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Last Updated: Tuesday, 26 October, 2004, 22:56 GMT 23:56 UK
The Booze Business: Consuming Spirits
By Joanna Lee
BBC Money Programme

Girls' night out in Newcastle
Young women make up the fastest growing booze market
The 30bn drinks industry is suffering a bad hangover from the effects of binge drinking.

Government figures say alcohol related problems are costing the country around 20bn a year and pressure is mounting on the booze business to sort out the problem.

The government upped the ante earlier this year with its Alcohol Harm Reduction Strategy and is calling on the drinks industry to stop encouraging binge drinking.

Even insiders say that the industry must act.

Simon Loftus, chairman of Adnams Brewery, is all too aware of the problems.

"I'm quite sure that if the industry can't agree voluntary and effective codes and somehow police the rogues, then we will face legislative action," he says.

On the tiles

Some parts of the industry are taking steps which they say address the problems.

Corky's shooter
The market for shots designed to be downed in one is flourishing

Diageo, the biggest drinks producer in the world and the company behind Smirnoff, Guinness and Baileys, run education initiatives on sensible drinking.

JD Wetherspoon, a pub company with 640 pubs, has changed some of its prices to avoid encouraging excess and other retailers have abandoned excessive price promotions and happy hours.

But is this filtering down to drinkers in bars and clubs across the UK?

A group of young women out on the tiles in Newcastle say the message isn't getting through to them.

"I'm not really sensing that the alcohol industry are really pushing us to drink less to be honest," says Kim Wilson, a 21-year-old claims handler.

Bonus

And why should they?

Industry takings rely on the sale of alcohol and the more they sell, the better their profits.

Kim Wilson, a 21-year-old claims handler, enjoys a drink
Kim Wilson does not think drinks makers really want her to drink less

So the industry has a few nifty tricks up its sleeve to keep the cash rolling in.

Companies like Urbium, which owns chains like Tiger Tiger, runs happy hour to get punters in with the promise of cut price drinks in otherwise quiet periods.

They say it's traditional and good for business, but the critics say it encourages binge drinking by tempting the customer to drink more.

Chains like Tiger Tiger also keep the cash rolling in by paying incentives to their bar staff who meet sales targets.

Bar managers can earn up to 50% on top of their regular salary, so the more booze you sell, the greater the chance of getting a good bonus.

Girls' night out

The industry has also been quick to spot and take advantage of new consumption trends.

Laura and Kim enjoy a night out in Newcastle
Nearly 40% of all vodka is consumed by the under 24s.

Young women have become the fastest growing group of booze consumers and provide a great opportunity for increased profits.

Over a third of women in their twenties are binge drinkers and their fondness for products like vodka and cocktails have helped drive spirits sales.

The vodka market has grown 25% in the last ten years and nearly 40% of all vodka is consumed by the under 24s.

Down in one

Another part of the market which is flourishing is shots - often vodka based and designed to be downed in one. Sales reached just 3m in 1997 but have now soared to 100m.

But critics have expressed concern about shots. Gerard Hastings, Professor of Marketing at Stirling and Open University, believes they encourage binge drinking.

"They are promoted in what can only be described as incredibly irresponsible ways," he says.

"In the last week, I've come across a pub in the north of Scotland offering 6 shots for 4 and those shots had to be drunk through a straw all at once."

Legislation threat

As pressure mounts on the industry, they say they're not the only ones to blame in the growth of binge drinking.

Don Goulding, managing director of Diageo GB says, "it's only by engaging everyone - from producer, through retailer through government through police and licensing hours - that we can really tackle the issue and we're starting to make some inroads.

But the critics like Mr Hastings say the industry should face up to the problem.

"I think the way things are going at the moment, the industry is going to have to take reasonably dramatic action to convince policy makers they are serious about tackling this issue," he says.

And the clock is ticking.

Ofcom, the advertising regulator, will clamp down on drinks advertising next month.

The government is monitoring closely and is likely to legislate if the industry cannot put its house in order.

The Money Programme, The Booze Business: Consuming Spirits will be broadcast on Wednesday 27 October at 19.30 on BBC 2.


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