Case for Change

The low price of alcohol is a key driver in our drinking culture.

Alcohol is now more affordable than it has ever been. Wine has particularly become more affordable. This means that is now takes us less time to earn enough money to buy a standard drink.

In New Zealand, off-licences are now selling approximately 75% of all alcohol. Supermarkets are big players in the retail market.

Having many outlets in a community results in competition, which drives prices down. Cheap alcohol cost lives.

Increasing the price of alcohol is one the strongest tools in our kete / basket to reduce harm. It is the most important.

The price of alcohol 

The price of alcohol is very closely related its consumption. Increasing the price of alcohol in our country is one of the most effective strategies to reduce consumption and harm.1

On average, people will drink less when alcohol is more expensive.

The retail environment has a huge impact on the price of alcohol. In New Zealand, supermarkets are major suppliers of beer and wine. In 2008, the two supermarket chains sold around 60% of all wine and just over 30% of all beer in New Zealand.2 It has been found that beer and wine sold in supermarkets is cheaper than the same product bought at bottle stores.2 Many bottle stores buy their alcohol for sale from supermarkets, given they cannot obtain the alcohol at the same price from their own suppliers.

In New Zealand, the affordability of alcohol from off-licences has been increasing over time.3 This means that it now takes us less time to earn enough money to buy an alcohol product.

When there are many outlets in a community, competition can force retailers to discount the price of their alcohol in their stores so that they can ‘win’ the purchase. Therefore, by reducing the availability of alcohol we can indirectly affect its price.

The large difference between the price of alcohol at on-licences (e.g. pubs and bars) versus off-licences also is related to harm in our country. In the case of spirits, the cost at on-licences can be about 9 times the price as it is from a bottle store. This is likely to contribute to off-licences in New Zealand now selling approximately 75% of all alcohol in New Zealand.2 It also means that more people drink in their homes or other’s homes, which can often be risky settings.

There are several ways that the price of alcohol can be increased:

  1. Increasing the taxes on alcohol 
  2. Implementing a minimum unit price at which alcohol can be sold 
  3. Restricting or banning heavy discounts on alcohol.

It is likely that we need a combination of all of the above approaches to increase the overall price of alcohol and reduce the alcohol-related harm.

Click this button to read more on    ALCOHOL EXCISE TAXES   MINIMUM UNIT PRICING

References - The price of alcohol

  1. Babor T, Holder H, Caetano R, et al. Controlling affordability: pricing and taxation. In: Babor T, Caetano R, Casswell S, et al., eds. Alcohol: No Ordinary Commodity: Research and Public Policy. Oxford: Oxford University Press; 2010.
  2. New Zealand Law Commission (2010). Alcohol in Our Lives: Curbing the Harm. Wellington: Author.
  3. Gunasekara, F. I., & Wilson, N. (2010). Very cheap drinking in New Zealand: some alcohol is more affordable than bottled water and nearly as cheap as milk. New Zealand Medical Journal, 123(1324), 103-107