The effect of alcohol tax changes on retail prices: how do on-trade alcohol retailers pass through tax changes to consumers?

Estimating the effect of transitioning to a strength-based alcohol tax system on alcohol consumption and health outcomes: a modelling study of tax reform in England

BACKGROUND

Increasing the amount of alcohol taxation is among the most effective measures for addressing the rising global burden of alcohol harm. However, less is known about the effect of changing alcohol tax structures. Substantial reforms to UK alcohol taxation structures enacted in August, 2023, mean that all alcohol is taxed based on its ethanol content, beers and ciders sold in on-trade premises (eg, public houses) are taxed at a reduced rate (hereafter called draught relief), and beer and particularly cider remain taxed at lower rates than other alcohol of equivalent strength. We aimed to model the effect of these reforms on alcohol consumption and health and economic outcomes, and the effects of hypothetical alternative scenarios.

METHODS

The Sheffield Tobacco and Alcohol Policy Model was used to estimate policy effects on alcohol consumption. The model is an individual-based microsimulation that uses data from the Health Survey for England, Living Costs and Food Survey, Hospital Episode Statistics, and the Office for National Statistics. Spending and revenues to retailers and the Government were estimated cumulatively for a 5-year period post-intervention. Policy effects on all-cause deaths, years of life lost, hospital admissions, and admissions costs were estimated cumulatively for a 20-year period post-intervention.

FINDINGS

The reform was estimated to decrease mean weekly alcohol consumption per drinker by less than 0·05 (-0·34%) units (1 unit=8 g/10 mL ethanol), and prevent 2307 deaths and 11 510 hospital admissions during 20 years compared with no policy change. Removing draught relief was estimated to prevent 1441 further deaths and 14 247 further admissions. Hypothetical scenarios showed that removing draught relief would only slightly improve public health outcomes, and increasing tax rates for beer and ciders to match other drinks of equivalent strength would reduce consumption by a further 2·5 units per week (-17%) and deaths by approximately 74 465.

INTERPRETATION

Alcohol tax structures based on alcohol strength enable tax policy to improve public health in a targeted way. However, the UK reforms are unlikely to substantially improve health outcomes as they do not raise taxes overall. Raising tax rates for the lowest taxed beer and ciders, which are favoured by those who consume harmful amounts of alcohol, could achieve substantially greater public health benefits and reduce health inequalities.

FUNDING

National Institute for Health and Care Research and UK Prevention Research Partnership.

Options for modifying UK alcohol and tobacco tax: A rapid scoping review of the evidence over the period 1997-2018

Background

Increased taxation is recognised worldwide as one of the most effective interventions for decreasing tobacco and harmful alcohol use, with many variations of policy options available. This rapid scoping review was part of a NIHR-funded project ('SYNTAX' 16/105/26) and was undertaken during 2018 to inform interviews to be conducted with UK public health stakeholders with expertise in alcohol and tobacco pricing policy.

Methods

Objectives: To synthesise evidence and debates on current and potential alcohol and tobacco taxation options for the UK, and report on the underlying objectives, evidence of effects and mediating factors. Eligibility criteria: Peer-reviewed and grey literature; published 1997-2018; English language; UK-focused; include taxation interventions for alcohol, tobacco, or both. Sources of evidence: PubMed, Scopus, Cochrane Library, Google, stakeholder and colleague recommendations.

Charting methods

Excel spreadsheet structured using PICO framework, recording source characteristics and content.

Results

Ninety-one sources qualified for inclusion: 49 alcohol, 36 tobacco, 6 both. Analysis identified four policy themes: changes to excise duty within existing tax structures, structural reforms, industry measures, and hypothecation of tax revenue for public benefits. For alcohol, policy options focused on raising the price of cheap, high-strength alcohol. For tobacco, policy options focused on raising the price of all tobacco products, especially the cheapest products, which are hand-rolling tobacco. For alcohol and tobacco, there were options such as levies that take money from the industries to help reduce the societal costs of their products. Due to the perceived social and economic importance of alcohol in contrast to tobacco, policy options also discussed supporting pubs and small breweries.

Conclusions

This review has identified a set of tax policy options for tobacco and alcohol, their objectives, evidence of effects and related mediating factors. The differences between alcohol and tobacco tax policy options and debates suggest an opportunity for cross-substance policy learning.

