Dataset Information

Increasing the Price of Alcohol as an Obesity Prevention Measure: The Potential Cost-Effectiveness of Introducing a Uniform Volumetric Tax and a Minimum Floor Price on Alcohol in Australia.

ABSTRACT: The objective of this study was to estimate, from an obesity prevention perspective, the cost-effectiveness of two potential policies that increase the price of alcohol in Australia: a volumetric tax applied to all alcohol (Intervention 1) and a minimum unit floor price (Intervention 2). Estimated changes in alcoholic drink consumption and corresponding changes in energy intake were calculated using the 2011-12 Australian Health Survey data, published price elasticities, and nutrition information. The incremental changes in body mass index (BMI), BMI-related disease outcomes, healthcare costs, and Health Adjusted Life Years (HALYs) were estimated using a validated model. Costs associated with each intervention were estimated for government and industry. Both interventions were estimated to lead to reductions in mean alcohol consumption (Intervention 1: 20.7% (95% Uncertainty Interval (UI): 20.2% to 21.1%); Intervention 2: 9.2% (95% UI: 8.9% to 9.6%); reductions in mean population body weight (Intervention 1: 0.9 kg (95% UI: 0.84 to 0.96); Intervention 2: 0.45 kg (95% UI: 0.42 to 0.48)); HALYs gained (Intervention 1: 566,648 (95% UI: 497,431 to 647,262); Intervention 2: 317,653 (95% UI: 276,334 to 361,573)); and healthcare cost savings (Intervention 1: $5.8 billion (B) (95% UI: $5.1B to $6.6B); Intervention 2: $3.3B (95% UI: $2.9B to $3.7B)). Intervention costs were estimated as $24M for Intervention 1 and $30M for Intervention 2. Both interventions were dominant, resulting in health gains and cost savings. Increasing the price of alcohol is likely to be cost-effective from an obesity prevention perspective in the Australian context, provided consumers substitute alcoholic beverages with low or no kilojoule alternatives.

SUBMITTER: Robinson E

PROVIDER: S-EPMC7146351 | biostudies-literature | 2020 Feb

REPOSITORIES: biostudies-literature

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Increasing the Price of Alcohol as an Obesity Prevention Measure: The Potential Cost-Effectiveness of Introducing a Uniform Volumetric Tax and a Minimum Floor Price on Alcohol in Australia.

Robinson Ella E Nguyen Phuong P Jiang Heng H Livingston Michael M Ananthapavan Jaithri J Lal Anita A Sacks Gary G

Nutrients 20200226 3

The objective of this study was to estimate, from an obesity prevention perspective, the cost-effectiveness of two potential policies that increase the price of alcohol in Australia: a volumetric tax applied to all alcohol (Intervention 1) and a minimum unit floor price (Intervention 2). Estimated changes in alcoholic drink consumption and corresponding changes in energy intake were calculated using the 2011-12 Australian Health Survey data, published price elasticities, and nutrition informatio ...[more]

PMID: 32110864

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Project description:BackgroundAlcohol use and its burden constitute one of the largest public health challenges in the WHO European Region. Raising alcohol taxes is a cost-effective "best buy" measure to reduce alcohol consumption, but its implementation remains uneven. This paper provides an overview of existing tax structures in 50 countries and subregions of the Region, estimates their proportions of tax on retail prices of beer, wine, and spirits, and quantifies the number of deaths that could be averted annually if these tax shares were raised to a minimum level.MethodsReview of databases and statistical reports on taxes and mean retail prices of alcohol beverages in the Region. Affordability was calculated based on alcohol prices, adjusted for differences in purchasing power. Consumption changes and averted mortality were modelled assuming two scenarios. In Scenario 1, a minimum excise tax share level of 25% of the beverage-specific retail price was assumed for all countries. In Scenario 2, in addition to a minimum excise tax share level of 15% it was assumed that per unit of ethanol minimal retail prices were the same irrespective of alcoholic beverages (equalisation). Sensitivity analyses were conducted for different price elasticities.FindingsAlcohol is very affordable in the Region and alcohol taxes have clearly been under-utilized as a public health measure, constituting on average only 5·7%, 14·0% and 31·3% of the retail prices of wine, beer, and spirits, respectively. Tax shares were higher in the eastern part of the Region compared to the EU, where various countries did not have excise taxes on wine. Annually, the introduction of a minimum tax share of 25% (Scenario 1) could avert 40,033 (95% CI: 38,054-46,097) deaths in the WHO European Region (with 753,454,300 inhabitants older than 15 years of age). If a 15% tax share with equalisation were implemented (Scenario 2), 132,906 (95% CI: (124,691-151,674) deaths could be averted. All sensitivity analyses with different elasticities yielded outcomes close to those of the main analyses.InterpretationSimilar to tobacco taxes, increasing alcohol taxes should be considered to be a health-based measure aimed at saving lives. Many countries have hesitated to apply higher taxes to alcohol, but the present results show a clear health benefit as a result of implementing a minimum tax share.FundingThis work was supported by the National Institute on Alcohol Abuse and Alcoholism (1R01AA028224) and the Canadian Institutes of Health Research, Institute of Neurosciences, and Mental Health and Addiction (SMN-13950).

