Trade hits out at recommended 10% tax hike

A new report by an international economic organisation recommending alcohol tax is hiked up 10% has been called “badly flawed” US trade body Discus.

President and CEO of Discus, Peter Cressy, speaks out against recommendations in the latest OECD report

Peter Cressy, president and CEO of the Distilled Spirits Council of the US (Discus), called the strategy outlined in the Organisation for Economic Cooperation and Development’s (OECD) report, which was proposed as a means of curbing excessive consumption, “misdirected”.

“Numerous studies show that raising the price does not deter heavy alcohol abusers,” Cressy said.

“Rather, it is the moderate consumer who cuts back the most when prices are increased. Additionally, raising taxes invariably leads to an increase in illegal and potentially poisonous illicit alcohol in some countries.”

In the OECD report, named “Tackling the harmful use of alcohol – Economics and public health policies”, the Paris-based research body, estimated that excessive alcohol consumption results in yearly losses of around 1% of GDP in most developed economies, and observed that it rose to become the fifth leading cause of death and disability across the globe between 1990 and 2010.

In addition, the report found that binge drinking is now responsible for more deaths than HIV/AIDS, violence and tuberculosis combined.

However, the credibility of the report has been called into question by Discus, due to the use of data that the OECD acknowledged “may be of limited quality”.

Cressy explained: “This model was based on assumptions that have not been tested by the scientific community and was heavily criticised by the National Institute on Alcohol Abuse and Alcoholism (NIAAA), the lead US federal agency on alcohol and health.

“The distilled spirits industry is strongly opposed to abusive alcohol consumption and has long supported evidence-based policies in partnership with governments and other stakeholders in these efforts to reduce harmful use of alcohol in the United States and abroad.”