The Government has the chance to overhaul our outdated and unfair alcohol duty system to protect health

Lucy Holmes | November 2020 | 9 minutes

As promised in their 2019 manifesto, the Government has embarked upon a review of alcohol duty – the tax levied on alcohol sales. Alcohol Change UK is calling for a fairer system of tax that protects health, reduces harm, and covers the enormous cost of alcohol to our NHS and public services.

Alcohol costs our society a huge amount, both in the harm it causes to individuals, and in money. While alcohol costs the UK upwards of £27 billion every year, the tax paid on alcohol - known as ‘duty’- puts just £12 billion back into the public purse. [1]

Global evidence shows that increasing the price of alcohol is an extremely effective way of reducing alcohol harm across a population. [2] Recent research from the Alcohol Health Alliance [3] highlighted how cheaply alcohol can be bought in England. The Chief Medical Officers recommend not regularly drinking more than 14 units per week, but this research found it's possible to buy that amount of alcohol for less than £3. In the UK there are two main policies available for raising the price of alcohol: setting a minimum unit price (MUP) and increasing alcohol duty.

At the moment, the alcohol duty system does too little to protect health and fails to raise enough money to balance out the cost of alcohol harm. Last October, a guest blog from the Institute of Alcohol Studies explained how unsuitable the current system is.

As well as helping to reduce harm, a better system of alcohol duty could generate additional revenue for the nation – money that could be spent on our NHS and other public services. It’s no surprise that people in the UK support increasing alcohol duty if the money raised is directed towards public services - like the NHS and police - that are negatively affected by alcohol use. [4]

The current system of alcohol duty in the UK is illogical, too complex, and unfair.

How should alcohol be taxed?

The Government has heard our message and has committed to reviewing the alcohol duty system. We, along with other organisations working to reduce the harm caused by alcohol, are calling for a number of changes to be made to the way alcohol is taxed:

1. Alcohol duty should at least cover the costs of alcohol to society

As we look ahead to how we emerge from the coronavirus pandemic and enter a phase of recovery, it’s vital that we reduce the burden alcohol creates on our public services and society as a whole. Alcohol must be taxed in proportion with the harm it causes.

2. Alcohol should be taxed according to strength

To have the greatest impact on health, the duty system should recognise that stronger drinks create more harm and should be taxed at a higher rate per unit than lower-strength drinks. This would encourage producers to reformulate their drinks and create better quality drinks at lower strengths.

3. Alcohol duty should be consistent across drink types

The current system treats beers, wines, ciders and spirits differently, resulting in a system where alcohol of the same type is taxed the same no matter its strength - for example, high-strength white ciders are taxed at the same rate as lower-strength ciders, and 14% ABV wines pay the same tax per bottle as 10% ABV wines. This creates a market for cheap, high-strength products, which do the most damage to health. The system should be consistent across drink types, rather than giving some preferential treatment.

4. Alcohol duty should automatically increase in line with inflation or earnings

To ensure it always performs a harm reduction role, duty can’t be indefinitely frozen or allowed to stagnate. Implementing an automatic increase would make sure progress is made towards reducing harm and improving health, year-on-year.

Increasing duty cannot end the harm caused by alcohol alone. Further evidence-based policies like MUP, filling the gap in funding for treatment services, and restricting alcohol marketing and availability, are all needed if we are to address the unacceptable levels of harm alcohol causes to our society.

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[1] Burton, R. et al. (2016). A rapid evidence review of the effectiveness and cost-effectiveness of alcohol control policies: an English perspective. The Lancet and HM Revenue and Customs and HM Treasury (2020). Alcohol duty review: call for evidence.

[2] World Health Organisation (2017). Tackling NCDs: “best buys” and other recommended interventions for the prevention and control of noncommunicable diseases and Public Health England (2016). The public health burden of alcohol and the effectiveness and cost-effectiveness of alcohol control policies.

[3] Alcohol Health Alliance (2020) Small change: alcohol at pocket money prices: AHA pricing survey 2020

[4] In October 2020 the Alcohol Harm Alliance commissioned a YouGov poll of 1,846 participants, which found that 56% of the public support an increase in alcohol if the revenue raised was used to fund public services, with just 21% being opposed to an increase.