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Health the casualty of Coles and Woolies alcohol price war

In recent days, Woolworths and Coles have put out a flurry of media releases, each staking a claim to being the cheapest place to buy alcohol this summer. Coles have “declared war” on liquor prices and…

The real cost of the alcohol price war is the damage heavy drinking does to public health and the social fabric. Rick Audet

In recent days, Woolworths and Coles have put out a flurry of media releases, each staking a claim to being the cheapest place to buy alcohol this summer. Coles have “declared war” on liquor prices and the Woolworths-owned Dan Murphy’s chain has fired back a response.

For the consumer, this all sounds like great news – an alcohol price war in the lead-up to Christmas. But for public health and safety, it’s worth thinking about the real cost of discounted drinks.

Beyond price

Recent estimates put the social cost of alcohol in Australia at around $36 billion a year. Approximately half of these costs come from harms experienced by people other than the drinker.

Alcohol contributes to a vast array of problems including cancer and liver disease, assaults, car accidents and other injuries, family dysfunction, neighbourhood disturbance and fear.

Recent work undertaken in Victoria demonstrates that problems from alcohol are increasing rapidly. Ambulance attendances, hospital admissions and assault rates have all increased by more than 50% in the last decade. And, crucially, a key driver of rates of alcohol problems is price.

Studies from around the world have shown that rates of alcohol harms are affected by the cost of alcohol. Heavy drinkers and young people are particularly responsive to price changes. A recent meta-analysis highlighted the links between price and a wide range of harms, including hospitalisations and deaths, traffic accidents, violence and other crime and risky sexual behaviour.

It seems that there’s no such thing as a cheap drink.

Race to the bottom

In spite of this evidence, Woolworths and Coles have spent the last 12 months in a race to the bottom on alcohol prices. In March, both companies were only stopped from selling beer at below-cost price by pressure from manufacturers.

In April, the companies engaged in a price-war on pre-mixed spirits, selling a variety of brands at below wholesale prices.

Now, with schoolies week, the Christmas party season and New Year coming up (a peak time for alcohol-related harm), we see both Coles and Woolworths-owned retailers advertising cut-price alcohol. This includes some popular wines being sold for less than $1 per standard drink.

Known harms

Retailers are well aware of the problems associated with cheap alcohol.

Coles won’t offer these discounts in the Northern Territory or the north-west region of Western Australia: there are considerable problems with alcohol in these areas and this is a promising acknowledgement by the company that cheap alcohol will not help reduce them.

But alcohol is not merely an Indigenous problem. The most recent national survey data estimates that one in five Australians drink at levels that put them at risk of long-term harm from alcohol. Nearly one in three regularly drink at levels that put them at risk of injury.

microraptor/Flickr

Of course, Woolworths and Coles are merely engaging in standard business practices. The $25-billion alcohol market in Australia is the focus of increasing competition, and these two retailers are already dominante that market.

Despite the rhetoric of responsibility and community-mindedness, the companies are focussed on maximising their profits. That’s why it’s necessary for governments to deal with the issue of alcohol price.

Regulatory options

A smarter approach to alcohol taxation has been recommended for both economic and public health reasons by recent government reviews. This measure has also been shown to be the most cost-effective intervention available to reduce alcohol-related harm in Australia.

But despite these evidence-based policy suggestions, the Federal government has taken alcohol tax reform off the table as a policy option.

Alternatively, governments could impose a minimum price per standard drink for alcohol, cutting down the harm associated with discounting practices, such as those currently being undertaken by Coles and Woolworths.

Join the conversation

13 Comments sorted by

  1. Dale Bloom

    Analyst

    Drinking alcohol is not exactly necessary, and there are many jobs that now require 0.0 blood alcohol concentration. This includes any operator of plant such as an excavator operator, and any driver of a transport vehicle such as a taxi driver. There are also whole worksites that require 0.0 blood alcohol concentration for every worker on that site, such as mine sites.

    I believe 0.0 blood alcohol concentration should also be an obligation for politicians and members of the public service, and it should also be an obligation for teachers and university academic staff, to set a life-long example for their students.

    Nothing is as good as leading by example.

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  2. Mischa Tropp

    Warehouse Manager

    Hi Micheal,

    I have two questions for you, but before i ask them i want also qualify the part of your article in regards to the meta analysis of the affects of alcohol price on public health, the article is written by authors with the University of Florida drawing upon 12 different databases because they haven't stated which databases they are I am assuming that they are all within America which has a lot of social and socio economic problems which I believe play a massive part in alcohol abuse…

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  3. Michael Livingston

    Post-Doctoral Research Fellow at The University of New South Wales at UNSW Australia

    Hi Mischa - the meta-analysis includes all the studies that the authors could be find internationally. It's true that research into alcohol problems has tended to happen more in countries where alcohol has historically been seen as problematic (the US, UK, Canada, Australia and the Nordic countries), but the findings are broadly consistent and fairly robust. And, indeed, Australia is more similar than not to the countries where these studies have taken place.

