While many BC residents enjoy using alcohol responsibly, the adverse health and social harms for many others are indisputable. The BC government is doing many things right with regards to attempts to minimize harm through its present alcohol policies but there is ample room for improvement, specifically in pricing. Of particular interest is how adjusting prices based on alcohol content can translate to lower levels of alcohol consumed and hence lowered levels of harm. Evidence from Canada suggests that the goals of increasing the consumption of lower strength products and reducing the consumption of higher strength products are achievable and need not adversely impact consumer enjoyment, government revenue or profits of the alcohol retail sector.
Undoubtedly, there will always be some public opinion in favour of keeping alcohol cheap and available. However, the fact remains that lowering the amount of alcohol traveling through our bodies and communities results in lowered levels of alcohol-related harm, both personally and socially. Further, alcohol behaves like any other commodity with changes in price translating to changes in sales. In fact, a recent study of Saskatchewan’s 2010 adjustments to alcohol pricing found just that. Increases to the minimum price for alcohol, based on alcohol content, led to decreased sales of higher alcohol choices, while increasing consumer preference for lower alcohol alternatives and also government revenue. Bottom line: less alcohol consumed, less harm, and more money made. Not a bad scenario.
Currently, BC’s pricing on liquor does not take into account alcohol content, resulting in many higher strength options being cheaper per “standard drink.” (Reducing Alcohol-Related Harms and Costs in British Columbia). Of the approximately 6000 alcoholic beverages available throughout BC liquor stores, low alcohol content varieties of beers, coolers, wines and spirits are all more expensive than their higher strength counterparts.
Following the logic of commodity and price behaviour, it is no surprise that the low alcohol beer (<4%) and wine market (<11%) in BC comprise a minuscule .29% and 2.85% share respectively.
Focusing on beer for a moment, BC has no special tax incentives for products between 2.5 and 4% alcohol. Currently, there are only 4 low alcohol beer choices compared to 38 choices in Australia where these products account for nearly 40% of the beer market. Interestingly, Australia has successfully implemented price incentives for producing, promoting and consuming low alcohol content beer and thus these pricing differences could very well be the underlying mechanism explaining the considerable contrast in consumer behavior.
A common reaction to the proposed incentives for low alcohol choices is that it will not fly with the majority of Canadian consumers. It’s almost as if Canadian identity is bound up in an association that higher alcohol content confirms a national ruggedness and distinguishes Canadians from their neighbours to the south and their watered down, “weak” alcohol. Surely, Canadians can tell the difference between low and high alcohol content, right? Well, maybe not all the time. A Canadian study found that young male beer drinkers were unable to reliably differentiate between unmarked low (3.7%) and high (5.6%) alcohol content beer and reported similar levels of enjoyment and subjective intoxication after consuming each type. Although this was just one study, it supports a growing body of research supporting the notion that given the right conditions, drinkers do not differentiate between high and low alcohol content, nor do they increase their consumption rates to make up for the “weak” beer. Another example of this is the practice of Australian rugby leagues, where they serve eager patrons lower alcohol content beer at popular matches, and subsequently see a decrease in the amount of intoxication and alcohol related harm, but receive no complaints about weak drinks.
While there will likely be opposition to increasing the price for higher alcohol choices, price adjustments based on alcohol content can encourage consumption and production of lower alcohol content beverages. This would in turn lower alcohol related harm, and perhaps over time, also the belief that stronger is necessarily better.
Should the BC drinkers be given price incentives to select lower alcohol content beers, wines, coolers and spirits?
Author: Dave Segal