Wednesday, September 23, 2020

Alcohol abuse AND tax increase! What are the facts?

There is substantial anecdotal evidence of the detrimental effects of alcohol abuse in Botswana and in other countries. Recently in Mochudi increased rates of divorce, road accidents and defaulting in medication have been attributed to alcohol abuse. In Britain age standardized death rate from alcohol related diseases increased sharply from 1991-2006, reflecting the increased availability and affordability of alcohol in the same period.

While there are people in some quarters who are of the view that government actions on alcohol abuse is infringing on peoples civil liberties, it is important to realize that the role of the government is to take informed actions for the good of the population – even if there are a few loud opposing voices [or invariably, infringements on their liberties!].

It is important to remember that this is the same government that acted swiftly during the time when HIV/AIDS was ravaging the continent by taking stern action to contain the eminent danger posed by HIV/AIDS and today we are reaping the benefits of such action. In other countries like South Africa, who had policy actions driven largely by civil liberty concerns; they acted cautiously and are now struggling to catch up with the impact of this epidemic.

It is a fact that alcoholic beverages production and sales have over the years created jobs and wealth for many in our economy. It is also true that alcohol if abused is detrimental to the health and societal development of all. The big question then is; are we going to sacrifice our health, morals and future because of alcohol abuse?

Action by government to increase tax on alcohol is another way of dealing with problems associated with alcohol abuse that I mentioned earlier. There is compelling evidence for the effectiveness of raising alcohol prices through taxation and other means in order to limit alcohol abuse. In Finland for example, when tax on alcohol beverages was increased mortality and morbidity related to alcohol decreased. What is also striking is that during economic down turns expenditure on alcohol per capita significantly declines, perhaps due to an acceptance by the population of the related opportunity cost resulting in decisions that money is better spent on other goods.

I concur with recent arguments that the hike in alcohol taxes impacted the alcohol industry negatively. The arguments support the evidence that, if alcohol is not affordable then consumption would decline. Some however, argue that the recent rise in alcohol tax punishes those who are responsible drinkers. Conversely, evidence from other countries indicates that the top 30% of drinkers consume as much as 80% of the total alcohol by volume. I therefore hold the view that, if responsible drinkers are purported to be so responsible, then they would get their priorities right. And the effect of high alcohol prices will arguably only target the abusers.

Another big question is; what is the role of alcohol manufacturers in alcohol intake and abuse? Next installment…

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The Telegraph September 23

Digital edition of The Telegraph, September 23, 2020.