The feasibility of price control in reducing alcoholism

Alcohol consumption is increasing in most western European countries and leading to higher levels of several alcohol-related problems. It is therefore a legitimate public health endeavour of the preventive type to try to halt this growth and if possible bring about a reduction in drinking. Prominent among the measures currently being promoted in social medicine circles to achieve this goal is raising the price of alcoholic beverages through tax increase of sufficient magnitude to ensure that drinking becomes more expensive in real terms. This paper explores some of the factors that should be taken into account in assessing the potential contribution that could be made by taxation to the control of alcohol consumption, using the Irish experience as an example. It is concluded that even fairly substantial price increases would not have a major impact on alcohol consumption, which has tended to grow rapidly as real incomes have grown and does not seem to be very sensitive to price. Moreover, the price of drink is reflected immediately in the cost of living, and significant increases in the real tax on alcohol are therefore not an attractive option politically. The reasons why Irish consumers should be so insensitive to the price of drinking, and so willing to devote additional real purchasing power to buying alcoholic beverages, is at the root of the problem posed by alcohol in our society. The paper also reviews the trends in prices between beer and spirits and the scope for price manipulation between beverage types in the interest of public health