News analysis

Much booze.
  • Western Cape premier premier Alan Winde wants "fast-tracked" the implementation of a minimum unit price on alcohol.
  • While universal sin taxes reduce alcohol use, floor-price systems are more finely targeted at heavy drinkers, seeming to reduce alcohol harm with less impact on moderate drinkers and the booze industry.
  • Long-term research out of Canada, and short-term findings in Scotland, strongly suggest such schemes can work.
  • But Scotland also shows that an alcohol industry that disagrees with Winde's belief that the move would be compliant with the Constitution will make fast-tracking a pipe dream.
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The consideration of a minimum unit price (MUP) for alcohol in the Western Cape should be "fast-tracked as an urgent priority", that province's premier Alan Winde has told the provincial legislature.

As part of an imminent overhaul of the Western Cape Liquor Act, "I can announce that we have now put 'per-unit-of-alcohol' pricing firmly on the table for consideration," Winde said.

"This will make it more expensive to buy alcoholic beverages with higher alcohol percentages; an approach which evidence suggests can be effective in preventing binge drinking."

Winde has been careful not to unequivocally commit his administration to passing MUP rules, while both campaigning for the idea and pre-emptively asserting that it would pass constitutional muster.

Floor-pricing for alcohol has been debated in academic circles for a decade, with champions arguing that its targeted nature makes it a better solution to alcohol abuse than just increasing sin taxes. While there is strong evidence that making all booze more expensive (by excises taxes, for instance) curbs drinking overall, the impact is higher on moderate drinkers than on binge drinkers – who have been consistently found to not be as sensitive to price as others.

One consequence is that the alcohol industry suffers from lower sales, while the various problems caused by too much booze are not mitigated to the same extent.

Floor pricing by unit of alcohol, on the other hand, makes the cheapest booze more expensive, and that seems to reduce heavy drinking, especially for drinks heavy on alcohol.

A recent study by the University of Cape Town suggested that a 10% increase in the price of alcohol would see moderate drinkers drink 4% less, while heavier drinkers would drink only between 1.5% and 2.5% less. It also found that moderate drinkers spend around six times more per drink than heavy drinkers.

The difference in price impact has been established in the real world, with some types of booze barely affected when prices go up. In the Canadian province of British Columbia, one study based on 20 years of data found, a 10% increase in minimum alcohol prices reduced consumption of beer by only 1.5%, while the drop off in alcoholic sodas and ciders was 13.9%.

To what extent that translates to, say, fewer car accidents, is not as clear, though one overview study found that "price-based alcohol policy interventions such as MUP are likely to reduce alcohol consumption, alcohol-related morbidity and mortality."

Likewise, a modelling exercise out of the UK found that "harmful drinkers" buy cheap booze, and would be most affected by MUP. If that group drank less, the authors said, that would "coincide with substantial health gains in terms of morbidity and mortality related to reduced alcohol consumption."

In 2018, Scotland introduced MUP, while the rest of the United Kingdom did not, providing fertile grounds for research directly into the impact on traumatic accidents and gender-based violence. In the meanwhile, data from purchases shows that households who bought the most booze before the MUP were most affected by its introduction, while poorer people overall were not disproportionally impacted.

That is exactly the kind of result the Western Cape will be hoping for. But Scotland also offers a cautionary tale, when it comes to fast-tracking. That country's Parliament passed the necessary legislation for alcohol floor pricing in 2012. It took five years for legal challenges from the alcohol industry to be dismissed.

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