Minimum alcohol pricing: Canada’s accidental public health strategy

Your friendly neighbourhood liquor store down Toronto way. Joseph Morris, CC BY-SA

I have watched with fascination as successive UK and European governments have pledged to make cheap alcohol a thing of the past by introducing minimum unit pricing or MUP.

David Cameron announced his support for a 40p per unit floor price in early 2012 only to backtrack almost a year later in the face of opposition from within his cabinet and intense lobbying from multinational drinks groups.

But his government is quietly supporting Scotland’s legislation against complaints brought to the EU commission by the Scotch Whisky Association (on behalf of multinational drinks corporations).

Cameron aims low

The Cameron Government is also from Sunday taking a tiny tottering step to limit cheap alcohol by banning below-cost sales, a soft measure likely to make very little impact. Meanwhile both the Republic of Ireland and Estonia have announced their interest in MUP as a means of reducing their serious alcohol-related problems.

Minimum pricing was an idea forged in Canada and used for decades principally to stabilise provincial alcohol markets. Like most Scandinavian countries and many US states, Canadian provinces have operated government alcohol monopolies which they soon discovered to be a reliable and rich source of revenue.

Minimum pricing – sometimes known as social reference pricing – was introduced to protect an increasingly important revenue stream. Price wars by retailers could create havoc with provincial government budgets and minimum pricing was the perfect antidote.

A limited variation of this policy is also being employed in some US states where governments set minimum mark-ups or profit margins on the wine and/or spirits they distribute and sell in local markets.

A team from the University of Sheffield was commissioned by the UK Department of Health in 2006 to estimate the impacts of policies like minimum pricing. Drawing upon Canadian policy analyses, I advised them that minimum pricing should be calculated according to the amount of alcohol in beverages - the stuff that does the harm.

The group modelled the social, health and economic impacts of a minimum price for a unit of alcohol (8g of ethanol or roughly half a pint of beer, a shot of spirits or a small glass of wine) and the concept of MUP was born.

Canadian findings

But does minimum pricing have any benefits for public health and safety in Canada despite the entirely financial motivation for its implementation? A Canada/US/UK research team has published a series of studies using Canadian alcohol sales, health and crime data sets. They show significant but quite small effects on alcohol consumption in British Columbia which has had a piecemeal, erratic approach to updating minimum prices across the years.

By contrast in Saskatchewan, minimum prices were increased across the board in early 2010 with the rates of these adjusted according to alcoholic strength. An 8.4% reduction in consumption was observed for each 10% increase in the minimum price, with a shift towards lower alcohol content beers and wines and greater profits for government and wholesalers. Senior police reported alcohol-related crime to be halved.

Other studies in British Columbia have shown a 10% increase in minimum prices to be associated with a 9% reduction in acute alcohol-related hospital admissions (for injuries and poisonings, for example); and a similar but delayed reduction in admissions for alcohol-related diseases.

Significant impacts on alcohol-related deaths have also been reported and evidence of crime impacts is awaiting publication. In every case the observed impacts have been larger than those estimated by the excellent but conservative University of Sheffield models.

Policy differences

There is a huge variation across Canada in the way minimum prices are set. Saskatchewan gets top marks for a comprehensive system linked to alcoholic strength; the Atlantic provinces (including Nova Scotia and New Brunswick) have the highest rates; Ontario indexes minimum prices annually to the cost of living; Québec indexes minimum prices but only for beer; Alberta has minimum bar prices; British Columbia will soon introduce higher minimum prices linked to alcohol strength in order to offset more convenient access to alcohol.

And while the public health and safety motivation for regulating the affordability of alcohol has been largely forgotten in North America, there are signs this is being rediscovered. A modern approach to alcohol policy in this century may look a little like the proposed British Columbia approach: more convenient access but tight restrictions on cheap alcohol.

Maybe this is a small price to pay for saving lives and preventing serious injuries and illnesses. But will the EU accept that sometimes public health trumps free trade? The multinationals must see MUP as a dangerous precedent - otherwise they should support it because it will certainly increase the profitability of their alcohol businesses.

Indeed some oppose MUP on principle because it would increase profits to the alcohol industry. The way I see it, it’s just a win-win - and if MUP comes to pass I guarantee governments will find a way of taking a little of those extra profits back.