Noah Vinter
Alcohol minimum pricing policies are strategies used to reduce excessive alcohol consumption and related harms. The two main types of alcohol minimum pricing policies are minimum unit pricing, which sets the lowest price per standard drink of alcohol, and minimum pricing, which sets prices based on the container size of a specific type of alcohol. Alcohol minimum pricing policies are more common in Europe and Canada than in the United States, where alcohol can cost less than $1 per ounce of alcohol. However, some states, such as Oregon, are beginning to implement these policies. Minimum unit pricing was introduced in Scotland in 2018, with the minimum price for alcohol currently at 65p per unit, and in Wales in 2020, with a minimum price of £0.50 per unit.
| Characteristics | Values |
|---|---|
| Definition | Minimum unit pricing sets the lowest price per unit of alcohol that can be sold. |
| Purpose | To reduce alcohol-related harm by making alcohol less affordable. |
| Effectiveness | Research shows that minimum unit pricing has helped reduce alcohol-related deaths, injuries, and hospital admissions. |
| Examples | - The minimum price per unit of alcohol is 65p in Scotland.- The National Assembly for Wales agreed on a minimum unit price of £0.50, introduced on March 2, 2020. |
| Calculation | The minimum price formula is: MUP (£) x Strength (%) x Volume (litres). |
| Comparison | Alcohol minimum pricing policies are more common in Europe and Canada than in the United States. |
| Pricing Variation | There is significant variation in alcohol prices within different categories, such as beer, wine, and spirits. |
| Price Range | Alcohol prices can range from under $1 per ounce of ethanol to over $4 per ounce. |
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What You'll Learn
Minimum unit pricing
MUP is designed to reduce alcohol-related harm by making alcohol less affordable, particularly for those who consume excessive amounts. Research has shown that increasing the price of alcohol leads to a decrease in consumption, with a 10% increase in price estimated to reduce overall consumption by 7.7-14%. This, in turn, can lead to a reduction in alcohol-related illnesses, injuries, and deaths. For example, a study in Michigan found that increasing the price of the cheapest liquors by 13 cents per standard drink could lead to a 4% decrease in alcohol consumption and save hundreds of lives.
MUP is distinct from other alcohol pricing policies, such as alcohol taxation, which is the status quo in many countries, including the United States. Alcohol taxation typically involves a fixed dollar amount per volume of alcohol or a percentage-based tax on the price of the alcoholic beverage. While taxation can also increase the price of alcohol, it may not directly target drinks with high alcohol content, which are often associated with excessive consumption and related harms.
MUP has been recommended by organisations such as the World Health Organization to complement existing alcohol control measures. It has been implemented in several parts of the world, including Europe, Canada, and select states in the United States, such as Oregon. However, its usage in the United States is limited compared to other countries.
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Alcohol-related deaths
Alcohol minimum pricing policies are strategies used to reduce excessive alcohol consumption and, consequently, alcohol-related illnesses, injuries, and deaths. These policies set a floor price below which alcohol cannot be sold, affecting retail prices and influencing consumer decisions. The two main types of alcohol minimum pricing policies are:
- Minimum unit pricing (MUP): This sets a price per standard drink or unit of alcohol (e.g., 0.6 oz or 14 g of pure alcohol).
- Minimum pricing: This sets prices based on the container size of a specific type of alcohol, such as a liter of beer or liquor.
Excessive alcohol use is a leading risk factor for global disease burden and increases the likelihood of alcohol-related illnesses, injuries, and deaths. When alcohol is more affordable, individuals may drink excessively at a low cost. By increasing the price of alcohol, individuals may buy and consume less, reducing the risk of alcohol-related harm. According to the World Health Organization, alcohol minimum pricing policies can effectively complement alcohol taxes to reduce alcohol-related morbidity and mortality.
In Scotland, minimum unit pricing legislation was introduced in 2018, with an initial minimum of 50p per unit, which later rose to 65p per unit. This led to a 3% reduction in alcohol sales in Scotland, driven mainly by decreased sales of spirits, cider, and perry. A report in The Lancet found that minimum unit pricing in Scotland was associated with a 13.4% reduction in deaths solely attributable to alcohol consumption. Wales introduced minimum unit pricing in March 2020.
In the United States, alcohol taxes are the most common policy for adjusting alcohol prices. However, specific excise taxes, which account for about 20% of total state alcohol tax revenues, have not kept up with inflation, making alcoholic beverages relatively cheaper over time. Some states, like Oregon, are starting to implement minimum pricing policies. A study in Michigan found that raising the price of the cheapest liquors by 13 cents per standard drink could lead to a 4% decrease in alcohol consumption in the state and potentially save hundreds of lives.
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Alcohol taxation
Alcohol taxes are selective sales taxes imposed on the purchase of alcohol. In 2021, state and local governments in the US collected $8.2 billion in alcohol taxes, or 0.2% of general revenue. Alcohol taxes are typically levied as an amount per unit sold (i.e. per gallon of beer, wine, or liquor), and the tax is usually remitted by the producer or distributor during the wholesale transaction. However, the cost of the tax is ultimately passed on to the consumer in the final retail price.
