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Last Updated: Wednesday, 4 January 2006, 00:01 GMT
Price rises 'do not cut drinking'
Person drinking alcohol (generic)
The study suggests cheaper drinks should be targeted for price rises
Increasing the price of alcohol does not necessarily cut consumption, according to a study.

A team at the US Prevention Research Center looked at alcohol sales in Sweden between 1984 and 1994.

They said the market was complex and that sometimes price rises led to consumers drinking more as they switched to cheaper brands.

The researchers called for cheaper drinks to be targeted for price rises, the journal Alcoholism reported.

Report author Paul Gruenewald said the alcohol market was sophisticated with many varying prices for different beers, wines and spirits.

Evidence does suggest it is not always sensible just to rise prices across the board
Professor Martin Plant,
University of the West of England

"Our results show that higher alcohol prices may and may not cause reductions in alcohol sales and related problems," he said.

"The same tax may have different impacts in different markets and with different distributions of prices."

The researchers found that when the prices of more expensive drinks rose, consumers simply switched to cheaper alternatives, while price hikes at the lower end of the market cut sales.

They examined sales by Systembolaget, the state monopoly supplier of alcohol in Sweden until 1995, and found that when prices were raised by 10% across the board, it led to a 1.7% fall in sales.

When price increases were weighted towards the most expensive drinks, but still equated to an overall 10% rise, sales rose by 2.8%.

But when the cost of the cheapest drinks were increased, sales fell by 4.2%.


The researchers said government policies should take into account the potential freedom of consumers to change their drinking habits.

They said targeting cheaper drinks would be better than price rises across the board.

The price of alcohol compared with the cost of other goods has been falling in the UK since the 1970s.

But the period has also seen a rise in alcohol consumption and alcohol-related deaths - more than 6,500 people die each year from conditions such as liver disease and alcohol poisoning.

Professor Martin Plant, an alcohol expert from the University of the West of England, said the price of alcohol had undoubtedly had an impact on consumption.

"Evidence does suggest it is not always sensible just to rise prices across the board," he said.

"Australia have looked at raising the cost of strong beers as a way of curbing consumption."

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