Levels of Alcohol Consumption within the UK - Essay Example

Question Current Levels of Alcohol Consumption within the UK and Comparison of these Levels with Consumption in up to 10 Other Countries. CurrentLevel of Consumption of Alcohol in the UK According to the figures compiled by the British Beer & Pub Association (BBPA) the consumption of alcohol has come down for the second consecutive year. The fall of 3.3 percent in the year 2006 is by far the largest single fall in a period of 15 years. The fall in the year 2006 follows the drop of 2.2 percent in the year 2005. The introduction of the new Licensing Act may be considered partially responsible for this decline. The consumption level of alcohol in the UK as of the year 2006 is shown below with a graphical representation of the data. UK - Consumption of Alcohol Year Litres Per Head of 100% Alcohol 1980 7.4 1990 7.9 1998 7.9 1999 8.3 2000 8.4 2001 8.7 2002 9.0 2003 9.1 2004 9.4 2005 9.2 2006 8.9 Source: The Union of Russian Brewers at http://www.beer-union.com/article.phpart=889&PHPSESSID=ffb521730703b0b98a43ee4c0adac40c There have been changes in the composition of the drinks also over the period of years. The changes are depicted in the following table: UK - Consumption of Different Alcoholic Drinks Drink 1980 1990 2006 Beer 60% 57% 43% Spirits 24% 22% 20% Wine 14% 18% 29% Source: The Union of Russian Brewers at http://www.beer-union.com/article.phpart=889&PHPSESSID=ffb521730703b0b98a43ee4c0adac40c From the table it may be observed that there is a considerable shift in the consumption pattern of the alcoholic drinks in the UK. Comparison of Alcohol Consumption of UK with Other Countries People in UK still consume less alcohol than most of their counterparts in the other Western European countries. The BBPA statistical handbook declares that 12 other Western European countries including France, Germany and Spain consume more alcohol than the people in the UK. However Italy and Greece record a lower level of consumption than the UK. (The Union of Russian Brewers) Comparison of Alcohol Consumption - Litres per Population - Aged 15+ Country 1980 1990 2000 2001 2002 2003 2004 Czech Republic 11.8 11.3 11.8 11.8 11.9 12.1 11.5 Denmark 11.7 11.7 11.5 11.4 11.2 11.5 11.4 Finland 7.9 9.5 8.6 9.0 9.2 9.3 9.9 Germany 14.2 13.8 10.5 10.4 10.4 10.2 10.1 Iceland 4.3 5.2 6.1 6.3 6.5 6.5 6.7 Ireland 9.6 11.2 14.2 14.5 14.3 13.5 13.6 New Zealand 11.8 10.1 8.9 8.8 9.2 8.9 9.2 Norway 5.3 5.0 5.7 5.5 5.9 6.0 6.2 Slovak Republic 14.5 13.4 8.9 8.7 8.8 7.4 9.4 Switzerland 13.5 12.9 11.2 11.1 10.8 10.8 10.7 United Kingdom 9.4 9.8 10.4 10.7 11.0 11.2 11.5 Source: OECD Health Data 2006 June 2006 Source: OECD Health Data 2006 June 2006 On a comparison of the levels of alcohol consumption Ireland has the maximum consumption of 13.6 litres and Norway has the lowest consumption of 6.2 litres. UK is in the second place while comparing all the other 10 countries. According to the data complied by the World Health Organisation the levels of consumption range from o.4 litres in Tajikistan to the highest level consumption in Luxembourg 17.5 litres per person per year. Question 2: Alcohol taxation has been suggested by the Social Justice Policy Group as one method to reduce binge-drinking within the UK; Arguments for and against alcohol taxation: Introduction Alcohol tax has no longer the ability to be employed as a means of controlling the levels of alcohol consumption and the resultant health hazards in the UK. At the most it is considered as the one of the main sources of tax revenue. At an earlier stage the government had rejected the idea that price of alcohol has a major influence on the levels of alcohol consumption. This advise was made to the government by a majority of scientific and public health organisations. The following are some of the arguments for and against the taxation of alcohol. Arguments in favour of taxing Alcohol: The government has the ultimate responsibility to provide enough finances to take care of the systems of education, health care, defence and other public services. In order that the government is able to get enough revenue several programmes of taxing the individuals and corporations have been undertaken in the past. There are many types of direct and indirect taxes to increase the revenue of the government. Out of the wide range of sources available to the government for taxing alcohol is one of the important means of adding up the revenue. But taxing alcohol has been supported as well as opposed by different strata of people in the country. Taxing alcohol has several advantages and accompanying disadvantages. Despite the added revenue people claim that taxing alcohol and thereby increasing the price would reduce the consumption of alcohol and the resultant harm to the human beings. Some of the views in this direction are presented below: According to Babor et al (2003) studies have revealed that increasing the price of alcohol is capable of reducing a number of road accidents some of which are fatal, injuries in workplace, deaths from spoiled liver, the number of crimes that include assaults, rapes, robberies and other social crimes. The example for the direct relationship between the price and health is exhibited by the fact that in the year 2004, Finland government reduced the excise duty by an average of 33 percent with a view to reduce cheap imports from abroad. With the result of the increase in the excise duty and the resultant reduction in the price of alcohol there was a 17 percent in alcohol related mortality equivalent to an additional death of 8 people due to consumption of alcohol. An important scientific review has concluded "Taxation