Alcohol Concern and the Alcohol Health Alliance have called for an overhaul of the alcohol duty system to deter heavy drinking and encourage consumers to switch to lower strength beers, ciders and wines.
In a submission to the Treasury and Home Office, who are reviewing alcohol tax and price, the campaign groups argue that the current alcohol duty system does nothing to incentivise consumption of lower strength alcohol products and propose a new approach which would charge higher duty rates, particularly on beers and ciders above 3.7% ABV. In the new model, supported by the Royal College of Physicians and the British Liver Trust, cider would be charged at the same duty rate as beer, it is currently around half the beer rate and afforded greater protection for ‘historical reasons’, argue the campaigners.
The proposed model would not increase any additional duty on ‘lower’ beer and cider products under 3.7% ABV% but would add a 10% increase in duty on beers and ciders between 3.7 and 5.2% ABV. A 2003 study by the Treasury found that a 10% increase in duty would reduce alcohol related mortality by 28% for males and 37% for females. Beers and ciders above 5.2% ABV would be hit by a further 10% rise in duty under the proposed model to deter producers from making high strength drinks that are often sold as loss leaders by the major supermarkets. A 7.5% ABV cider currently retailing for £1.96 would therefore go up to £3.50 if the full duty increase was passed on. Wine would also be ABV linked and be subject to revised tax bands. Spirits and Ready to Drink (RTD) products are already ABV linked and the range of strengths is relatively narrow so an increase of 10% would be suitable. The campaigners argue to ensure duty rates are passed onto consumers a ban on selling alcohol below a minimum price is also needed
Alcohol Concern Chief Executive Don Shenker said "The current alcohol duty regime actually encourages irresponsible drinking, with strong ciders being taxed at a quarter of the equivalent rate for beer. Higher and more consistent alcohol taxes for stronger products would deter producers and consumers who would switch to lower strength beers, ciders and wines. The additional revenue raised is urgently needed to support dependent drinkers who are now growing in number. However, to ensure the full duty rate is reflected in the price, retailers would have to abide by a minimum price too."
Professor Ian Gilmore, ex-President of the Royal College of Physicians said "The current alcohol tax system has developed piecemeal and lacks consistency. Alcohol should be taxed on the basis of how much alcohol a product contains, and the government’s plan to ban below cost selling (if cost is based on the sum of duty + VAT) will miss most of the current heavy discounting that is fuelling the damage to the nation’s health. We do not underestimate the difficulty for government in setting a rational framework around the pricing of alcoholic beverages but the approach should include both a review of the tax structure and the ability to determine a minimum unit price."
In a related move, several of the country’s major alcohol treatment organisations have called for a significant rise in alcohol duty to fund treatment for dependent drinkers to stop drinking. Chief executives from Turning Point, Addaction and others, alongside the national campaigning charity Alcohol Concern have written to ‘The Daily Telegraph’ to call for higher taxes to deter drinkers from becoming dependent. They also argue that the growing numbers of dependent drinkers, a 24% rise in the past 5 years, has not been matched by public funding to support them to stop drinking. The alcohol chiefs say that "For the sake of the children, families and communities that suffer from alcohol abuse, the increasing affordability of alcohol must be halted and more funding via taxation should be ring-fenced to support the victims of alcohol abuse"
Monica Wilson, Director of Information and Education at the British Liver Trust, says: ‘We have long called for a minimum price to be introduced to tackle alcohol harm. Even though we are encouraged that there is now the recognition from the government that the price of alcohol directly correlates to consumption, we need to see effective action that reduces the amount that people drink, without unnecessarily targeting the moderate drinker. This potential approach would ensure duty is attributed to ABV for all types of alcoholic drinks so that it is the harmful alcohol (not the drink) which is targeted. With 44 deaths a day attributable to liver disease and these figures increasing year on year, the government simply cannot afford to not take action."
Alcohol Concern