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Floor price for booze good as taxes, study
Raising the minimum price for alcohol is as effective as raising taxes at reducing the harms caused by alcohol consumption, according to a new UK study.

Dr Robin Purshouse from the University of Sheffield and colleagues report their findings today in The Lancet.

Purshouse and colleagues modelled the impact of 18 different pricing policies on changes in consumption and the associated healthcare costs, using UK data.

"General price increases were effective for reduction of consumption, health-care costs, and health-related quality of life losses in all population subgroups," they write.

"Minimum pricing policies can maintain this level of effectiveness for harmful drinkers while reducing effects on consumer spending for moderate drinkers."

Alcohol consumption is estimated to cost Australia A$10.83 billion in lost productivity, health care, road accidents and crime.
No argument

Australian experts say the findings of the study are relevant to Australia.

Dr Wayne Hall of the University of Queensland Centre for Clinical Research says there is "no argument" that increasing the price of alcohol reduces consumption.

"That's the finding of every study that's ever been done on modelling the effect of raising price," he says.

Hall says the new study supports the findings of similar Australian studies.

But, while most studies have looked at the effect of a "volumetric tax", which increases with the alcohol content of beverages, another approach is to raise the minimum price.

Hall says the study by Purshouse and colleagues shows raising the minimum price for alcohol has the roughly equivalent effect of raising taxes.

He says, the argument in favour of setting a "floor price" is that it targets those who drink the most.

"The heavier drinkers are typically young adults and they tend to prefer the cheapest beverages available," he says, adding some cask wine is cheaper than bottled water.

"So if you were to raise the minimum price and make the cheaper beverages more expensive, you'd have a bigger impact on their consumption than you might if you raised taxes across the board."

Gino Vambuca of the Australian National Council on Drugs, which is the main advisory body to government on drug policy, agrees pricing and taxation is the most effective way to reduce alcohol consumption.

But he says producers who want alcohol treated as any other commodity may regard setting a floor price as an anti-competitive policy.

Australia is currently awaiting the government's response to a review of taxation and a report on preventative health.

"That's where the opportunity is for us," says Vambuca.

His organisation calls for a volumetric tax, disincentives for products that can have a high potential for harm, and incentives for low-alcohol products.

"There should be a bigger price disparity between low-alcohol beer and full-strength beer," says Vambuca.

He says taxes should be spent on domestic violence shelters, drug and alcohol treatment centres and road trauma wards.

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