Tuesday 21 August 2012

Australia's alcopop tax folly: A lesson in unintended consequences

Reading this little post reminded me of Australia's doomed attempt to stop binge-drinking by taxing the hell out of alcopops. It serves as a classic example of big promises from public health hucksters being followed by abject failure. With the UK seemingly set on minimum pricing and Australia set on... well, literally any idea the wowsers come up with, it is a good time to reflect on the woeful track record of the neo-prohibitionists.

At the end of April 2008, Australia increased the tax on alcopops by 70 per cent. A familiar cast of characters claimed that there was "overwhelming evidence" that price influences consumption (as if that was not Econ 101) and that a high tax would slash rates of teen binge-drinking. Foremost amongst them was that pitiful simpleton Nicola Roxon in her days before she fell for the plain packaging nonsense...

Health minister Nicola Roxon said: "We've got research showing that young people are price sensitive and, if that means this is a deterrent, then this will be a really successful measure."

There were plenty of speculation dressed up as fact from the mouths of professional campaigners:

John Rogerson, the Australian Drug Foundation chief executive, said: "It's going to help reduce binge drinking, it's going to reduce violence and it's going to reduce damage."

Within days, the British Conservative Party decided to ride the band-wagon, with the usual sock puppet charity in tow.

A 50p tax would be imposed on alcopops such as Bacardi Breezers by a Conservative government as part of a drive to cut the consumption of "problematic alcoholic drinks" by half...

Don Shenker, director of policy at Alcohol Concern, said the drinks targeted were some of the most problematic, adding: "There's no doubt that measures of this kind will put a dent in teenagers' ability to drink these products excessively."

But it wasn't long before the unintended consequences appeared Down Under...

Alcopop thefts soar since tax jump

Vel Tanaskoski, the co-owner of Glenfield Cellars, calculated that thefts of individual alcopops had run into several cases over the past few days, not including some cans that were recovered from individuals as they tried to leave the store.

"As soon as the price went up the stealing went up dramatically," he said. "It's pointless to report it to the police. It's like the law's on their side."

And, in a sign of things to come...

Rex Newaz, of Prestons Village Liquor, said he too had noticed a sudden change in his younger customers' buying patterns.

"The [ready-to-drink products] have slowed down a bit, but they're just buying more spirits," he said.

So it proved...

Alcopop sales plunge, spirits soar in tax wake

SALES of pre-mixed alcoholic drinks have plunged dramatically in the wake of the Federal Government's 70 per cent tax hike on the popular drinks.

The peak industry body also says there has been a "staggering" 20 per cent jump in the sales of full-strength spirits such as vodka, gin, and whisky over the same period.

This has been confirmed in subsequent reports, like this...

THE contentious tax on alcopops has failed to influence teenage drinkers and done nothing to curb binge drinking, according to the first survey of underage alcohol use since the federal government introduced the excise hike.

A Health Department survey found that "risky underage drinking continued unabated".

"These figures are an absolute disaster," said Professor John Toumbourou, who holds the chair in health psychology at Deakin University, commenting on girls' risky drinking.

And this...

Young binge drinkers have simply switched to cheaper booze to beat the Federal Government's controversial "alcopop" tax.

New research shows 15 to 29-year-olds have dodged the 70 per cent tax on popular pre-mixed drinks by changing their drink of choice.

The University of Queensland study found no significant reduction in binge drinking-related hospital admissions since the tax was introduced in 2008.

And—bearing in mind that Nicola Roxon had previously opined that, according to ABC News, "the large increase in tax on pre-mixed alcoholic drinks will not force teenagers onto stronger drinks or drugs"—the icing on the cake was this...

Alcohol price spike fuels switch to ecstasy

A NEW phenomenon of young people "switching" to the increasingly cheap party drug ecstasy has been fuelled by rising alcohol prices, according to drug researchers, nightclub owners and the people themselves - the nightclubbers.

The rise in alcohol prices was in part fed by federal Labor's 2009 alcopops tax. "It is cheaper and convenient to use pills," said Professor Jake Najman, director of the University of Queensland's Alcohol and Drug Research and Education Centre.

This is a text-book example of government folly that could have been prevented had anyone in the government been in touch with the real world. It is a story as old as the hills and never does it change whether the target is drink, drugs or cigarettes. If these imbecile politicians moved beyond Econ 101 they might come across such concepts as price elasticity. If they had any knowledge of history, they would know that people switch from one stimulant to another. If they had any understanding of human beings, they would know that the desire for pleasure and intoxication is innate.

This could have been a lesson learnt. The hapless politicians and wide-eyed reformers could have realised that increasing the price of alcohol has consequences which rarely match their intentions. But what did they come up with instead?

Call for minimum alcohol price as alcopop tax fails to stop Australia's young binge drinkers


Curmudgeon said...

I seem to remember around the same time the UK increased the tax on alcopops by reclassifying them as "made-wines", with similar consequences. They're actually now pretty expensive compared with mixing your own.

That's why Glen's Vodka is such a strong seller, of course ;-)

Ivan D said...

I remember Don Shenker. Wasn't he the BBC news favourite? The "independent" voice who could not stop spouting rubbish about alcohol right up to the moment the DoH stopped paying him to do so?

I find the dishonesty and misplaced arrogance of these people depressing but it is their ongoing stupidity that is truly soul destroying.

GreatScot said...

They are arrogant and they are dishonest but they are not stupid and neither are the politicians. They know the consequences but they don't care or they are even part of the plan. Try sending the above to your MP for comment and see what boilerplate response you get. Ask him to support prohibition and see what he says. Incrementalisation is always the goal, keeps the money flowing. Kids swap from alcopops to traditional spirits, increase the price of spirits too. This cycle of reprehensible rent seeking and sanctioned extortion will continue until government revenues fall drastically.

James Burr said...

I didn't even need to read the end to work out that far from learning their lesson their response would be..... more of the same!

Anonymous said...

Human nature being what it is, what we can expect, as a result of the leapfrogging which the Zealots have induced (deliberately) is 'brew your own'. There is no other possible consequence. Despite the horror stories which the 'authorities' cause to be published in newspapers, distilling alcohol is very easy, provided that one is in no hurry and does not wish to produce massive quantities.

Another interesting point is that tobacco is not the only substance which can be smoked, but it is also true that tobacco plants can be grown, without extra heating, inside homes and buildings. There is no problem.

Everything that the Government does drives OBJECTION. And OBJECTION takes a lot of different forms. When Government becomes detached from the people (which it has, as a result of 'parachuting in' of foreigners into constituencies, then OBJECTION becomes more and more difficult for these people to couteract.

I hope that I live long enough to see the new political system (even though I do not know what its shape might be!). What is clear to me is that PROPAGANDA must be eradicated.