A new study from the Canadian Centre on Substance Abuse has three key recommendations to reduce risky drinking, including a minimum price for alcohol in Canada. The study recommended prices be based upon three principles—index alcohol prices to inflation, base prices on alcohol content to encourage lower strength products and focus on minimum prices to remove inexpensive sources preferred by youth.
Gerald Thomas, senior research and policy analyst at CCSA, explained demand for alcohol is an inverse relationship with price, like it is with most other goods.
“The data is clear—if the price of alcohol goes up, people buy less and consume less,” Thomas said. “That principle would particularly apply to young adults who don’t have a lot of disposable income, [and] who are also some of the heaviest drinkers, so [consumption] would be quite reduced because they just can’t afford it.”
These policies aren’t meant to raise prices on all alcoholic drinks, and they wouldn’t actually have much of an effect on most consumers.
“What we’re talking about is not raising prices across the board, but looking into each system and [find] where relatively high strength, low price products have emerged from their pricing system and making sure that the alcohol doesn’t fall below a certain minimum price per standard drink,” Thomas said.
Pricing has the biggest effect on consumer behaviour and these policies limit both regular heavy drinking, as well as occasional binge drinking, especially in high-risk groups, such as young adults.
“To deal with risky drinking you have to deal with both groups, the regular heavy drinkers and the occasional heavy drinkers,” Thomas said. “These pricing mechanisms are designed, in the case of minimum prices, to target heavy [drinking] regular consumers. The others, indexing and pricing on alcohol content, are more general for the moderate risk group.”
Higher prices may be the answer to limiting binge drinking, however, Ron Scarfone, general manager at Joe Kool’s, said there’s little bars can do to combat it, and increased prices would have an adverse effect on business, especially in this economy.
“There is not so much binge drinking in bars, per se. Most of that binge drinking goes on elsewhere at home parties. Our average sale, at a place like Jim Bob Ray’s, would be 1.9 drinks per night per person, so you really couldn’t fit that into a binge drinking situation.”
These recommendations are already put into practice in Canada and around the world.
“All of these policies already exist somewhere. For example, Ontario already automatically indexes its minimum prices to inflation. Saskatchewan, in 2010, implemented policies very much like we’re asking for. They have probably the most advanced pricing system in Canada and they reduced consumption by about eight million beers in one year.”
Thomas stressed these policies aren’t prohibitionist, but they are trying to encourage safer drinking consumption.
“Women should drink no more than two drinks a day and 10 drinks a week, and men no more than three drinks per day and 15 a week.”