Effects of Different Alcohol Taxation and Price Policies on Health Inequalities

uk taxation and alcoholSo before we discuss this new research looking at and exploring the estimated effects of different alcohol taxation and price policies on health inequalities from a mathematical modelling study point of view I thought it beneficial to provide some context.  The graphs to the left show the tax receipts for the UK govt in 2015.  As you can see alcohol duty plays an important role in raising taxes for the govt and makes up 1/6th of the minor tax take, not so minor after all at £10.5 billion.

Here’s the study abstract:


While evidence that alcohol pricing policies reduce alcohol-related health harm is robust, and alcohol taxation increases are a WHO “best buy” intervention, there is a lack of research comparing the scale and distribution across society of health impacts arising from alternative tax and price policy options. The aim of this study is to test whether four common alcohol taxation and pricing strategies differ in their impact on health inequalities.

Methods and Findings

An econometric epidemiological model was built with England 2014/2015 as the setting. Four pricing strategies implemented on top of the current tax were equalised to give the same 4.3% population-wide reduction in total alcohol-related mortality: current tax increase, a 13.4% all-product duty increase under the current UK system; a value-based tax, a 4.0% ad valorem tax based on product price; a strength-based tax, a volumetric tax of £0.22 per UK alcohol unit (= 8 g of ethanol); and minimum unit pricing, a minimum price threshold of £0.50 per unit, below which alcohol cannot be sold. Model inputs were calculated by combining data from representative household surveys on alcohol purchasing and consumption, administrative and healthcare data on 43 alcohol-attributable diseases, and published price elasticities and relative risk functions. Outcomes were annual per capita consumption, consumer spending, and alcohol-related deaths. Uncertainty was assessed via partial probabilistic sensitivity analysis (PSA) and scenario analysis.

The pricing strategies differ as to how effects are distributed across the population, and, from a public health perspective, heavy drinkers in routine/manual occupations are a key group as they are at greatest risk of health harm from their drinking. Strength-based taxation and minimum unit pricing would have greater effects on mortality among drinkers in routine/manual occupations (particularly for heavy drinkers, where the estimated policy effects on mortality rates are as follows: current tax increase, −3.2%; value-based tax, −2.9%; strength-based tax, −6.1%; minimum unit pricing, −7.8%) and lesser impacts among drinkers in professional/managerial occupations (for heavy drinkers: current tax increase, −1.3%; value-based tax, −1.4%; strength-based tax, +0.2%; minimum unit pricing, +0.8%). Results from the PSA give slightly greater mean effects for both the routine/manual (current tax increase, −3.6% [95% uncertainty interval (UI) −6.1%, −0.6%]; value-based tax, −3.3% [UI −5.1%, −1.7%]; strength-based tax, −7.5% [UI −13.7%, −3.9%]; minimum unit pricing, −10.3% [UI −10.3%, −7.0%]) and professional/managerial occupation groups (current tax increase, −1.8% [UI −4.7%, +1.6%]; value-based tax, −1.9% [UI −3.6%, +0.4%]; strength-based tax, −0.8% [UI −6.9%, +4.0%]; minimum unit pricing, −0.7% [UI −5.6%, +3.6%]). Impacts of price changes on moderate drinkers were small regardless of income or socioeconomic group. Analysis of uncertainty shows that the relative effectiveness of the four policies is fairly stable, although uncertainty in the absolute scale of effects exists. Volumetric taxation and minimum unit pricing consistently outperform increasing the current tax or adding an ad valorem tax in terms of reducing mortality among the heaviest drinkers and reducing alcohol-related health inequalities (e.g., in the routine/manual occupation group, volumetric taxation reduces deaths more than increasing the current tax in 26 out of 30 probabilistic runs, minimum unit pricing reduces deaths more than volumetric tax in 21 out of 30 runs, and minimum unit pricing reduces deaths more than increasing the current tax in 30 out of 30 runs). Study limitations include reducing model complexity by not considering a largely ineffective ban on below-tax alcohol sales, special duty rates covering only small shares of the market, and the impact of tax fraud or retailer non-compliance with minimum unit prices.


Our model estimates that, compared to tax increases under the current system or introducing taxation based on product value, alcohol-content-based taxation or minimum unit pricing would lead to larger reductions in health inequalities across income groups. We also estimate that alcohol-content-based taxation and minimum unit pricing would have the largest impact on harmful drinking, with minimal effects on those drinking in moderation.

To read the full research article go here.

Bearing in mind that I featured a great piece only recently looking at alcohol and health inequality once again the case for minimum unit pricing is robust and these findings conclude that they would not impact on those who drink moderately which has been the biggest and loudest reason given not to implement to date.

And once again Scotland lead the way in collaboration with the University of Sheffield:

Model-based appraisal of the comparative impact of Minimum Unit Pricing and taxation policies in Scotland (PDF)
To achieve the same reduction in alcohol-related deaths among hazardous and harmful
drinkers as a 50p minimum unit price, a 28% increase in alcohol taxation would be required.

But no we seem to be heading in the opposite direction yet again!

The HMRC Alcohol Strategy Modernising alcohol taxes to tackle fraud and reduce burdens on alcohol businesses (PDF)

Of course we need to REDUCE the tax burden on alcohol businesses instead 🙁

2 thoughts on “Effects of Different Alcohol Taxation and Price Policies on Health Inequalities

  1. The alcohol lobbyists must be stronger than the tobacco ones were!
    Our taxes on liquor in our state ranges all over the place, depending on city.
    In Minneapolis they run over 16%. But In rural areas, it’s only 9.8%
    I can’t find any reports here on tax versus increasing prices on drinking habits here in MN.

    1. I think they learned a great deal from each other Wendy which concentrated & channeled their approach and targeting 🙁 xx

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