of alcohol is an effective mechanism for reducing alcohol problems...The notion that heavy or dependent drinkers are immune to the influence of price is demonstrably incorrect. Put simply, but with entire scientific accuracy, alcohol taxation is a readily available instrument which can be applied to save lives and avert alcohol-related suffering." (G Edwards) Increased taxation would also have its impact on the Binge Drinking, since due to the higher prices people may be discouraged to drink more. "There is no consensus on the definition of binge drinking. In the past, 'binge drinking' was often used to refer to an extended period of time, usually two days or more, during which a person repeatedly drank to intoxication, giving up usual activities and obligations. In common usage, binge drinking is now usually used to refer to heavy drinking over an evening or similar time span - sometimes also referred to as heavy episodic drinking. Binge drinking is often associated with drinking with the intention of becoming intoxicated and, sometimes, with drinking in large groups." (British Medical Association) It is usually thought that the changes in the prices may not affect the drinking habits of heavy drinkers. But the fact remains that people who spend a large amount of their income on alcohol would definitely feel the pinch and be more sensitive to the sudden price increase and this might definitely affect their drinking habits to some extent. There is a lacking on the number of studies conducted in this direction in the UK. However a recent review of the available evidences provided the following result: "There is ample evidence that at the population level, alcohol consumption is responsive to pricemany studies have concluded that heavier drinkers are more responsive to price than non-heavy drinkers. Other studies indicate that there is an inter-relation between price and income, with young males on lower incomes being more susceptible to price elasticity than those on higher incomes. However there are still considerable gaps in the evidence." (K. Sewell) Arguments against taxing Alcohol: Taxing of alcohol though to some extent can reduce the consumption of alcohol there are some associated disadvantages in taxing and increasing the price of alcohol. The major disadvantage is that it will increase the illegal trafficking of alcohol between different countries. It encourages the 'black' market operations in alcohol and also leads to more bootlegging. The major disadvantage is that there will be increased supply of spurious alcohol and the consumption of which would altogether defeat the purpose of taxing alcohol, as the spurious alcohol would lead to more harm to the people consuming it. The major disadvantages of taxing and increasing the price of alcohol can be listed as below: (1) There is an imminent danger that the children may be lured into illicit liquor trafficking. (2) Increased crimes in the form of smuggling the liquor to cross border destinations (3) There will be more legal complications and strained relations between the countries due to the illegal liquor trafficking and in dealing with mafia (4) There will be more criminal and social crimes due to increased for the liquor dealers. (5) There will be dent in the revenue to the government since the proportion of the illegal trade in liquor may reduce the genuine tax revenue to the government. Conclusion A review of the arguments in favour of taxing alcohol indicates that such incidence of increased tax would not only add up revenues to the government but also has the added advantage of reducing the alcohol consumption. This is more than substantiated by several studies and this argument has the support from scientific and other public organizations. Considering the advantages resulting from taxing alcohol, it can be concluded that it is wise for the government to increase the tax on alcohol. This not only increases the revenue but also reduces the consumption to some extent which is a welcome move. The argument that increasing tax would trigger black market operations and will encourage mafia operations in smuggling illicit liquor across nations, does not hold good as such activities will be prevalent at any price level of alcohol. Reducing the tax or not taxing alcohol is not going to reduce the illegal activities connected with liquor or drug trafficking. Conversely by increasing the tax on alcohol there will be at least some downward trends in the consumption of alcohol. Hence the decision to tax alcohol and increase the price weighs more than the decision not to tax alcohol. Question 3 (a) Impact of the Introduction of Taxation on the Business Economy: The decision of the government to introduce taxation would have the following impacts on the business economy: (1) Increase in Tax Revenue: The most important effect of the introduction of alcohol taxation is the increase in the indirect tax revenue of the government. This will enable the government to embark on new economic policies and developmental activities. (2) Reduction in Alcoholic Consumption Higher rate of taxation increases the price of alcohol which will have some effect on the consumption of alcohol as people will be deterred to buy more quantity of alcoholic drinks due to increased prices. Saving in government expenditure on alcohol related crimes due to reduced consumption is a distinct possibility. (3) Overall Economic Growth With increased tax revenues the government would be able to provide more infrastructural facilities which in turn would increase the economic activities leading to an overall growth in the economy of the nation. (4) Increased Public Health Measures The