Addressing the harmful use of alcohol - WHO Western Pacific Region

Addressing the harmful use of alcohol : A guide to developing effective alcohol legislation
Dedicated Foundation for alcohol control purposes
1) The purpose of this Act is to:
a) provide for the establishment of a health promotion foundation having as its primary
objective the reduction of harms related to the use of alcohol;
b) define the Foundation’s functions and powers; and
c) make provision for the funding of the Foundation’s activities by means of a levy on
alcohol imported into or manufactured in (country).
Minimum pricing
Rationale
There is evidence that the heaviest drinkers and young people, in particular, seek out lower
priced alcohol. The affordability of alcohol can be affected by alcohol marketing strategies
based on price discounting and also by situations and policy changes that result in lower
prices. There is evidence that raising the minimum price of the cheapest beverages can be
an effective way of reducing alcohol-related harm and that it will be especially effective in
influencing heavy drinkers (Babor et al. 2010).
Large retailers, such as supermarket chains, have the ability to purchase in bulk and then sell
alcohol very cheaply to draw people into the store. These are known as ‘loss leaders’ (i.e.
below cost). In New Zealand, for example, the bulk buying power of the two big supermarket
chains means ‘specials’ can cost less than the wholesale price to other alcohol retailers
(New Zealand Herald 2010). This kind of discounting has led some high-income countries,
such as Scotland, to consider a minimum price approach.
A minimum price policy sets a floor under price competition. It does not dictate all pricing,
and may not affect the pricing of many products. It does not intervene in other aspects of fair
competition, such as quality, service or profitability.
Minimum pricing policies
A number of governments have set minimum sales prices to reduce rates of alcohol problems,
although currently the practice is not common. It is most easily done in jurisdictions where
government monopoly alcohol outlets can alter retail prices to meet certain objectives.
Minimum prices have also been set by regulating privately owned retail outlets and at the
wholesale level by licensing or other regulation of producers or importers (Babor et al. 2010).
There is little research that directly measures the impact of minimum pricing. However, the
effectiveness of minimum pricing as an intervention can be inferred from the alcohol tax
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