Drink Tank

Minimum price – maximum benefit for the NT

In a significant and historic move toward reducing the Northern Territory’s unacceptable alcohol toll, the NT Government last week confirmed it will introduce a Minimum Unit Price (MUP) on alcohol from mid 2018; just one part of a detailed response to last year’s Riley review of alcohol policies and legislation in the Territory.

The Foundation for Alcohol Research and Education congratulates the Government for what is a landmark announcement; a decision that puts the evidence, and in turn, the health, welfare and safety of the people of the NT first, and ahead of all other interests.

Despite the evidence being strong for this measure, the Territory will in fact become the first jurisdiction in Australia to introduce an MUP.

An MUP promises to reduce alcohol harm by increasing the price of the cheapest alcohol products, the type preferred by the heaviest drinkers. Research in Canada and modelling undertaken by the Centre for Alcohol Policy Research for FARE has shown it to be highly targeted intervention, irrespective of socio-economic status. By making these products more expensive, the heaviest drinkers will reduce their consumption while moderate drinkers will largely be unaffected.

But it is crucial to get the settings right. This is because the effectiveness of an MUP depends not simply upon its introduction, but on the level at which the price is set and the extent to which this will affect demand.

If set too low, it will not achieve the widespread and substantial reduction in harms that the government and community would like to see.

The NT Government has announced an MUP of $1.30 per standard drink that will be indexed against average ordinary time wages to ensure its effect is not diminished over time. This level will certainly make a difference in Darwin where it is possible to buy a 750 ml bottle of red wine for $5.00.[1]

Outside of Darwin, the measure will also make an impact. In Alice Springs, a bottle of cabernet sauvignon was last week available on special at $8 per bottle. With eight standard drinks, this is equivalent to $1 per standard drink. When the $1.30 MUP is introduced, the lowest price this product can be sold for will be $10.40 per bottle, and a two-litre cask of Shiraz, containing 21 standard drinks and currently selling for $21, will not be able to be sold for less than $27.30.

The People’s Alcohol Action Coalition (PAAC) has for many years called for a floor price set at the price of full strength beer. The normal price for a popular Victorian full strength beer is $1.78 per standard drink in Alice Springs, although when on special, it may be available for as low as $1.48 per standard drink, or $48 per carton.[2]

This is still higher than the level that the government has set the MUP at, but since the preferred product of heavy drinkers in Alice Springs is cheap bottled wine, evidenced by the empty bottles left strewn in the bed of the Todd River, the $1.30 MUP will still be effective in increasing the price of the cheapest products.

But this measure won’t just have an impact on those who drink in the riverbed in Alice Springs. An MUP will impact everyone who drinks at harmful levels, regardless of their income. This is the whole point. This is the beauty of this measure. It applies to all products in the same way, but has little or no impact on light and moderate drinkers. It is a highly targeted measure.

There aren’t many products available at $1 per standard drink in Alice Springs (most sell for $1.30 or more), but there are enough to see some impact. It may be that the price at which the MUP has been set is too low for places that sit outside Darwin, but we won’t know this until we give it a go.

Monitoring the impact of the floor price will be critical to understanding how well it is working, so it is welcome news that the government will be doing exactly that and is prepared to adjust the price if needed. Committing to robust evaluation, on-going monitoring and continued engagement with the experts working in the area of alcohol harm reduction will be essential.

Other jurisdictions around the country should take notice of what the Northern Territory is doing. The Government’s response to the Review is a watershed moment for the Territory and an historic opportunity to address the Territory’s number one social issue – the unacceptable level of alcohol harm that has ravaged the NT for generations.

[1] Based on the price of a 750ml bottle of Whispers Shiraz, available in store at Liquorland, Mitchell Street Darwin

[2] Based on the price of Victoria Bitter (24x 375ml stubbies, sale price of $50 per case, full price quoted at $60 per case, 1.4 std drinks per bottle) at BWS Alice Springs (36-38 Hartley Street) on 26 February 2018

Meredythe Crane

Meredythe Crane is a Senior Policy Officer at the Foundation for Alcohol Research and Education (FARE). Her background is in health and education. Meredythe previously worked at the Alcohol and other Drugs Council of Australia.

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