Project description:One of the key arguments given to oppose the "sin taxes" is that they are regressive in nature and place disproportionately higher cost on the poor thereby reducing their net wealth. The response to a reduction in net wealth attributed to tax can potentially have significant effects through an increase in alcohol purchase by heavy drinkers reinforcing or even offsetting the direct price or substitution effect of these taxes in reducing alcohol consumption. Comparatively little is known empirically about the net wealth effect associated with changes in alcohol tax policy, and this study aims to help fill this gap in the literature. In this study we aim to estimate how the wealth effects of introducing a minimum unit price (MUP) of A$2.00 per standard drink vary over the distribution (quantiles) of alcohol consumers. The data used in this study is a longitudinal panel of 1,395 households' daily alcohol purchases (scanner data) recorded over a full year. Our analysis involves (i) quantile regression to estimate income elasticity over the distribution of consumption, and (ii) using these elasticities to estimate the potential wealth effects of a hypothetical change in alcohol prices from introducing an MUP policy. We control for consumer demographic characteristics, alcohol product prices and prices of close substitutes, and quarterly seasonal effects. We find that the estimated wealth effect from increasing the price of alcohol under a MUP policy is not significant at any point over the distribution of alcohol consumers. The policy increases per capita tax impact by less than A$5.00 per week for light/moderate consumers (50th-80th quantile) and decreases their daily per capita alcohol consumption by less than 0.02 standard drinks. Wealth effects attributable to an MUP policy are likely to be negligible. Substitution effects of the policy dominate the wealth effects in generating key health related outcomes such as reductions in alcohol consumption.

Project description:UK drinkers regularly consume alcohol in excess of guideline limits. One reason for this may be the high availability of low-cost alcoholic beverages. The introduction of a minimum price per unit of alcohol policy has been proposed as a means to reduce UK alcohol consumption. However, there is little in-depth research investigating public attitudes and beliefs regarding a minimum pricing policy. The aim of the present research was to investigate people's attitudes and beliefs toward the introduction of a minimum price per unit of alcohol policy and their views on how the policy could be made acceptable to the general public.Twenty-eight focus groups were conducted to gain in-depth data on attitudes, knowledge, and beliefs regarding the introduction of a minimum price per unit of alcohol policy. Participants (total N = 218) were asked to give their opinions about the policy, its possible outcomes, and how its introduction might be made more acceptable. Transcribed focus-group discussions were analysed for emergent themes using inductive thematic content analysis.Analysis indicated that participants' objections to a minimum price had three main themes: (1) scepticism of minimum pricing as an effective means to reduce harmful alcohol consumption; (2) a dislike of the policy for a number of reasons (e.g., it was perceived to 'punish' the moderate drinker); and (3) concern that the policy might create or exacerbate existing social problems. There was a general perception that the policy was aimed at 'problem' and underage drinkers. Participants expressed some qualified support for the policy but stated that it would only work as part of a wider campaign including other educational elements.There was little evidence to suggest that people would support the introduction of a minimum price per unit of alcohol policy. Scepticism about the effectiveness of the policy is likely to represent the most significant barrier to public support. Findings also suggest that clearer educational messages are needed to dispel misconceptions regarding the effectiveness of the policy and the introduction of the policy as part of a package of government initiatives to address excess alcohol consumption might be the best way to advance support for the policy.

Project description:BACKGROUND:Standardised packaging for factory made (FM) and roll your own (RYO) tobacco was fully implemented in the UK in May 2017. Around the same time, several changes to the tax system were applied (a Minimum Excise Tax (MET) for FM products and tax increases weighted towards RYO products). The tobacco industry claims that standardised packaging will lower prices (a disincentive for quitting) by commoditising the product, yet had itself taken advantage of the previous tax regime to achieve large profits from premium brands while also keeping some products' prices relatively low. Here we evaluate the impact of standardised packaging, the MET and the RYO focussed tax changes on price and industry profitability. METHODS AND FINDINGS:Nielsen electronic point of sale (EPOS) data (May 2015 to April 2018) were used to calculate real (inflation adjusted) monthly price per stick overall, by cigarette type (FM and RYO) and by seven market segments. Trend estimation, using additive mixed models, assessed weighted average price (weighted by volume of sales) and tobacco industry net revenue changes. The beginning and end of the data series were compared in terms of: (a) average monthly price growth, (b) average monthly net revenue growth, and (c) undershifting and overshifting patterns after tax changes. FM and RYO real prices changed little over the 3-year period-overall prices rose by about 1p per stick. There was no evidence of commoditisation with prices of all FM segments (but not RYO) rising faster after the implementation of standardised packaging than immediately beforehand. The prices of the cheapest FM brands rose with the implementation of the MET. RYO price increases did not close the gap to FM pricing levels despite RYO focussed tax increases. Tax changes following the implementation of standardised packaging and the MET were more widely and quickly passed on to smokers in the form of higher prices than the tax change pre-implementation. The main limitations are first that because we do not know the exact mechanism by which Nielsen scales up sample data to provide UK estimates, we could only use data for a set three year period during which the same adjustments are made. Second, the tax and standardised packaging events were sometimes too close in time to separate their consequences statistically. Third, tobacco prices may also be affected by external factors such as changes in smokers' disposable income or availability of electronic nicotine delivery systems. CONCLUSIONS:There was no long-term lowering of tobacco prices after the implementation of standardised packaging as predicted by the industry. The introduction of the MET was successful in increasing the price of the cheapest FM cigarettes and narrowing the price gap between FM brands. The RYO tax increases were, however, insufficient to narrow the price gap between RYO and FM. Overall, undershifting became less extensive indicating that tobacco industry manipulation of the tax system which had previously kept cheap products available had declined. This suggests that standardised packaging and a MET will likely contribute to further declines in UK tobacco use.

Dataset Information

Increasing the Price of Alcohol as an Obesity Prevention Measure: The Potential Cost-Effectiveness of Introducing a Uniform Volumetric Tax and a Minimum Floor Price on Alcohol in Australia.

Publications

Increasing the Price of Alcohol as an Obesity Prevention Measure: The Potential Cost-Effectiveness of Introducing a Uniform Volumetric Tax and a Minimum Floor Price on Alcohol in Australia.

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