Addressing the harmful use of alcohol - WHO Western Pacific Region

Addressing the harmful use of alcohol : A guide to developing effective alcohol legislation
Adjusting taxation to prevent increasing affordability
The effective price of alcohol to the consumer can also be affected by changing income levels
within a country. In times of increasing incomes, excise tax levels may also need regular
adjustment to ensure alcohol does not become more affordable (Rabinovich et al. 2009).
Setting excise tax rates to increase minimum prices
Awareness of the importance of the availability of lowest priced beverages has led to calls for
minimum pricing regimes (see below). A taxation system can also take into account minimum
prices if a monitoring system is in place to assess cheapest prices and base tax levels on
these.
Unrecorded alcohol
The effectiveness of raising alcohol taxes to reduce alcohol-related harm may, in some
countries, be undermined by a possible increase in illegal or unrecorded alcohol production or,
in some cases, by cross-border smuggling. The risk of this varies among countries.
Most countries of the Region have some level of unrecorded alcohol production on which tax,
for various reasons, is not collected. For example, Australia and New Zealand allow home
brewing or distilling for personal use only – around 4% of reported consumption in New
Zealand (Habgood et al. 2001). Production for sale and supply to others must be reported and
taxed. Many Pacific Island countries and areas as well as countries in Asia have traditions of
producing alcohol locally, some of which is fermented and some distilled. There may be issues
in regard to quality and toxicity, particularly as this informally produced alcohol is increasingly
for sale rather than for personal use. The existence of a widespread informal alcohol markets
threatens the viability of some of the more effective policy interventions of taxation and control
of availability.
In some countries with high levels of informal production, attention is being given to bring this
alcohol under regulation and taxation. Mongolia is currently doing so with a programme of
quality inspection and accreditation. Bringing home production under regulation may reduce
the number of producers, or it may encourage producers to move up to a commercial scale.
In South Africa and Japan, one outcome of regulation and taxation of village production of
traditional beverages is that global companies are now producing these drinks on an industrial
scale (Babor et al. 2010).
In Thailand, alcohol producers and importers are registered, licensed and taxed, so any
unregistered products – lacking excise duty stamps – are known to be illegally produced or
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