Minimum (floor) Price for Alcohol Draft Report released

Promoting a Healthy Australia (The Australian National Preventive Health Agency) has today released its Draft Report on Exploring the Public Interest Case for a Minimum (floor) Price for Alcohol.

With 1 in 5 Australians consuming alcohol at levels that put them at risk of long term harm, and the costs of alcohol harm across the country into the billions of dollars annually, the Agency was tasked by the Commonwealth Government to examine and advise on the public interest case for a minimum (floor) price for alcohol in Australia.

The Agency’s CEO Louise Sylvan says, “the release of this Draft Report is part of the second stage of a consultative and transparent review process undertaken by the Agency on the issue of minimum (floor) pricing for alcohol and stakeholders now have the opportunity to provide further evidence and information with the benefit of our draft findings in hand.”

The key recommendation of this draft report is that a minimum (floor) price for alcohol should not be introduced nationally at this time. Use of such a measure should continue to be considered, where it can be effective, in more local circumstances in Australia.

“While the available evidence shows that, in general, binge and heavier drinkers purchase cheaper alcohol than light and moderate drinkers, modelling the full impact of various minimum price points on Australian consumers switching behaviour at a national level is not currently feasible.”

“Further, Australia has private sector alcohol distribution and retail systems, so unlike other countries that have government controlled alcohol distribution systems which are successfully using minimum pricing strategies to reduce harmful alcohol use, a price increase would flow to private sector suppliers and retailers potentially creating ‘monopoly rents.”

“Our Agency advises that this would significantly reduce the possible benefits to Australians of such a policy at a national level,” Ms Sylvan said.

The Agency commenced its review on minimum (floor) pricing of alcohol in June 2012 with the release of an Issues Paper that examined the evidence around the harms associated with cheap alcohol, the associated consumption patterns and the different mechanisms available to affect this consumption.

The Issues Paper sought submissions from interested parties on this issue. Issues Paper Submissions

The majority of submissions put to the Agency argued for alcohol-related taxation reform. As alcohol taxation is primarily a way to address community costs caused by alcohol misuse, most of those in favour of reform proposed that taxes should be volumetric – ie based on the alcohol content of the beverage.

Wine however is taxed on value – the cheaper the wine, the less the tax, irrespective of the alcohol content. Preferential treatment of wine favours production of cheaper wines and as such may well be contributing to social and health harms.

Based on public health considerations, the Agency finds that the current operation of the Wine Equalisation Tax is of concern and requires reappraisal.

The Agency notes the comment of the Henry Tax Review that, “a common alcohol tax base would introduce a ‘floor price’.”

The Agency also strongly encourages, consistent with the National Alcohol Strategy, that State and Territory governments continue, or initiate, the collection of wholesale sales data in order to enable and improve the essential research and analysis required to inform evidence-based public policy decisions.

Draft Report Exploring the Public Interest Case for a Minimum (floor) Price for Alcohol (PDF 4831 KB)

Executive summary of Draft Report Exploring the Public Interest Case for a Minimum (floor) Price for Alcohol (PDF 443 KB)

Background

The Australian National Preventive Health Agency (est 2011) advises Commonwealth and State and Territory Governments on preventive health matters.

The Commonwealth Government tasked the Agency to advise it on the public interest case for a minimum (floor) price of alcohol.

Report Process

The release of this draft report is the second stage of the Agency’s minimum (floor) price of alcohol review process.

Comments on the draft report are now sought with submissions open until end November 2012.

Once those submissions are received a final report and advice on minimum (floor) pricing will be prepared and provided to the Minister for Mental Health and Ageing, the Hon Mark Butler.

Submissions details

Submission details are available on the Draft Report Exploring the Public Interest Case for a Minimum (floor) Price for Alcohol page.

Page currency, Latest update: 01 November, 2012

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