Reducing alcohol use through alcohol control policies in the general population and population subgroups: a systematic review and meta-analysis

We estimate the effects of alcohol taxation, minimum unit pricing (MUP), and restricted temporal availability on overall alcohol consumption and review their differential impact across sociodemographic groups. Web of Science, Medline, PsycInfo, Embase, and EconLit were searched on 08/12/2022 and 09/26/2022 for studies on newly introduced or changed alcohol policies published between 2000 and 2022 (Prospero registration: CRD42022339791). We combined data using random-effects meta-analyses. Risk of bias was assessed using the Newcastle-Ottawa Scale. Of 1887 reports, 36 were eligible. Doubling alcohol taxes or introducing MUP (Int$ 0.90/10 g of pure alcohol) reduced consumption by 10% (for taxation: 95% prediction intervals [PI]: -18.5%, -1.2%; for MUP: 95% PI: -28.2%, 5.8%), restricting alcohol sales by one day a week reduced consumption by 3.6% (95% PI: -7.2%, -0.1%). Substantial between-study heterogeneity contributes to high levels of uncertainty and must be considered in interpretation. Pricing policies resulted in greater consumption changes among low-income alcohol users, while results were inconclusive for other socioeconomic indicators, gender, and racial and ethnic groups. Research is needed on the differential impact of alcohol policies, particularly for groups bearing a disproportionate alcohol-attributable health burden.

Funding

Research reported in this publication was supported by the National Institute on Alcohol Abuse and Alcoholism of the National Institutes of Health under Award Number R01AA028009.

Evaluating the impact of alcohol minimum unit pricing on deaths and hospitalisations in Scotland: a controlled interrupted time series study

BACKGROUND

Since May 1, 2018, every alcoholic drink sold in Scotland has had minimum unit pricing (MUP) of £0·50 per unit. Previous studies have indicated that the introduction of this policy reduced alcohol sales by 3%. We aimed to assess whether this has led to reductions in alcohol-attributable deaths and hospitalisations.

METHODS

Study outcomes, wholly attributable to alcohol consumption, were defined using routinely collected data on deaths and hospitalisations. Controlled interrupted time series regression was used to assess the legislation's impact in Scotland, and any effect modification across demographic and socioeconomic deprivation groups. The pre-intervention time series ran from Jan 1, 2012, to April 30, 2018, and for 32 months after the policy was implemented (until Dec 31, 2020). Data from England, a part of the UK where the intervention was not implemented, were used to form a control group.

FINDINGS

MUP in Scotland was associated with a significant 13·4% reduction (95% CI -18·4 to -8·3; p=0·0004) in deaths wholly attributable to alcohol consumption. Hospitalisations wholly attributable to alcohol consumption decreased by 4·1% (-8·3 to 0·3; p=0·064). Effects were driven by significant improvements in chronic outcomes, particularly alcoholic liver disease. Furthermore, MUP legislation was associated with a reduction in deaths and hospitalisations wholly attributable to alcohol consumption in the four most socioeconomically deprived deciles in Scotland.

INTERPRETATION

The implementation of MUP legislation was associated with significant reductions in deaths, and reductions in hospitalisations, wholly attributable to alcohol consumption. The greatest improvements were in the four most socioeconomically deprived deciles, indicating that the policy is positively tackling deprivation-based inequalities in alcohol-attributable health harm.

FUNDING

Scottish Government.

Impact of minimum unit pricing on alcohol-related hospital outcomes: systematic review

OBJECTIVE

To determine the impact of minimum unit pricing (MUP) on the primary outcome of alcohol-related hospitalisation, and secondary outcomes of length of stay, hospital mortality and alcohol-related liver disease in hospital.

DESIGN

Databases MEDLINE, Embase, Scopus, APA Psycinfo, CINAHL Plus and Cochrane Reviews were searched from 1 January 2011 to 11 November 2022. Inclusion criteria were studies evaluating the impact of minimum pricing policies, and we excluded non-minimum pricing policies or studies without alcohol-related hospital outcomes. The Effective Public Health Practice Project tool was used to assess risk of bias, and the Bradford Hill Criteria were used to infer causality for outcome measures.

SETTING

MUP sets a legally required floor price per unit of alcohol and is estimated to reduce alcohol-attributable healthcare burden.

PARTICIPANT

All studies meeting inclusion criteria from any country INTERVENTION: Minimum pricing policy of alcohol PRIMARY AND SECONDARY OUTCOME MEASURES: RESULTS: 22 studies met inclusion criteria; 6 natural experiments and 16 modelling studies. Countries included Australia, Canada, England, Northern Ireland, Ireland, Scotland, South Africa and Wales. Modelling studies estimated that MUP could reduce alcohol-related admissions by 3%-10% annually and the majority of real-world studies demonstrated that acute alcohol-related admissions responded immediately and reduced by 2%-9%, and chronic alcohol-related admissions lagged by 2-3 years and reduced by 4%-9% annually. Minimum pricing could target the heaviest consumers from the most deprived groups who tend to be at greatest risk of alcohol harms, and in so doing has the potential to reduce health inequalities. Using the Bradford Hill Criteria, we inferred a 'moderate-to-strong' causal link that MUP could reduce alcohol-related hospitalisation.

CONCLUSIONS

Natural studies were consistent with minimum pricing modelling studies and showed that this policy could reduce alcohol-related hospitalisation and health inequalities.

PROSPERO REGISTRATION NUMBER

CRD42021274023.