is too expensive and it is just cheaper to get on the ice which is really sad, i hate to think what sort of a world my kids (3&6yo)are growing up into

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