Minimum unit pricing vs ‘big alcohol’ profits

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 2018.²

In the NT, the MUP is set at $1.30 per standard drink. This is expected to increase with inflation in 2023.³

This price was chosen to target cask or boxed wines, which provide larger amounts of alcohol at lower prices. These drinks are popular and contribute to alcohol-related health and social harms in disadvantaged communities.^{2, 3}

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.⁴

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.⁵

The harms include health impacts, and alcohol-related:

• violence
• traffic accidents
• injuries.⁵

Often, it’s low income/disadvantaged communities most impacted by these harms.⁶

Easy access to inexpensive, high alcohol content drinks contribute to this. We know that low-cost alcohol increases drinking levels and leads to greater harms.⁷

People who drink inexpensive drinks, including cask wine, are more likely to consumer higher amounts of alcohol.⁸

Heavy drinkers are more likely to prefer low-priced drinks compared to infrequent or moderate drinkers.

Heavy drinkers also respond more to price changes.^{1, 7} When the cost of these drinks increase, 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

In the NT, MUP was associated with an increase of just $3.07 in annual alcohol spending for moderate drinkers.⁹

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 pricing

Minimum unit pricing has reduced the consumption of cask wine in the NT, and since its introduction alcohol-related harms have decreased.

But these changes haven’t been in isolation – the COVID-19 lockdowns and other alcohol-related policies introduced have also contributed to reducing the harms.¹⁰

MUP is also a very cost-effective measure, and there’s no evidence that it has negatively impacted NT industry, tourism or economy.^3,7,10 The latest full report on MUP in the NT can be found on the NT Government website.

To find out more about MUP in the NT, you can watch the National Drug and Alcohol Research Centre’s webinar.

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

In Scotland, there’s been a 13% decrease in alcohol-attributable deaths and a 4% reduction in hospitalisations following the implementation of a MUP. The largest impacts were seen in the 40%

most socioeconomically disadvantaged areas, leading to better health outcomes for these communities.¹¹

A recent evaluation of MUP in Scotland found overall positive health impacts, but also highlighted the need for evidence-based treatment and wider support for those experiencing alcohol dependency.¹²

We support the introduction of a minimum unit price in all Australian states and territories. You can read more in our position paper.

Alcohol industry pushes back to preserve profits

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.¹³

In Scotland, MUP was passed into law in 2012. But 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.¹³

The process also used up government time and money, meaning they couldn’t focus on other alcohol-related policies.¹³

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 greatly 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. These are the people alcohol companies rely on for their profits. The heaviest drinking 20% of the Australian population drank 75% of all alcohol consumed in 2019.1 So it’s no surprise ‘big alcohol’ has repeatedly questioned the effectiveness of MUP, despite the evidence that it works.⁷

Other impacts of minimum unit pricing

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

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.¹⁴

MUP can also benefit the wider economy in multiple ways.

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

• Tips for reducing your alcohol risk
• Read more evidence in the ADF Library
• Read books on this topic