So my first new entry is about the government’s sudden, populist “alcopop tax.” To refresh the memory – this was a 70% increase in duty, announced without notice in April 2008.
As an aside, the term alcopop itself seems to have been introduced by the government as a term for premixed spirits. If you look at Google terms search you will find the search demand for the term only shoots up after the government declares war on “alcopops”. And this in turn was after the UK Labor government had introduced the same term.
Back to the tax increase; this has been dressed up as a public health measure, however the reality is that it has been far more effective as a public distractor than as effective public policy. There is no evidence that it could possibly work. Available data shows that problem drinking is not (and never has been) linked to spirits – or even alcopops. In fact, there is evidence to suggest that most problem drinking uses low cost beer and wine (beer and wine have lower tax rates than spirits and alcopops). There was no consultation prior to the introduction, and the government considered no industry evidence on the likely impact of the duty hike.
Supporting the theory that the tax is faulty policy is the fact that all the consumption which has dropped off from alcopops has been picked up by either spirits, beer or wine!
The Distilled Spirits industry body has a summary of facts here and although they are obviously biased in their perspective, the data strongly suggest they are right – and there has been no response from the government other than the general appeals to emotion. Where’s the data, guys?
A quick example. The term alcopop is clearly designed to imply a white-spirit base with a soft-drink type flavour. And the government has been quite clear about the target of the policy – binge drinking youngsters, largely female. However the actual usage data show that around 75% of drinks subject to the alcopop tax are drunk by MEN. And the institute for health and welfare AIHW, in their senate submission, notes: “given the stable prevalence of risky drinking, and the lack of any clear trend regarding preferences for RTDs, the increased availability of RTDs does not appear to have directly contributed to an increase in risky alcohol consumption.”
Now the government is threatening spirits companies making beer products which look and taste like alcopops, such as Smirnoff platinum. Smirnoff platinum is imported by Diageo Australia from their USA subsidiary.
This is getting ridiculous. Alcohol is alcohol. A drink is a drink. It is time to tax all alcohol with the same duty rate.
Interest disclaimer – I have clients in the alcohol industy. But so what – policy should be driven by data, not knee-jerk populist decisions made in a vacuum and without reference to facts.