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A taxing question by Jeremy Beadles of the WSTA

Published:  18 January, 2007

To use football parlance - it was a game of two halves last week.

On Tuesday, I was able to welcome a revised European Union strategy to support member states in reducing alcohol-related harm, which recognised that alcohol taxation was not the most effective way of reducing alcohol misuse. However, by Friday the subject had been reintroduced by Patricia Hewitt MP, the Secretary of State for Health, who had decided to give an exclusive story to a group of young children interviewing her for a children's newspaper.

It was nice, for once, that when a European strategy document was launched it did not realise all our worst fears. In fact, many of the industry's key concerns have been taken on board during the internal consultation process.

The Strategy to Reduce Alcohol-Related Harm recognises that member states have the main responsibility for alcohol policy and does not propose any new harmonised legislation.

The European Commission sees its primary roles as coordinating and disseminating good practice across the EU and it will be setting up an Alcohol and Health Forum, bringing together experts from stakeholder organisations and representatives from member states, other EU institutions and agencies to provide input for and to monitor implementation of the strategy.

We are pleased the EC has recognised that the issue is not alcohol itself but addressing misuse and harmful drinking behaviour by consumers, and that there are different cultural habits related to consumption in the various member states. We are particularly pleased that there are no specific plans related to taxation or product labelling and that the EC recognises the importance of joint industry/government work at a national level. Officials in DG Sanco, the EU Health and Consumer Protection Directorate General, have obviously listened to our concerns in these areas.

The EC does not intend to implement the strategy through specific legislative proposals, but by encouraging member states to take action at a local level on a number of alcohol-related themes, including young people and children, road accidents and the impact of alcohol misuse on the workplace.

The communication also reflects the efforts of the trade to improve consumer education on all aspects of alcohol. The Wine & Spirit Trade Association is at the forefront of this agenda.

However, it is important to recognise that this debate is not over. Many non-governmental organisations have voiced their disappointment at the lack of legal and fiscal intervention. Now the EC has had its say it will soon be time for the European Parliament and the Council of Ministers to get involved, and we can expect taxation, bans on advertising and promotion, and labelling requirements to make appearances during the process.

The issue of taxation was raised on Friday when I was asked to comment on Patricia Hewitt's call for a tax increase on alcohol to curb binge drinking in the UK. It was obviously a slow news day because the story was picked up by the newspapers, TV and radio. My first reaction was surprise that an announcement of this nature had been given as a scoop' by the Secretary of State to a group of 7- to12-year-olds. The Government and the alcohol drinks industry have been working closely on a range of issues aimed at tackling alcohol misuse, including the Drinkaware Trust, Challenge 21 campaign and the Know Your Limits campaign, and increasing levels of taxation has not been mentioned at any point.

I was reassured by the Treasury's initial statement tax is a matter for the Chancellor'. I was even more reassured by its later statement which explained that tax on RTDs and spirits are linked and therefore to increase tax on RTDs by 10p would translate into a duty increase of 1.70 for most spirits, and to unravel the current taxation structure to allow RTDs to be taxed more heavily than spirits would take at least two years.

When debates like this are being played out on television some of the important points are often missed. The industry recognises that there is a cultural problem with alcohol misuse in this country but we do not believe that taxation is an effective route for tackling it.

A lot of the evidence suggests harmful drinking behaviours are still prominent in countries with the highest levels of alcohol taxation. The Scandinavian countries have very high taxes but they still have serious problems with alcohol misuse, home brewing and distilling, and legal and illegal importation of alcohol from abroad.

The UK already has high alcohol tax rates compared to other countries, and there is no evidence to suggest that targetting one particular product category over another will have any impact on overall consumption or harmful patterns of consumption.

It is to be hoped that the First News scoop Health Minister targets young binge drinkers with secret alcohol plan' does not reflect a change in government policy. But you can be sure we will be asking for a copy of the secret plan.