    I'm not sure what the root cause is…

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  4. Janet Hammill

    Senior Indigenous ethnographer child health health researcher at University of Queensland

    Michael, thank you for this viewpoint. It seems the alcohol producers have everything in their favour, no holds barred, and they most certainly have stepped up their advertising campaign as seen with "Dan Murphy's Fine Wine Guide", a glossy 36 page liftout in a recent Courier-Mail weekend edition. It was followed two days ago in "The Weekend Australian Magazine's The Wine Issue". Although Phillip Adams did manage to have his say on page 74.
    What is concerning for me, and you did not mention it…

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  5. Margo Saunders

    Public Health Policy Researcher

    While I am not across the health aspects (including cancer risk) associated with the consumption of low-alcohol products, it would seem that low-alcohol products would be a reasonable option for consumers who still want to 'drink' at home or in social situations and are not drinking to get drunk. Yet products such as low-alcohol wines are not on offer at licensed premises and come only at a premium in bottle shops, where they are usually hidden in some obscure corner, and are certainly not promoted…

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    1. Michael Livingston

      Post-Doctoral Research Fellow at The University of New South Wales at UNSW Australia

      In reply to Margo Saunders

      Janet - the foetal aspects are definitely a concern.

      Margo - low alcohol products have a lot of promise. It used to be that low alcohol beer received substantial tax breaks and was thus a *lot* cheaper than mid- or full-strength beer. Under this regime it grew to as much as 25% of the Australian beer market, with undoubted benefits in terms of reductions in pure alcohol consumption and related problems.

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    2. Dale Bloom

      Analyst

      In reply to Michael Livingston

      Non-alcoholic beer is available from most supermarkets, and is often sold next to cordial bottles. I personally find it better in taste than many brands of alcoholic beer, and it is less expensive.

      Unfortunately it seems to have a high diuretic effect. If someone could research and develop a non-alcoholic beer with minimal diuretic effect, it could be worth a fortune, and it would mean that non-alcoholic beer could be sold in pubs, and also made available at functions and social gatherings. It would be justifiable research.

      Certainly universities should be taking the lead for once, and be making available non-alcoholic beers, wines and spirits at functions, or completely banning the consumption of alcoholic beverages from the campus grounds.

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  6. Janet Hammill

    Senior Indigenous ethnographer child health health researcher at University of Queensland

    Margo and Michael, the National Guidelines on alcohol use during pregnancy recommend no alcohol at all. While this may seem harsh and unnecessary for some pregnant women, for others low aclohol wine could be the tipping point. This is especially so given the considerable variations in complex metabolic makeups of each woman. For instance, when looking at some women's vulneranility for adverse foetal programming, it is essential to consider several generations of her ancestors and the lifestyles they…

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  7. Margo Saunders

    Public Health Policy Researcher

    I attended an end-of-year event yesterday at which non-alcoholic champagne was one option on offer. It was drinkable (but not brilliant) and provided that festive look in the glass. Really, once you've got a glass in your hand and look sociable, does anyone really care what's in it? Young people have explained to me that in licensed premises, when you go up to the bar to order a drink, you just automatically order what you've been drinking -- you don't even think about something non-alcoholic. And…

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    1. Dale Bloom

      Analyst

      In reply to Margo Saunders

      “once you've got a glass in your hand and look sociable, does anyone really care what's in it?”

      True.

      Lemon, lime and bitters is a suitable replacement for spirit drinks at social functions. It can be ordered from a bar and normally costs very little, and few people seem to mind if someone is drinking it.

      Alcohol is the drug most responsible for drug related deaths amongst teenagers. It is not ecstasy or heroin, but alcohol. There is an obligation on people such as teachers and university lecturers to be telling young people that they themselves don’t drink alcohol, and someone does not have to drink alcohol to have good time.

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  8. Janet Hammill

    Senior Indigenous ethnographer child health health researcher at University of Queensland

    Some interesting news that came in overnight - Canada’s first national low-risk alcohol drinking guidelines, outside poregnancy, have been approved by all Health Canada and supported by their Public Health Association, Medical Association and liquor producers.
    The edict advises women should consume no more than two drinks most days, up to 10 a week, and men should consume no more than three drinks most days, up to 15 a week.
    Non-drinking days should be purposely set aside to prevent habitual drinking and for special occasions:
    “Reduce your risk of injury by drinking no more than three drinks (for women) or four drinks (for men) on any single occasion.”
    Can you imagine going into an outback pub and suggesting that to the drinkers? I know, as someone who grew up in the bush, I would be laughed out of town. It is probably the same in the city.
    Let's have more advertisements like those of Hugh Jackman drinking tea. It's a great drink.

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  9. Margo Saunders

    Public Health Policy Researcher

    I haven't read the new Canadian guidelines, but I wonder if/how such low-risk alcohol guidelines take into account the warnings issued by cancer agencies about the links between alcohol consumption and cancer (for which there seems to be no identified 'safe' consumption level)? The International Agency for Research on Cancer has classified alcohol as a Group 1 carcinogen and the US National Cancer Institute has noted that cancer risks increase after about one daily drink for women and two daily drinks…

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  10. John Hopkins

    Social Engineer

    Neither of these retailers should be selling THE most DEADLY DRUG THE WORLDF HAS EVER KNOWN with more than ONE BILLION PEOPLE DIRECTLY KILLED throughout the whole of human history.

    Cannabis on the other hand has killed ZERO.

    There are NO health benefits whatsoever from Alcohol, it ONLY causes damage to living organisms.

    Cannabis on the other hand DEFINITELY EXTENDS ONES LIFE if consumed regularly.

    Cannabis also kills Cancer cells while leaving normal cells untouched.

    Our country is SO backwards & that's all due to the Alcohol Addicted Ministers & their Police Thugs who rule over us with an Iron Fist.

    It's way past time to crush this Feral "Iron Fist".

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