The New Prohibition

Judging by recent reports, we’ll soon see an end to the bargain-basement booze we’ve apparently been enjoying way too much of for our own good. The Government has indicated it will take steps to end the practice of bulk-discounting and below-cost selling of alcohol by big supermarket multiples.

Roisin Shortall, Minister of State at the Department of Health, has in recent months repeatedly stated her intention to introduce minimum pricing, increased taxation or a combination of both, in order to reduce what she describes as excessive consumption.
“Irish drinkers,” she said last week, “lost the run of themselves and the time is right to tackle this problem.” On RTÉ’s Morning Ireland, the Minister insisted that “middle-aged women are having two, three or four glasses of red wine before going to bed while older men are drinking too many pints.”
Is this move to make alcohol more expensive justified? Or is it a typically hysterical “nanny-state” reaction to a problem that is both exaggerated and much more complex? Is alcohol really all that cheap in Ireland anyway? And will raising the price have any meaningful effect on curbing alcohol abuse?
Alcohol Action are one of several organisations backing the call for minimum pricing. According to the charity’s CEO, Fiona Ryan, “Ireland is one of six countries where alcohol has become more than 50% more affordable in the past 15 years. We know that the big multiple retailers are using alcohol to attract in customers and passing the cost onto other products.”
There is no doubt that the relative price of alcohol, particularly in off-licences and supermarkets, has fallen in recent years. But prices in Ireland are still nowhere near the kind of low levels that are available in say, France, Germany or Holland – where take-away alcohol is incredibly cheap, without causing the sort of problems that are perceived to arise here.
Add the fact the Irish excise rate on beer is more than double the EU average and the rate on wine is over three times the EU average, and the evidence that alcohol is too cheap here is totally unconvincing. The notion of “affordability” is all relative anyway. Alcohol may have become nominally cheaper, but it’s at a time when disposable incomes are plummeting due to wage cuts, unemployment and tax increases, not to mention a whole raft of levies and charges coming our way.
Sean Byrne, a lecturer in economics at the Dublin Institute of Technology, is the author of the HSE report ‘Cost To Society Of Problem Alcohol Use In Ireland’, which calculates the cost of alcohol abuse to the State at €3.7 billion annually. In the report, he also makes the case for minimum pricing.
“There is a paradoxical situation in Ireland in that the ‘money’ price of alcohol is high compared with other countries,” he explains. “However, the amount you can buy with a certain level of earnings has fallen sharply. When you add the dramatic increase in availability at petrol stations, convenience stores and elsewhere, then you have a problem.
“Consumption is down, but the pattern of drinking has changed,” he adds. “There is a lot less drinking in pubs and more drinking at home.”
Is consumption guaranteed to fall if a minimum price is introduced?
“It isn’t,” he admits, “but there is strong evidence that making alcohol cheaper and making it more widely available increases consumption, particularly with people on low incomes. We know with absolute certainty that a way to stop the increase in consumption is to make it more expensive and less easily available.”
What’s so wrong with the notion that cash-strapped adults can now enjoy their tipple of choice at prices closer to European levels, rather than the high prices we were used to in the past?
Fiona Ryan: “I suppose it would be fine if we were drinking at moderate levels but we’re not. We have a real problem in this country and when you have 20-year-olds showing up in hospitals with liver disease, it’s time to do something. We might be going through tough times but I don’t think cheap booze is the answer.”
The campaign to support a minimum price on alcohol is just one of many such campaigns being waged by self-styled health lobbyists in an effort to reduce alcohol consumption. In 2008, new provisions in the Intoxicating Liquor Act restricted closing times for off-licences and made late-night licenses prohibitively expensive, shutting down many venues in the process.
2011 also saw a ramping up in the media war on alcohol. Almost daily, there were media reports about our growing binge-drinking culture, and how it is destroying the health of the nation – not to mention the very fabric of society. Last May the Irish Examiner issued a 20-page special supplement devoted to the subject, while RTÉ and the Irish Times in particular have been to the fore in the campaign.
Many of these stories are sensationalist in nature and are often recycled versions of already issued reports. They usually begin with, “…a shocking new report on underage drinking has revealed …” or “…a new study on our binge drinking culture…” etc. There was predictable criticism from the usual quarters of the decision to bring President Obama for a pint in Moneygall and Queen Elizabeth II to the Guinness Storehouse, despite the fact that tourism figures shot up in the wake of the coverage of both visits.
Only last week there was a contrived spat between opposing sides when the head of a parents’ organisation suggested it was okay for parents to teach their teenage children to drink responsibly in the home – a proposition which would strike many people as plain common sense.
The upsurge in anti-alcohol campaigning is not just an Irish phenomenon. It has an international dimension, especially in the US where campaigners have been successfully targeting alcohol in a number of key areas. In his piece ‘The New War On Social Drinking’, columnist Radley Balko, an award-winning journalist who has written for Time, the Wall Street Journal and the New York Times, warned about “a creeping prohibition” in the US, which was being achieved by stealth. “There’s a new anti-alcohol fervor afoot,” he wrote. “Though a return to formal prohibition seems far-fetched, a slightly modified, back-door prohibition is feasible and probably already within reach.”
He went on to point out how “the new temperance movement in the US has pushed for – and won – a wide range of anti-alcohol initiatives across the country, including higher taxes on alcohol, zoning laws that restrict bars or limit their concentration in certain areas, bans and severe restrictions on alcohol advertising and increasingly aggressive drink-driving laws.”
Could this happen in an Irish context? Groups such as Alcohol Action and others certainly have a lengthy wish-list of objectives apart from minimum pricing, which if achieved would signal the kind of scenario outlined above.

