Drawing on recent research by academics at the University of Glasgow and Strathclyde University, Professor Graeme Roy explores how we can go about assessing the demand and supply consequences of changes in alcohol policy.

Despite efforts to combat excessive drinking, the harmful use of alcohol resulted in an estimated 3 million global deaths (5.3% of all deaths) in 2016. In the UK, there were over 8,900 deaths in 2020 related to alcohol-specific causes, higher than in any other year since 2001

Raising the price of alcohol either through taxes or a minimum unit price (MUP) has been argued by many in the public health profession to be an effective policy response to reduce excessive consumption.

Tax policies targeted at reducing alcohol consumption are however, typically understood to be associated with economic losses, including in alcohol production and trade sectors. These sectors employ thousands of people across the economy and contribute to the economy through exports and domestic sales.

But in reality, reductions in spend on alcohol products will lead to increased spending in other areas. These may offset some of the economic losses in the alcohol production and sales sectors. Moreover, improvements in public health from reduced alcohol consumption should lead to reduced economic costs from being absent from work (absenteeism) or not being productive whilst at work (presenteeism).

Capturing all these effects is not straightforward. In a recent paper published in Public Health, researchers at the University of Glasgow and Strathclyde University sought to develop a framework for assessing the demand and supply consequences of changes in alcohol policy.

Taking the Scottish economy as a case study, the analysis finds that an increase in alcohol taxation on its own will lead to negative economic outcomes on jobs and economic output (i.e. Gross Domestic Product).

But these negative economic effects can be reduced significantly when the revenues from alcohol taxes are recycled through increased government spending. Moreover, just a small improvement in labour productivity would be sufficient to turn the economic consequence positive.

The study concludes that debates over alcohol taxation – and the arguments for and against –are often siloed between businesses, economists and public health officials. Instead, debates need to examine both the economic and public health consequences as one shared policy agenda.

The findings have important implications for other areas of public policy, such as gambling research, where similar debates between the social, health and economic impacts of policy choices remain siloed.

Read the full paper on Enlighten Publications webpage

First published: 6 September 2023

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