Preliminary assessment of the economic impacts of alcohol pricing policy options in the UK

Alcohol has an important economic and socio-cultural place in the UK. It creates jobs,

generates fiscal revenues in the form of alcohol taxes, and contributed around £2.7 billion2

in 2007 to the economy through trade (ONS, 2007b). Alcohol is shared in social

interactions, and is drunk as an accompaniment to meals. While alcohol has been, and

continues to be, consumed in an unproblematic way by many people, a proportion of

alcohol consumption is problematic and generates harms for individuals and society.

Alcohol misuse is high in the UK policy agenda. According to data from the World Health

Organization (WHO), alcohol consumption in the UK increased by approximately 4

percent between 1985 and 2003, whereas it decreased over the same period for most other

European Union countries (Rabinovich et al., 2009). At the same time, some alcoholrelated

harms have grown over this period; for example, there were 8,758 deaths from

alcohol-related causes in the UK in 2006, twice as many as there were 15 years before

(National Audit Office, 2008).

While there is a large body of literature focusing on the variety and extent of the public

health and criminal justice impacts of alcohol use, its economic impact has received

relatively less attention. In order to help Government assess the full range of implications

from proposed alcohol pricing policies, RAND Europe has undertaken this study to

provide evidence in the area of potential economic impacts of the following three pricing

policy options: minimum pricing, ban on below-cost sales, and taxation.