November 17, 2022

Minimum unit pricing vs ‘big alcohol’ profits

Man in bottle shop

Part two in a two-part series exploring the tactics used by the alcohol industry to undermine public health information on alcohol use.

We’ve previously written about how the alcohol industry, or ‘big alcohol’, uses tactics to downplay the health risks of drinking. 

They do this because the industry wouldn’t sell as much alcohol if drinking levels decreased.1, 2

The industry also tries to discredit policies aimed at lowering drinking levels. 

This includes Minimum Unit Pricing (MUP).

What is minimum unit pricing?

A minimum unit price, also known as a ‘floor price’, sets the minimum price a ‘unit’ (standard drink) of alcohol can be sold for. An Australian standard drink contains 10g of alcohol. 

Alcohol-related harms are especially high in the Northern Territory (NT) compared to the rest of Australia. To address this, MUP and other measures were introduced in 2018.1

In the NT, the MUP is set at $1.30 per standard drink.

This price was chosen to target cask or boxed wines, which provide larger amounts of alcohol at cheaper prices. These drinks are popular and contribute to alcohol problems in disadvantaged communities.1

MUP does not affect the price of beer, wine or spirits that cost more than this. 

One 375ml beer stubby is around $1.82 per standard drink.3

It also doesn’t affect drink prices in bars, pubs or nightclubs which are priced well above $1.30 per standard drink.

Why does minimum unit pricing matter?

Alcohol is the most widely used drug in Australia, and it’s also the most harmful.4

The harms include health impacts, and alcohol-related:

  • violence
  • traffic accidents
  • injuries.4

Often, it’s low income/disadvantaged communities most impacted by these harms.5

Easy access to cheap, high alcohol content drinks contributes to this. For example, some alcohol in Australia is sold for as little as 23 cents per standard drink.6

Cheaper alcohol increases drinking levels and leads to greater harms.7

Cheap drinks also encourage underage drinking and risky drinking behaviours – such as binge drinking.8

Heavy drinkers are more likely to prefer cheap drinks compared to low or moderate drinkers, and respond more to price changes.2, 7

When the cost of cheap alcohol increases, heavy drinkers tend to drink a bit less, reducing some of these harms.7

Generally, for every 10% rise in the price of alcohol, drinking decreases by about 5%.7

MUP is an effective solution that has almost no impact on the majority of people who drink.7

Price controls have been identified by the World Health Organization as the most effective measure governments have to reduce alcohol harm.7

Impact of minimum unit price in the Northern Territory

Since MUP was introduced in the NT in 2018, there have been significant reductions in alcohol-related harms, including:

  • road crashes causing injury or fatality 
  • assaults
  • ambulance attendances 
  • emergency department presentations
  • number of intoxicated people being taken into custody by police
  • number of child protection notifications, protection orders, and out-of-home care cases.9, 10

There’s also no evidence that MUP has negatively impacted NT industry, tourism or economy.10 The latest full report on MUP in the NT can be found on the NT Government website.

Minimum unit pricing has also been successfully introduced in 13 other countries, helping to reduce drinking and related health and social harms.7

The Alcohol and Drug Foundation (ADF) supports the introduction of a minimum unit price in all states and territories. You can read more in our position paper

So why the pushback?

The alcohol industry is quick to oppose any policies like MUP which aim to reduce drinking, because these policies can impact their profits. 

The industry uses marketing campaigns, political lobbying and legal action to try to stop or delay policies like MUP.11

In Scotland, MUP was passed into law in 2012. However, it wasn’t implemented until 2018, due to several legal challenges by the Scottish Whiskey Association. 

Although these challenges were eventually defeated, the alcohol industry was able to promote its agenda through these legal actions.11

The process also used up government time and money, meaning they couldn’t focus on other alcohol-related policies.11

Policies like MUP are effective at reducing harm, and they also reduce the amount of alcohol being sold.7

People who drink moderately aren’t affected much by these laws, but they aren’t the biggest alcohol spenders in Australia. 

Price and availability restrictions target heavy drinkers who have an increased risk of harm – and these are the people the industry relies on for their profits.12-14

So it’s no surprise big alcohol has repeatedly questioned the effectiveness of MUP, despite the evidence that it works.

