Would an increase in excise duty on alcohol have a sobering effect? Laura Slatteryinvestigates
How price-sensitive are Irish drinkers? The quick answer is that it depends on how much alcohol is swimming through their bloodstream when they take out their wallets.
But for the Health Service Executive (HSE), the statistics tell their own sobering story. Irish adults are the third-highest consumers of alcohol in the EU (behind Luxembourg and Hungary). But our intake of drink peaked in 2001, the first of two years in which the Government's December budget gave the drinks industry the unwelcome Christmas gift of a tax increase on alcohol.
According to a new report by the HSE, increases in excise duty in 2001 and 2002 have directly led to a reduction in per capita alcohol consumption, which fell from 11.2 litres per capita in 2001 and 2002 to 10.6 litres in 2003. The rate has remained static since then.
The findings are clear, the HSE believes: increasing the excise duty on alcohol is an effective measure to reduce the unacceptably high levels of alcohol-related health problems and social harm caused by excess drinking. It has recommended that the Government increase drink taxes by 10 per cent in Budget 2008.
The HSE is far from alone in thinking taxes will curb excess drinking habits, and not the first organisation to link high levels of inebriation with cheap booze. The Department of Health's Strategic Taskforce on Alcohol had made similar calls for higher duties, while as far back as 1736, the Grand Jury of Middlesex declared that "the low price of spirituous liquors is the principal inducement to the excessive and pernicious use thereof".
But its call for higher taxes hasn't gone down well with the Drinks Industry Group of Ireland (DIGI), the umbrella group that represents brewers, distillers, publicans, off-licences and the hotel and restaurants trade. Ireland already has the highest levels of taxes on wine and beer and the second-highest taxes on spirits and cider in Europe, it points out.
About 30 per cent of the price of a pint in a pub goes to the Government in the form of taxes, while almost two-thirds of the price of a bottle of whiskey in an off-licence is tax.
It follows, according to DIGI's logic, that if higher taxes - or rather higher prices - did indeed lead to increased sobriety, Irish people wouldn't have the reputation they do for being, at best, exceptionally tolerant of alcohol abuse and, at worst, in a permanently sozzled state.
"There are other factors at play here," says DIGI chairman Michael Patten.
"One is that we have had a demographic bubble in the 18-35 age group, and there has been a change in the culture among that age group. The big Friday night out, where they drink as much as possible, is perceived as a good night out. That's definitely a problem."
Sweden is the only EU country that admits to using tax as an instrument for managing the social impact of alcohol, Patten says. The Swedish consumption figures do look terribly good, with adult Swedes consuming just six litres of pure alcohol per adult.
In Europe, only the Bulgarians drink less. But Patten says the Swedish consumption rate is helped not by its tax policy but by the high levels of alcohol purchased outside the state - sales that are not captured by the data.
"I would challenge the idea that there's this relationship between prices and consumption. Alcohol sales are income-elastic rather than price-elastic, in that people respond to changes in their income rather than prices," Patten argues.
Dr Joe Barry, specialist in public health at the HSE, says the drinks industry's claims that higher taxes don't work are "just not true".
An international body of evidence points to a fall in consumption when prices rise, with heavy or problem drinkers proving no exception to the rule.
"There was an increase in excise duty on cider in 2001 and on spirits in 2002. In each case, the consumption of that commodity dropped the following year," he says.
Indeed, cider firm C&C has cited the 21p (27 cent) hike in cider duty as the reason for the shrinking of the cider market five years ago. But cider sales are vulnerable to other influences - principally the weather, Patten says. The increase in spirits duty was well flagged and led to bulk pre-selling of alcohol, he adds, meaning the mini-collapse in spirits sales of almost 200,000 litres in 2003 was inevitable.
But DIGI doesn't appear to claim that prices have nothing at all to do with the level of intake. It suggests instead that consumers find ways of getting round the problem, either by sourcing their alcohol overseas or turning to cheaper home drinking.
Wallet-conscious English drinkers have a long tradition of booze-cruising or Chunnelling to France to load up their car boots with duty-free drink. For Irish drinkers, access to cheap continental drink is a little trickier, but they don't always have to bother importing the drink themselves.
Last summer, Tesco offered customers two pint bottles of C&C's Magners for the discounted rate of €3 - much less than it was charging for two pints of Bulmers, the Irish brand name for the same drink. Tesco bought in the British version of the cider through the "spot market" where products that have been overbought are then made available to other buyers at attractive prices.
It is the abolition of the ban on below-cost selling under the Groceries Order that allows supermarkets to use alcohol promotions like this as loss leaders.
"There is a glaring inconsistency there," says Patten. "If the Government felt that the price of alcohol caused high consumption, you wonder why they abolished the ban."
Meanwhile, drink driving laws, the smoking ban and pub closures have all prompted a dramatic shift from pub drinking to home drinking. In 2001, 70 per cent of the drinks market was on-trade, while 30 per cent was off-trade, or outside the pubs. That has now swung to 52 per cent in favour of the off-trade. An increase in excise duties will accelerate the trend, according to Patten, and could merely serve to further hide the extent of alcohol abuse in Irish society.
The home-drinking phenomenon also suggests that making the below-cost selling of alcohol as taboo as happy hours could yield positive results, and Barry says there is a separate need for minimum policy regulations. But for the moment, the eyes and ears of public health specialists are trained on what Minister for Finance Brian Cowen will do on Budget day.