In 2016 the UK Government updated its 1995 guidelines for limits on alcohol use and recommended that neither men nor women should drink more that 14 units of alcohol per week. A unit in the UK is equivalent to 8g of pure alcohol. This means British men are now being told they should drink less than those in Ireland (21.2 British units), Denmark (21), New Zealand (19) and considerably less than the recommended upper limit for men in Spain (35).
The supply side of the alcohol industry
Current public policies and industry pledges
Although public policies to reduce the harmful effects of alcohol use are aimed at both the individual and population levels, they tend to orientate towards individual problem drinkers. Among the most effective policy options are alcohol taxes, restrictions on alcohol availability and drink-driving countermeasures. The giant alcohol beverages corporations advocate responsible drinking and pledge their commitment to, “supporting balanced initiatives that are linked to their core business functions and those that address wider social and public health issues, relying on initiatives that are evidence based, culturally sensitive, and collaborative.” The drinks producers support the WHO’s Global Strategy to reduce the harmful Effects of Alcohol, and are committed to: (i) reducing under-age drinking, (ii) strengthening and expanding marketing codes of practice, (iii) providing consumer information and responsible product innovation, (iv) reducing drinking and driving, and (v) enlisting the support of retailers to reduce harmful drinking.
Growth of service economies and the importance of individual preferences
Despite public policies and industry pledges to limit alcohol use, the large and escalating burden of alcohol problems continue to present significant challenges to medicine and public health. In part, this is because population-based public health policies tend to be overlooked in favour of policies oriented towards individual drinkers. This orientation can be explained by globalization.
Over the past 40 years globalization has shifted the economic base of developed nations from manufacturing to services, which places greater emphasis on consumer markets and individual preferences. In such a context, efforts to reduce the harmful effects of alcohol use are mainly focused on the demand side of the market, emphasising individual behaviours and preferences; and less focused on the supply side, which is dominated by producers. As a consequence, public policies to limit alcohol use tend to focus on the choices of vulnerable individual drinkers and call for responsible drinking. In effect this provides producers with a “free pass” to pursue and develop their strategies to sustain consumption.
50% of alcohol production is in the hands of “informal” small producers
Shifting the policy emphasis to focus equally on the demand and supply side of the alcohol beverages market is not straightforward. Although nearly half of the of the world's alcohol supply is dominated by giant producers, more than 50% is in the hands of ‘informal’ home and local producers. At the national level the industry comprises large and small beer, wine or spirit producers or importers, as well as bars, restaurants and a variety of retail outlets, which markets alcohol to the public. These players have diverging interests as well as interests in common in regard to policy frameworks. There is a dearth of reliable information on the industry and the principal sources of information come from market research firms and business journalism.
Large global fast-growing market
The alcohol beverages market is large, global and fast growing. According to an April 2018 report by Transparency Market Research, in 2017 the market was worth US$1,205bn and is expected to expand at a CAGR of 6.4% and reach US$2,000bn by the end of 2025. Recent consolidation in the industry puts a significant and increasing proportion of alcohol production, distribution and marketing in the hands of a few giant corporations, which dominate national, regional and global markets and wield considerable political influence. Mergers and acquisitions are expected to continue, so the consolidation of the industry is expected to continue.
The market is driven by increasing urbanization, the global young-adult demographic, high and growing disposable incomes and increasing consumer demand for premium and super premium beverages. The latest figures suggest that the average alcohol use in the UK is about 9.7 litres per adult, which compares with 8.8 litres for adults in 34-member countries of the Organisation for Economic Co-operation and Development (OEDC), and ranks the UK 16th out of the OEDC countries. Since 1970, alcohol consumption has decreased by an average of 15% across OEDC countries, while in the UK it has risen 14% over the same period. Alcohol use has declined 69% in Italy, 48% in France, 36% in Spain and 30% in Germany, but has increased 51% in Ireland. Consumption of alcohol per head in the UK has fallen by about 17% since its recent peak in 2004. But that followed a steep rise.
A study reported in 2015 in the International Journal of Advertising suggests that advertising has little impact on how much we drink, but it is effective at influencing what we drink. ‘Premiumization’ is a term used in the industry to describe how spirit brands have had success convincing consumers that they should drink “higher quality” and more expensive beverages. An example of this is the recent boom in the sale of gin, which corresponded with the industries premiumization strategies that linked gin with “fashionable” early 20th century style.
UK alcohol taxes far exceed the costs to public services
The “free-pass” enjoyed by alcohol beverages corporations is strengthened by the relative lack of public scrutiny they receive. This might be partly explained by the fact that governments benefit significantly from alcohol related taxes and duty. Consider Britain. In 2016 the UK government made nearly £3.4bn in tax revenue from spirits; beer sales made the UK government £3.3bn in 2017. Some 60% of the price of a pint of beer is taken in VAT and alcohol duty, while VAT on the price of a bottle of gin is 76%. Wine is the biggest earner for the UK exchequer yielding over £4bn in taxes from sales in 2016. These sums accord with a September 2015 Institute of Economic Affairs (IEA) study on alcohol taxes, which suggests that the annual revenue generated from alcohol taxes in the UK is “illogical and excessive.” Rather than tax alcohol the UK government taxes drinks. For instance, a unit of alcohol is taxed at 28p if it happens to be in a glass of whisky but only 8p if it is in a pint of cider. Further, if the cider is strong, the tax is 7p but if it is fizzy the tax is 34p. The tax on a unit of alcohol in a glass of wine is 20p, but if wine is sparkling, the tax is 25p. Confused? The structure of alcohol excise taxes is partly restricted by an EU Directive, which sets out different tax rates for different alcoholic beverages.
Revenues from UK alcohol taxes and duty far exceed the actual direct costs of alcohol-related health and crime issues. According to the IEA study, the UK exchequer collects about £10bn a year in alcohol taxes while the direct costs of alcohol related problems to the health, police, prison services, welfare system and judiciary, amount to some £4.6bn per year. Although studies that report cost-of-alcohol data are notoriously unreliable, the IEA suggests that British drinkers contribute about £6.5bn each year to the UK exchequer and believes that, even within the current constraints, the UK tax system could more effectively target problem drinking. In a February 2017 paper the IEA describes a suggested reform of the UK’s alcohol tax policy.
Findings of the 2018 study published in The Lancet suggest that risks from alcohol start from any level of regular drinking and rise with the amount being consumed and any amount of regular alcohol use can significantly shorten your life. This echoes a 2010 study also published in The Lancet, which suggested that because alcohol is so widely available it is more harmful than heroin and crack cocaine.
This commentary reaffirms the global epidemic of disease, injury, social problems and death caused by alcohol and suggests an explanation why for decades governments have failed to effectively limit alcohol use.