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Experts Discuss the Effectiveness of Increased Tax on Premixed Spirits

The Australian government should be given a pat on the back for a new regulation increasing the tax on premixed alcoholic drinks. The move is part of a series of efforts geared towards minimizing the prevalence of excessive drinking in the country.

Two specialists from the National Drug and Alcohol Research Centre in the University of New South Wales, Sydney came out with their opinion on The Lancet with regards to this tax law. In their comment, Dr Christopher Doran and Dr Anthony Shakeshaft discussed the effects of raising the excise duty on premixed spirits by 70%. The government implemented the said increase in April of this year.

The excise increase raises the question about whether consumers of premixed spirits will simply switch their preferences to purchasing unmixed spirits or cheaper beverages. Across the whole population, switching to unmixed sprits is unlikely to be a major issue, because even if all current drinkers of premixed spirits switched to unmixed, they would still comprise a small market share (about 30%) relative to beer drinkers (about 66%). The doctors also added that the switch is unlikely to occur because spirits are still popular choices in 45% of young drinkers in the country, aged 16-17 years old. And this is in spite of the fact that spirits are the most expensive alcoholic products available in the market. Raising the prices on these beverages is not enough to make them inaccessible to binge drinkers.

As a whole, both experts say that the Australian government is on the right track with this policy but the smaller market for spirits will not pull the overall binge drinking rates down. This said, increasing excise tax on spirits is but a small step. If anything, this is a manifestation that the government is actively doing its share in improving public health.

The idea of standardized tax is promising, at any rate. This initiative should be supplemented by other supply and demand concepts. The experts recommend that the government devised a series of strategies such as incentives to get manufacturers to produce and promote mid-strength to low-strength beer, restrictions that would limit the accessibility of highly alcoholic beverages and tweaking the advertising codes of practice a bit more.

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