What works to reduce alcohol-related harm and why aren't the policies more popular?

AuthorCasswell, Sally
PositionResearch Papers

Abstract

There is a considerable body of research evidence documenting effective policies that reduce the harm a community incurs from alcohol. These effective policies include influencing accessibility to alcohol (including the price the consumer pays), drink-driving enforcement and marketing practices. Using evidence-based review as a template, an analysis of alcohol policy in New Zealand illustrates areas where New Zealand has failed to implement effective policy and some areas in which New Zealand compares favourably with overseas. An analysis of the policymaking process illustrates contestation within the policy arena similar to that commonly found in comparable jurisdictions. We conclude that increases in alcohol consumption in recent years, and in particular the high levels of consumption by younger drinkers, is an outcome of the policy decisions taken in New Zealand since the late 1980s.

BACKGROUND

In developed countries such as New Zealand, alcohol ranks third of 20 risk factors in its overall impact on disease, disability and death, according to the WHO Global Burden of Disease study (World Health Organization 2002). In addition to costs to the health sector there are substantial costs to the Police, Justice, Corrections and Social Development sectors, and there are also effects on productivity. Uptake of effective policies to alleviate this burden is therefore important.

New Zealand had in place a National Alcohol Strategy covering 2000-2003, which included targets set for consumption levels and self-reported harm (Alcohol Advisory Council and Ministry of Health 2001). These targets were based on survey data collected in 1995. When the measures were repeated in the National Alcohol Survey carried out in 2000, some of the measures, particularly those pertaining to the drinking of younger people, were trending in the wrong direction (Habgood et al. 2001). The next set of relevant data will become available next year in the National Alcohol Survey carried out by SHORE and Whariki on behalf of Public Health Intelligence of the Ministry of Health.

There is now a considerable amount of research evidence that documents policies likely to be effective in reducing alcohol-related harm. Generally, these are policies that alter the environment in which choices are made, such as limiting physical and economic accessibility to alcoholic beverages, strengthening drink-driving legislation and restricting the marketing of alcohol.

Many of these environmental policies are actively opposed by alcohol industry bodies. Industry-friendly policies are very different. Consistent with a policy approach most likely to maximise profits, they aim to ensure products are readily available and affordable. The strategies they promote centre around educating the individual drinker to make responsible decisions--an approach that fares least well in evidence-based ratings of policy effectiveness.

The ensuing policy debate is often played out in the media--where issues are "defined, solutions suggested and credibility of various commentators on current issues established" (Babor et al. 2003:247)--with significant influence on the policy outcome. The following analysis of some key events in alcohol policy making since the late 1980s in New Zealand draws on published and unpublished documents, including reports, submissions to government and coverage of the issues in the media, and illustrates this kind of debate.

This paper uses a framework for the effectiveness of alcohol policies established by an international project involving 15 scientists (Babor et al. 2003) utilising a systematic review approach. The project reviewed effectiveness in reducing alcohol consumption and harm at the population level, and assessed the breadth of the research support and the likely costs of implementing the policies. The effectiveness ratings indicated for specific interventions in this publication are broadly consistent with a previous international collaborative review (Edwards et al. 1994) and a recent review of evidence commissioned to inform the prevention agenda in Australia (Loxley et al. 2004). The Babor et al. (2003) framework is used to gauge how New Zealand rates in its implementation of evidence-based policy to reduce alcohol-related harm.

PRICING AND TAXATION

The effect of prices on consumption and consequent harm is one of the most extensively investigated alcohol-control measures (Osterberg 1995), with evidence overwhelmingly leading to the conclusion that alcohol prices have an effect on the level of alcohol consumption (Babor et al. 2003, Chisholm et al. 2004, Loxley et al. 2004). Heavy or problem drinkers appear to be no exception to this rule, and young drinkers appear to be especially sensitive to price increases (Chaloupka et al. 2002, Coate and Grossman 1988). Their revenue-generating ability also makes higher levels of taxation an attractive policy.

