Does alcohol tax design actually make alcohol less affordable? Evidence from 17 countries

What is it about?

Alcohol taxation is one of the most effective tools available for reducing alcohol consumption and related harm, and it is believed to work primarily by making alcohol less affordable. This short communication from the International Alcohol Control (IAC) Study examined two key indicators of alcohol tax policy across eight high-income and nine middle-income jurisdictions: the proportion of the lowest retail price accounted for by tax, and the affordability of alcohol relative to national income. Collaborators in each country populated an online Alcohol Policy Tool to provide data on tax design, tax rates and the lowest available retail prices for take-away alcohol. The study found that high-income jurisdictions had higher tax-to-price shares and higher affordability on average than middle-income countries, and that across the full sample the two indicators were not correlated with each other, suggesting that tax share of price alone does not reliably predict how affordable alcohol is to consumers.

Featured Image

Why is it important?

Alcohol taxation is endorsed by the WHO as a high-impact policy and sits at the heart of global alcohol harm reduction strategies, yet there is surprisingly limited evidence on which tax designs are most effective at reducing affordability or which indicators best allow countries to monitor and compare their taxation systems over time. This study, drawing on data from 17 jurisdictions across high- and middle-income settings globally, reveals a critical gap: the assumption that higher tax-to-price ratios translate into reduced affordability does not hold across this international sample. That finding directly challenges how taxation policy is evaluated and compared internationally, and has practical implications for governments designing or reforming alcohol tax systems. The development of standardised, cross-nationally comparable affordability indicators is identified as an urgent research and policy priority.

Perspectives