alcohol tax systems enhanced with the specific view of public health purposes with higher taxes would enable the government to adopt a 'user pay' approach in dealing with the expenditure being provided for from the revenue earned from alcohol tax, (5) Important Policy Tools Taxation on alcohol is increasingly being used by several countries as important policy tools to control the activities of the alcohol industry and this also has been accepted by the alcohol manufacturers. (6) Benefits to the Community The community is also likely to be greatly facilitated by the reduction in the number of crimes. Even a small increase in the taxes and prices of alcohol would make the low and moderate drinkers to reduce or leave the habit of drinking. (7) Increase in Public Health "From a public health perspective, a reduction in consumption that reduces harm, particularly among young people and heavy per occasion drinkers, will have net benefits for governments. This is because current country alcohol tax rates are well below the direct fiscal costs of policing, health care, and health promotion and very much below the full social and economic impacts on society." (WHO 2006) Question 3 (b) Recommendations for Business Managers in the Hotel Industry about ways to respond to Introduction of Alcohol Taxation: With the introduction of alcohol taxation all the associated industries would be affected to some extent negatively. The following are some of the recommendations to the business mangers in the hotel industry to respond to the introduction of alcohol taxation: (1) With the anticipation of the introduction of alcohol taxation the business managers must expect a price increase in the alcoholic drinks. Passing on the complete impact to the customers may affect the sales and earnings. Hence a small reduction in the margin on the alcoholic drinks must be worked out by the business managers in advance so that there is no large loss of sales. (2) In order to make up the loss of revenue which is foregone due to the increase in the price of alcoholic drinks the managers may think of increasing the margin on the other items that usually are being sold with the liquor like soft drinks, soda, or other beverages. Normally the managers can expect the customers to compare the prices of the liquor which they were previously paying and now being charged after the introduction of the alcohol taxation. (3) The managers must make it a point that in parties where alcoholic drinks are consumed to recommend a proper mix of drinks which will maximize the revenue for the company. This depends on the skill of the managers in convincing the customers. (4) The managers should deal with the manufacturers directly to take advantage of cash discounts on purchases so that the cost of the alcoholic drinks can be reduced. The purchase in larger quantities can be considered. (5) It is also advisable that the managers identify those alcoholic drinks which are comparatively cheaper in the market are stocked at appropriate levels and promote those drinks to the customers by making proper sales talk. This may work with those customers who are not habitual drinkers. Part 2 - Evaluation of One Source For evaluation I have taken the article on 'Binge Drinking' presented by the British Medical Association. (Available at http://www.bma.org.uk/ap.nsf/Content/Hubhotpbingedrinking) This article elaborately deals with Binge drinking starting with the definitions of Binge Drinking. Being an article presented by the British Medical Association this article is rich in content. The style of writing is simple that enables everyone who reads the article to understand what binge drinking is and what impact binge drinking has on the health of those indulge in binge drinking. The article is evaluated on the basis of the source, content, and style of presentation, informativeness, and relevance to the situation. In all these considerations this article presents itself as a good representative for other articles on the same topic. The information and content of the article can be considered as rich as it is very useful from an academic point of view. Since the source of the article is British Medical Association, the source can be considered as authentic. The style of presentation is good and simple. Since it is not flashy it sounds more informative and makes the reader get engrossed in the content. The information content of the article is rich that much research has been done to collect the basic data and information. There can be no second opinion about the relevance of the article to the situation when there is continued debates going on about the taxation of alcohol taxation and it has a bearing on the binge drinking also. The only limitation that the article may be lacking is the empirical data as there are no much statistical information is provided in the article. References: Babor T et al, Alcohol: no ordinary commodity. Oxford Medical Publications, 2003 British Medical Association 'Caring for the NHS: Binge Drinking' http://www.bma.org.uk/ap.nsf/Content/Hubhotpbingedrinking G. Edwards et al (1994) Alcohol Policy and the Public Good Oxford Medical Publications/WHO Europe 1994 K Sewell (2002) International Alcohol Policies: A Selected Literature Review Scottish Executive Central Research Unit. Health and Community Research Programme Research Findings No. 15, 2002 The Union of Russian Brewers (2007) 'New Figures sow fall in Alcohol Consumption' Accessed from http://www.beer-union.com/article.phpart=889&PHPSESSID=ffb521730703b0b98a43ee4c0adac40c WHO (2006) 'Alcohol Taxation in the Western Pacific Region' http://www.shore.ac.nz/publications/Taxation%2013.9.06.pdf Read More