RTD Tax Hike is Working: Medical Journal

02 March, 2009 by

By Ian Neubauer

An editorial published in the Medical Journal of Australia (MJA) claims there is strong evidence the RTD tax hike is working to cut alcohol consumption and improve public health.

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The MJA disputed reams of empirical and anecdotal evidence collected over the past 10 months that suggest RTD drinkers switched en masse to other categories of alcohol following the introduction of the RTD tax hike last April.

It said that while some substitution had taken place, the overall number of standard drinks consumed had fallen 2.7 per cent, citing Nielsen data from May, June and July last year.

“Critics have argued that the RTD tax increase has not reduced alcohol consumption by young people, and will not do so,” the MJA said. “One claim is that young people will merely switch to other beverages. These arguments have been made by some from the alcohol industry and some researchers… They also argued that overall rates of usual or binge consumption in Australia are unlikely to substantially fall.

“[But] the weight of scientific evidence suggests otherwise — that overall consumption is likely to decline because young people’s demand for alcohol is elastic.”

The editorial said in a range of countries, price increases have been shown to reduce alcohol consumption and related harms in both the general population and at-risk populations. It concluded the RTD tax hike was an “evidence-based strategy”. 

However, Distilled Spirits Council of Australia (DSICA) spokesperson, Stephen Riden, said the editorial was flawed as it relies on data gathered too soon after the tax hike came in.

“It normally takes six months or more for consumption patterns to fully shift and we are certainly seeing a different result from the market data coming in at the moment,” he said.

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