Other MUP impacts

As MUP is implemented in more countries, we’re also finding out more about its other impacts. This includes its impact on the alcohol industry, and the wider economy. 

While MUP tends to decrease drinking levels, alcohol company revenue might in fact increase as prices rise.7

The Canadian alcohol industry is generally supportive of MUP, and endorses thorough implementation of the policy.15

In Scotland, smaller alcohol retailers have found MUP benefits them because they are now able to compete with larger supermarkets – who historically were able to sell at much lower prices.16

MUP can also benefit the wider economy. 

If people of working age drink less, there’s reduced sickness, death and unemployment.7

And, heavy drinking is associated with a reduction in Gross Domestic Product (GDP – a financial measure of all goods and services). So, decreasing heavy drinking can help boost the economy.7

Find out more

  1. Taylor N, Miller P, Coomber K, Livingston M, Scott D, Buykx P, et al.The impact of a minimum unit price on wholesale alcohol supply trends in the Northern Territory, Australia. Aust N Z J Public Health [Internet]. 2021 [15.09.2022]; 45(1):[26-33 pp.].
  2. Cook M, Mojica-Perez Y, Callinan S.Distribution of alcohol use in Australia. Bundoora 2022 [19.09.2022].
  3. Miller P. Beware of big liquor spin, false conspiracies and ‘myths’ about alcohol-related harm: drinktank; 2020 [15.09.2022].
  4. Bonomo Y, Norman A, Biondo S, Bruno R, Daglish M, Dawe S, et al. The Australian drug harms ranking study. Journal of Psychopharmacology [Internet]. 2019 [19.09.2022]; 33(7):[759-68 pp.].
  5. Boyd J, Sexton O, Angus C, Meier P, Purshouse RC, Holmes J. Causal mechanisms proposed for the alcohol harm paradox—a systematic review. Addiction [Internet]. 2022 [14.09.2022]; 117(1):[33-56 pp.].
  6. Johnston R, Keric D, Stafford J. The case for a minimum (floor) price for alcohol in Western Australia. McCusker Centre for Action on Alcohol and Youth; 2018. Available from https://apo.org.au/node/196401
  7. World Health Organization. No place for cheap alcohol: the potential value of minimum pricing for protecting lives. Copenhagen 2022 [15.09.2022].
  8. Foundation for Alcohol Research & Education (FARE). National Alcohol Strategy: analysis of alcohol industry submissions 2018 [19.09.2022].
  9. Coomber K, Miller P, Taylor N, Livingston M, Smith J, Buykx P, et al. Investigating the introduction of the alcohol minimum unit price in the Northern Territory. Final Report.Geelong, Australia: Deakin University; 2020 [19.09.2022].
  10. Frontier Economics, Yarning. Evaluation of Minimum Unit Price of Alcohol2022 [2.11.2022].
  11. Hawkins B, McCambridge J. 'Tied up in a legal mess': The alcohol industry's use of litigation to oppose minimum alcohol pricing in Scotland. Scottish affairs [Internet]. 2020 [17.09.2022]; 29(1):[3-23 pp.].
  12. Bhattacharya A, Angus C, Pryce R, Holmes J, Brennan A, Meier PS. How dependent is the alcohol industry on heavy drinking in England?Addiction [Internet]. 2018 [19.09.2022]; 113(12):[2225-32 pp.].
  13. The Economist. Alcohol firms promote moderate drinking, but it would ruin them. 2019 [19.09.2022].
  14. Foundation for Alcohol Research & Education (FARE).Risky business: The alcohol industry’s dependence on Australia’s heaviest drinkers 2016 [17.09.2022].
  15. Thompson K, Stockwell T, Wettlaufer A, Giesbrecht N, Thomas G, SpringerLink. Minimum alcohol pricing policies in practice: A critical examination of implementation in Canada. Journal of Public Health Policy [Internet]. 2016 [15.09.2022].
  16. Stead M CN, Eadie D, Fitzgerald N, Angus K, Purves R. Evaluating the impact of alcohol minimum unit pricing in Scotland: observational study of small retailers. Stirling2020 [17.09.2022].

Share this

Tags