The price of alcohol 

Alcohol use is very closely related its price.  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. Those most often found to be affected by (or sensitive to) the price of alcohol are heavy drinkers and young people. Because these groups are at high risk of alcohol-related harm, increasing the price of alcohol to reduce consumption can bring many benefits.

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 [3]. 

In New Zealand, the affordability of alcohol from off-licences has been increasing over time [4]. 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 [5]. It also means that more people drink in their homes or other’s homes, which can often by risky settings.

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

  1. Increasing the taxes  on alcohol, please click here. 
  2. Implementing a minimum unit price at which alcohol can be sold , please click here. 
  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 here for a factsheet on excise taxes and minimum unit price.