spiritNEWS June 2023

European Report on mapping of price policies and fiscal measures applied to alcoholic beverages

Last summer, the European Commission released a report entitled ‘SC 2097106: Mapping of price policies and fiscal measures applied to food, non-alcoholic and alcoholic beverages. This study has been contracted by the European Health and Digital Executive Agency and led by the public policy research consultancy ICF.

While the question of “HOW” pricing policies and fiscal measures were introduced in EU Member States was adequately described and captured in the report, the question of WHY the measures were introduced as well as the assessment of the alleged effectiveness of these measures were not addressed in a methodologically satisfactory manner. Most surprisingly, the conclusions drawn at the end of the report are inconsistent with much of the evidence provided in the report itself.

As the report states, most pricing and fiscal policy measures were NOT primarily introduced to change consumption behaviour or drinking patterns, but for fiscal reasons. Strangely enough though, the authors conclude that fiscal measures were implemented for health reasons to curb harmful drinking and alcohol-related harm.

To answer the question about the effectiveness of such policy measures, the study claims to draw its conclusions from an analysis of six countries, namely Australia, Finland, Greece and the Baltics countries. That evidence shows a highly complex picture, demonstrating that taxes are neither straightforwardly related to the affordability of alcoholic beverages, which, in turn, appears to be weakly related to per capita alcohol consumption at the very best, while the latter is not directly associated with alcohol-related harm. More specifically:

  • In Finland, excise duties on alcoholic beverages increased, whilst total per capita alcohol consumption fell by 14.4% and yet, the authors find a rise in alcohol-related deaths.
  • Estonia has not only the lowest alcohol-related death rate among the Baltic countries and the most significant decline in alcohol-related deaths since 2001. And yet, this coincides with increases in total per capita alcohol consumption and excise tax hikes.
  • In Greece, taxes on alcoholic beverages experienced a significant increase (mostly driven for fiscal reasons by the Troika after the economic crises). This coincided with a significant decline in recorded per capita alcohol consumption and a massive increase in unrecorded alcohol consumption. On balance, Greece registered a slight increase in total per capita alcohol consumption and yet, a decline in alcohol-related harm.

Notwithstanding the above analysis, the authors’ final claim is that fiscal measures should be considered effective health policy tools and that taxes should therefore be increased significantly – an undue and misleading statement which fails to reflect correctly the evidence discussed and does not mention the inherent methodological limitations of the analysis itself (limited number of countries, comparatively short time span). A sincere and proper conclusion of the report’s own findings would need to say: The collected evidence is contradictory, mixed, and inconclusive as regarding the question whether pricing and fiscal policy measures are effective and efficient in reducing alcohol-related harm.

It is irritating to see such obvious methodological shortfalls and inconsistencies made in a published report. If this were a scientific publication, the study would need to be retracted. At the same time, the public can rightfully expect that minimum levels of scientific and methodological rigour are maintained also in third-party commissioned policy reports. The Commission would be well advised to review its internal procedures to ensure adequate processes and minimum quality checks are put in place (for instance, obligation for subcontractors to run external peer review processes prior to finalisation) to ensure this is the case in the future.

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