British Drug and Alcohol Policy: III. What is Minimum Pricing of Alcohol and Will it Reduce Problem Drinking?

Although it is often asserted that “alcoholics will do anything to get their drink”, there is overwhelming evidence that even the heaviest drinking segment of the population responds to increases in price (A scholarly and readable summary of the scientific literature in this area was recently produced by the estimable Phil Cook). People who are physically dependent on alcohol show less elasticity in their demand than the rest of the population, but still nonetheless drink less than they would otherwise when alcohol is more expensive.

The converse is also true, as the U.K. experience shows: Very cheap booze will produce a rise in excessive drinking. Many UK supermarkets sell alcoholic beverages below cost as a loss leader, and licensed outlets often sell very cheap drinks during promotions, e.g., happy hour or ladies’ night (“It takes some seed to attract a flock of birds” as a landlord on the Strand explained it to me).

Many U.S. public health advocates therefore consider raising alcohol excise taxes the best way to reduce problem drinking and the health and social damage it does. In a number of the Commonwealth Countries, including the U.K., an alternative approach known as minimum pricing is gaining traction. Minimum pricing is based on a system of standardized “units” of pure ethanol (in the UK it’s 10ml or 8g) such that larger volumes of low alcohol content beverages are equal to small volumes of high alcohol content beverages (i.e., a third of a pint of 5-6% beer = half a glass of 12% wine = one measure of 40% whisky).

Because heavy drinkers pay far less (about 80% less, according to research by Bill Kerr and Tom Greenfield of the Alcohol Research Group) per unit of alcohol consumed than does the rest of the population, setting a minimum price is intended to concentrate the consumption-reducing effects of increased price on that subset of the population whose alcohol use poses the greatest risk to themselves and others. Minimum pricing also has a characteristic that makes it more politically palatable: It’s not a tax. The merchants keep all the money from the sale of minimum priced alcohol, and hence are less resistant than they would be to taxes that went to the government (Case in point: Tesco has endorsed minimum pricing ).

You might wonder why the U.K. government is considering minimum pricing instead of taking the simpler step of banning below-cost sales of alcohol. A number of politicians have proposed this, but it is probably not feasible. It is very hard for regulators to determine the true cost of production, and, under EU trade harmonization policies, it is not clear that banning below costs sales is legal (As I described in an earlier post, EU harmonization is tending to make legal alcohol more available and legal cannabis less available in member states).

News reports claim that Saskatchewan has cut binge drinking by implementing minimum pricing
, although a rigorous study by a disinterested researcher is apparently lacking (I am given to understand that Tim Stockwell, a well-respected alcohol researcher in British Columbia, is on the case, so I hope for better data in the future).

A minimum pricing law missed passing the Scottish parliament by a single vote this June. My mother’s family is Scottish (MacNabb tartan at left) and I enjoy the country and the people very much, so I hope I will be forgiven for indulging a bit in stereotype by saying that it takes some courage for politicians to vote to deny the Scottish people a discount. Nonetheless the idea still has legs in Scotland and may come up for a vote again soon.

Simon Moore of Cardiff University believes that minimum pricing’s possible benefits have been oversold. He and I and some other researchers debate this point in the current issue of Alcohol and Alcoholism. His particular worry that minimum pricing will cause heavy drinkers to switch to other substances, e.g., benzodiazepines, I think will apply only for a small number of very troubled drinkers and not the population of alcohol-consuming population as whole (We have bet a minimum-priced pint on this).

A second complaint about minimum pricing is that overall alcohol consumption is already falling in the UK, so there is no real problem for the government to solve. Alcohol consumption is highly skewed though, so total population consumption can drop while problem drinking soars which is what seems to be happening now in the UK.

The third common objection to minimum pricing is that the culture can handle this without government help. Italy for example, has experienced a significant drop in alcohol consumption over recent decades with no effective government intervention (I mean that in an absolute sense, not just compared to the general level of effectiveness we associate with Italian government). Won’t Britons get sick of all the heavy drinking and start to cut back and help their friends and family members cut back through normal cultural evolution?

The most compelling case I ever heard along these lines came from a sitting British politician, so it seems appropriate to tell it here. While I was working at the White House ONDCP, the UK Conference Consortium and Dr. Brian Iddins, MP were kind enough to host a reception at Parliament for ONDCP Deputy Director Tom McLellan. The ever-unpredictable mystery that is London traffic was shockingly light, so we arrived early and had the unusual experience of an idle 20 minutes or so standing in the hallway waiting for the reception to begin. As it happened, Peter Bottomley, MP came strolling by on his way to a meeting. I knew from years before so I said hello and brought him over to meet Tom. After hearing that we were in the thick of trying to design President Obama’s drug strategy in order to curb America’s drug problem, Peter told the following story:

When he was in the Thatcher government, he was at one point given responsibility for Roads and Traffic. As he expected (correctly) that he would move on to another post in 2 or 3 years, he assembled his senior staff and asked what he could do as Minister to make a major difference in that short window of time. He raised the issue of responding to drink driving fatalities, and was told by the knowledgeable people around him that he was on a hiding to nothing: Government policy was not going to reduce such a massive problem so quickly. He therefore launched no policy initiatives in that area. Yet drink driving fatalities declined dramatically under his watch. He said that what happened was that the culture changed. People started disapproving of drink driving, designated drivers became more the fashion, party hosts were more careful about serving “one for the road” and so forth. New government interventions, as Peter saw it anyway, were not necessary because the culture had the power to self-correct on its own.

This story stayed with me and still does. There is no doubt that the phenomenon he describes is real and sometimes policymakers intervene when they are not needed. But I am not persuaded that this is the right view to take of cultural tolerance for excessive drinking in the UK, because on this particular issue civil society is not a “natural, independent, self-healing organism” which government should regard as sacred. Rather, it is being actively pushed in a specific direction by economic interests. The culture needs a push from from the other side (i.e., public policy) in order to bring its natural self-correcting powers to bear. I don’t of course know whether minimum pricing, coupled with some of the other improved alcohol control policies being bruited by the Home Office will be precisely the right push, but I am quite convinced that the alcohol problem in the U.K. is at a point where a carefully evaluated introduction of new alcohol policies is essential for the health and safety of the citizenry.

I am sorry this was such a long post. I would have made it shorter but I didn’t have enough time. Next up in this series: The controversy over methadone in the U.K.