Wednesday, October 26, 2011

Alcohol is too cheap. It's doing us damage. Plans are underway.

Wine discounting and the cheap $5 cleanskin are in the sights of an informal coalition of lawyers, health professionals, and economists who met for the first time yesterday to draw up plans to raise the minimum price of alcohol.

Convened by the Foundation for Alcohol Research & Education, the Cancer Council of Victoria and the Melbourne Law School the forum discussed ways of building on the momentum of last month’s tax summit and the effective floor price in place for the past three months in Alice Springs.

Coles, Woolworths and IGA abandoned sales of cheap casks in Alice Springs on July 1 and now sell no wine for less than $8 a bottle, setting an effective minimum price of $1.10 per standard drink.

Russell Goldflam of the People's Alcohol Action Coalition told the forum recorded assaults in the Territory had fallen 20 per cent on the same period the year before...

The effective floor price was introduced at the same time as a banned drinking register making it difficult to untangle the contribution of each measure.

Indigenous affairs minister Jenny Macklin ruled out making the floor price mandatory in her visit to the Territory last week but health minister Nicola Roxon has asked her Preventive Health Agency to “develop the concept” nationally as part of an Australia-wide move against alcohol abuse.

A split has emerged within the industry with Treasury Wine Estates and Pernod Ricard, owners of the Penfolds and Jacob’s Creek brands breaking with the Winemakers Federation to petition the tax summit to tax wine per unit of alcohol as is beer. The move would more than double the price of a four litre cask and slice 10 per cent from the price of a top range Cabernet Sauvignon.

Economist John Marsden urged the forum to be careful about the harm the measure would cause the irrigated districts of Griffith, Mildura and Renmark that produce most of Australia’s boxed wine. Michael Thorn of the Foundation for Alcohol Research & Education said the effect on the Murray Darling Basin would be positive. It took 1000 to 1200 litres of irrigated water to produce one litre of cheap cask wine.

Several lawyers at the forum warned that a national floor price would be hard to get past the National Competition Council as it came close to government-approved collusion. Retailers would keep the extra margin rather than the government, as would be the case if the tax rates were changed. The Council would need to be assured there wasn’t an alternative way to curb sales.

Dr Marsden referred to preliminary estimates suggesting excessive alcohol consumption costs Australia $37 billion per year, $22 billion of it in harm to non-drinkers. Lifting the floor price would be particularly effective in curbing drinking among young people as they already spent almost all of their income.

Michael Livingston of Victoria’s Turning Point alcohol and drug centre said the only way a national floor price would get public support would be if moderate drinkers could be assured it wouldn’t touch the price of a $12 bottle.

Published in today's Age

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