Is tax the answer?

Every responsible licensee is aware that alcohol can cause problems. With the health risks a topic of increasing debate and the media never shy of publishing a sensationalist binge-drinking story, alcohol health bodies are stepping up their efforts to prevent so-called 'problem drinking'. Last week a new coalition called for a 10 per cent tax rise on alcohol.

Would this solve any of the country's drinking problems? New health body the Alcohol Health Alliance (AHA) believes so. Made up of 21 health and temperance groups, AHA is proposing stricter regulations governing drink, health warnings on alcohol adverts and promotions, and the tax rise.

AHA is headed by the Royal College of Physicians, and its president Professor Ian Gilmore says that a higher tax on alcohol would be more than just a deterrent to problem drinkers. "Increased taxation on alcoholic drinks could be used to inject badly-needed resources into alcohol services across the NHS, which currently remain woefully inadequate," he says.

Gilmore also argues that a rise in the price of alcohol for the consumer would reduce the problems surrounding it. "Research from around the world shows a direct link between affordability of alcohol and level of consumption," he says. "Raising the tax on alcohol would help reduce our consumption, and reduce the future burden of ill-health from alcohol misuse."

No relation

But Gilmore¹s views have attracted criticism from other areas of the industry. While the view that raising alcohol prices would mean people drinking less seems logical initially, Mark Hastings, communications director of the British Beer & Pub Association (BBPA), says the level of tax in the UK bears no relation to drinking alcohol to excess.

"If high tax rates were the solution to binge or excessive drinking, then you wouldn¹t have that issue in the UK, because we already have one of the highest tax rates in Europe, if not the world," he says.

"If you look at the situations in Finland, Sweden and Norway and compare them with France, Spain and Italy, you couldn¹t have a starker contrast between the two. There is a Mediterranean drinking culture in the latter, which is the product of a very low-price, very low-tax alcohol economy, and problems with excessive weekend binge-drinking in the Northern European countries with higher tax rates." The BBPA ­ and many more in the pub trade ­ suggest that tax is the wrong way to solve the familiar problems of binge-drinking and alcohol abuse.

Concerns have also been raised that problem drinkers, turned away from the pub by higher prices, would leave the controlled atmosphere of the pub and take their problems into their home.

Sarah Matthews, a spokeswoman for the British Liver Trust ­ which is also involved in AHA ­ says that despite such worries it is time to act on problem drinkers. "More people are consuming more alcohol, that¹s pretty obvious," she says. Matthews also argues that "the culture within pubs of buying two glasses of wine and getting the bottle free" is contributing to the problem.

Taxed out of existence

Licensees are also concerned, although many are naturally worried about the state of their businesses should a tax hike occur.

On the proposed 10 per cent rise, Martin Jones of the Angel Inn in Royton, Lancashire, says: "They might as well raise it 100 per cent, a 10 per cent raise would kill me. I¹m fully tied, so it¹s not as if I can find alcohol for 10 per cent cheaper, I¹ve got to pay the price that the brewer is selling it to me at." Jones also echoes the belief that a tax rise would unfairly punish the majority of pub-goers. "The government is trying to tar our industry, and suggest that everyone who drinks is bad. There are a lot of responsible drinkers who stick within the laws, don¹t drink too much, and don¹t binge-drink, but they are paying the price." AHA plans to officially launch its campaign later this month, but it is too early to tell whether their mooted tax rise could become a reality. A Treasury spokesman could only say: "All taxes are kept under review by the Chancellor as part of the Budget process." But it is fair to say that a sudden 10 per cent rise is unlikely to happen overnight.

Few would argue that irresponsible drinking in this country is not an issue, but is a blanket tax increase really the right way to combat the issue? Mark Hastings believes that AHA¹s proposals would only add to the problem. "It would open up an entirely new can of worms ­ an enormous black market in alcohol," he says.

"It would encourage people to seek alcohol outside of the formal market and therefore outside the control of a licensed market. If you are a legitimate retailer of alcohol, it would have a detrimental effect on your business."