Babor and colleagues (2003:264) give this policy the highest effectiveness rating and find it to be based on a wide breadth of research support. Its cost to implement is low, making taxation a key umbrella policy for most if not all jurisdictions (see Table 1).

New Zealand Experience

In New Zealand, alcohol excise tax has been primarily justified by the health and welfare costs of alcohol products. Since 1989 the tax rates have been linked to the Consumer Price Index, and there is an additional separate levy to fund alcohol harm prevention, research and treatment. New Zealand compares favourably with many similar countries that do not have such a levy, many of which are not indexed to inflation and have experienced a drop in the real price of alcoholic beverages over the last decades (Babor et al. 2003).

New Zealand compares less favourably, however, with nations that have significantly higher excise tax rates for alcohol. For example, tax on beer as a percentage of retail price (10%) is lower than that of several comparable countries including the Netherlands (20%), Ireland (20%), Denmark (34%) and Australia (24%) (World Health Organization 2004).

Another less positive aspect of the policy is New Zealand's use of a banded excise tax system rather than one based directly on ethanol content of beverages. This creates opportunities for manufacturers to produce cheap, high-alcohol products in order to get the best tax advantage. Not surprisingly, excise tax on alcohol is one of the policy areas most vigorously opposed by industry groups, who continue to lobby for its complete abolition. Excise tax, said Nicki Stewart, Chief Executive of the Beer Wines and Spirits Council, is a "burden on the alcoholic beverage industry" (Stewart 2001).

The 1990s in New Zealand was a time of liberalisation of alcohol policies in keeping with a general pro-market ideology (Boston et al. 1999). There was extensive lobbying by alcohol industry representatives in New Zealand, and political statements suggested their efforts were bearing fruit. The Prime Minister at the time, Jim Bolger, promised that excise tax would decline, leaving only Goods and Services Tax (GST) (Hubbard 1996), which had been introduced in the mid-1980s. Treasury undertook a "zero-sum" review of alcohol taxation (Hall 1996), concluding that the weight of evidence indicated that it should not be reduced.

Illustrating the typical process in the "war of ideas" carried out in the policy arena (George 1997), an industry lobby group, the Beer Wine and Spirits Council, commissioned an "independent" review of Hall's paper which criticised these "doubtful analyses" (Tasman 2001, reported in Beer Wine and Spirits Council et al. 2001). Further, in their submission to a national tax review in 2001, combined industry groups argued that excise tax has "no sound economic and social rationale" and recommended that its progressive phasing out be examined. Instead, consistent with an approach that focuses on the individual drinker, they favoured "policies that target misuse" (Beer Wine and Spirits Council et al. 2001).

The 2001 national tax review concluded that excise taxes were difficult to justify on either tax efficiency or tax equity grounds. They recommended that "as a matter of tax principle" the general revenue component of excise taxes should be replaced by an increase in GST (Tax Review Team 2001). This was followed in 2002 by a further Treasury paper which supported the case for a specific tax for alcohol, contending that the tax is "well-targeted" and should at least cover the total externality of alcohol consumption, which is likely to be significantly more than the revenue currently collected (Barker 2002). In support of this, a report commissioned by the Alcohol Advisory Council of New Zealand (ALAC) assessed that the revenue generated from the alcohol excise tax in New Zealand (approximately $500 million) does not cover the public health costs of alcohol-related harm, let alone the enormous social costs, and recommended that the excise tax be increased to at least cover external costs (Easton 2002).

The most recent taxation policy change addressed the issue of New Zealand's banded excise tax system. In May 2003 an amendment was made to the Customs and Excise Act which increased the price of the cheap "light spirits" that had been linked to binge drinking by young people. This was strongly opposed by industry groups and opposition Members of Parliament, who labelled it a "tax grab".

Future Policy Directions

While New Zealand national policy has stayed firm on taxation policy to date, history suggests the possibility of future threats to excise tax from industry lobbying. A new potential issue relates to the proliferation of trade treaties which, when they include alcohol, have been found throughout the world to lead, as part of the harmonisation process, to a reduction in taxation levels (Babor et al. 2003). The European Commission, for example, issued infringement proceedings against Sweden for its tax disparities between...

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