Alcohol excise taxes are per-gallon taxes, with the rate based on the type of alcohol. Liquor is taxed at a higher rate than wine, and wine is taxed at a higher rate than beer. In some states, tax rates also vary based on the location of the seller and the quantity produced. In addition to excise taxes, states may also collect license taxes for the manufacturing, importing, wholesaling, and retailing of alcohol. These taxes comprised less than 0.1% of state and local general revenue in 2021.
Alcohol taxes are sometimes referred to as a corrective or "sin tax" because they are intended not only to generate revenue but also to discourage alcohol consumption by increasing its price. This is similar to how taxes are levied on cigarettes, marijuana, and soda. Research has shown that increasing the price of alcohol is an effective strategy for reducing excessive consumption and alcohol-related harms. The World Health Organization recommends alcohol minimum pricing (MP) policies, which set a floor price below which alcohol cannot be sold. One type of MP policy is minimum unit pricing (MUP), which sets a floor price by unit of alcohol (e.g. 0.6 oz or 14 g of pure alcohol).
While minimum pricing policies are not common in the United States, some states such as Oregon are starting to adopt them. Studies have shown that even a small increase in the price of the cheapest alcohol could lead to a significant decrease in alcohol consumption and related harms. For example, one study found that raising the price of the cheapest liquors in Michigan by 13 cents per standard drink could result in a 4% decrease in alcohol consumption in the state and save hundreds of lives.
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Minimum pricing policies
MUP sets a floor price per standard drink or unit of alcohol, such as 0.6 oz. (14 g) of pure alcohol. This means that alcohol cannot be sold below this price per unit, regardless of the type or brand. The price is determined by multiplying the MUP by the percentage strength of the alcohol and its volume. For example, in Wales, the MUP is set at £0.50, so the minimum price for a 70cl bottle of vodka with 40% ABV would be £14.00.
Minimum pricing, on the other hand, sets prices based on the container size of a specific type of alcohol, such as a liter of beer or liquor. This means that the minimum price varies depending on the volume and type of alcohol being sold. For instance, in Scotland, the minimum price for alcohol is 65p per unit, and this price increases with the amount of alcohol a drink contains.
Research has shown that increasing the price of alcohol can effectively reduce excessive consumption and alcohol-related harms. For example, one study found that raising the price of the cheapest liquors in Michigan by 13 cents per standard drink could lead to a 4% decrease in alcohol consumption and save hundreds of lives. Similarly, a 10% increase in the price of alcoholic beverages has been estimated to reduce overall consumption by 7.7% to 14%.
While minimum pricing policies are not commonly used in the United States, some states like Oregon are starting to implement them. These policies are more frequently used in parts of Europe and Canada, where they have been successful in reducing alcohol-related illnesses and deaths. The World Health Organization also recommends alcohol minimum pricing policies as a way to complement alcohol taxes and reduce alcohol-related health issues and mortality.
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Alcohol minimum pricing laws
These policies are used to complement existing alcohol taxes and can be effective in reducing excessive alcohol consumption and related harms. Research has shown that increasing the price of alcohol leads to a decrease in overall consumption, which in turn reduces alcohol-related illnesses, injuries, and deaths. For example, a study in Michigan found that raising the price of the cheapest liquors by 13 cents per standard drink could lead to a 4% decrease in alcohol consumption and save hundreds of lives. Similarly, a 10% increase in the price of alcoholic beverages has been estimated to reduce overall consumption by 7.7% to 14%.
While alcohol minimum pricing laws are not commonly used in the United States, where alcohol taxes are the most common policy to adjust alcohol prices, some states such as Oregon are starting to implement them. In contrast, parts of Europe and Canada have successfully adopted these policies, demonstrating their effectiveness in reducing alcohol-related harm.
Overall, alcohol minimum pricing laws are a public health intervention aimed at reducing the negative impacts of excessive alcohol consumption by making it less affordable. By setting a floor price for alcoholic beverages, these policies encourage lower consumption, leading to improved health outcomes and reduced harm for individuals and communities.
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Frequently asked questions
The minimum price per unit of alcohol is set at 65p in Scotland, 50p in Wales, and there are ongoing discussions about implementing a minimum price in England.
Minimum unit pricing (MUP) is a policy that sets a floor price per unit of alcohol that cannot be sold below. It aims to reduce alcohol-related harm by making alcohol less affordable.
The minimum price is calculated based on the MUP, the percentage strength of the alcohol, and its volume. The formula is: MUP (£0.5) x Strength (%) x Volume (litres) = minimum price.
Minimum unit pricing is an effective strategy to reduce excessive alcohol consumption and related harms. It increases the price of cheap alcohol, leading to reduced consumption and a positive impact on public health.
Minimum unit pricing has been shown to reduce alcohol-related deaths, hospital admissions, and alcohol-related illnesses. It also encourages individuals to drink less and lowers the risk of alcohol-related injuries and conditions.
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