One of the oft-repeated facts touted whenever the subject comes up for discussion is that our “drink problem” is costing us €3.7 billion annually in harm. This figure, often rounded up to a cool €4 billion, is variously attributed as an avoidable cost to the State, to the Exchequer or to society as a whole. It is readily accepted by the media without any analysis whatsoever and continues to be quoted ad infinitum.
Where did this figure come from? How is it calculated and how certain can we be of its accuracy? Sean Byrne, author of the most recent report to cite the figure of €3.7 billion, acknowledges that most of the figures and statistics used to compile the report are not his own, but taken from various other reports – and that many are estimates with, in some cases, UK figures being transposed into an Irish context.
Even within the report, it’s acknowledged that some of the figures and estimates are “tentative”. The use of the word “tentative” to describe information that may be used to effect changes in legislation is a pretty strong disclaimer and should set off alarm bells. The dictionary definition of “tentative” includes words such as “conditional”, “uncertain”, “debatable”, “disputable”, “questionable” and “doubtable.” Hardly the basis for legislative change...
Some of the statistics – for example the figures for alcohol-related road deaths – are almost a decade old and would, surely, have declined substantially since that time. More surprisingly, the cost of these alcohol-related road accidents which is put at €530m (over half a billion) is not the cost of hospital treatment or of property damage, as you might expect, but a notional cost, based on an assumed price on the value of a life.
“Yes, it is a notional value and it’s a contentious one,” Byrne agrees. “It’s based on say, a man of 30 who is killed in a road accident and what he would have contributed economically for the rest of his life. There is an assumption that he is making an economic contribution, which isn’t always the case”.
In fairness to Byrne, the Irish figures in the HSE report are broadly in line with other such reports from various other countries. But as is the case here, they tend to emanate from a relatively small group of ‘health’ (for which we can often substitute anti-alcohol) economists and lobbyists. Rarely are these reports subject to any kind of critical analysis by the media or by independent bodies. Except in New Zealand, it seems, where a similar report on the cost of alcohol was forensically dissected and found to be exaggerating the cost by up to a factor of 30!
In March 2009, a report, ‘Costs Of Harmful Alcohol And Other Drugs’, commissioned by the New Zealand Ministry of Health calculated annual social costs of alcohol alone at NZ$4.8 billion. The report was cited by the Law Commission as evidence in support of greater regulation.
However, in a subsequent analysis of the report by Department of Economics and Finance, College of Business and Economics, University of Canterbury, Christchurch, New Zealand, enormous and hugely serious deficiencies were discovered. They found that “methodological errors” accounted for approximately 40% of the listed costs, for example where there was double-counting, incorrect use of multipliers, not accounting for cohort differences between serious alcoholics and the rest of the population in labour-force characteristics, and assuming an implausibly large reduction in crime in the absence of alcohol.
It also criticised the report for using an epidemiological basis to define the threshold for economic harm. (This threshold is crossed in New Zealand after 1.8 pints of beer. Anything above is considered harmful and therefore a cost to society – an astonishing claim!) The report also failed to take into account the many economic and health benefits of moderate alcohol consumption and was therefore not a cost/benefit analysis. Such was the level of errors found that the researchers called their investigation into the report: ‘The Price Of Everything And The Value Of Nothing’.
It was both a damning and unprecedented criticism of an official government report and it made the headlines in both New Zealand and Australia. ‘Social Costs Of Alcohol Are Vastly Inflated’ was the title of a story by Chris Kenny in The Australian newspaper in July 2011, which quoted one of the authors of the investigation, Eric Crampton, as stating the obvious fact that, “consumers of alcohol choose to drink for their own benefit, therefore any negative impacts on themselves, such as a shorter lifespan or accident and injury, are private costs and not public burdens.”
Surely some food for thought in an Irish context?