Youth drinking & alcopops

This report on alcopops by Choice magazine is interesting. Basically youth consume such drinks without experiencing the taste of alcohilc beverages. The taste of alcoholic beverages is rather unpleasant to neophyte drinkers so vendors of alcoholic products market sweet-tasting, alcopops with a soft-drink or milk base and often laced with a tasteless alcohol product such as vodka, to encourage alcohol use among youth. Later these same youth will graduate to mainstream alcohol products.

This is an important marketing innovation since booze sales Australia-wide have stabilised in recent decades so that promoting a steady stream of new drinkers is the only way to expand booze markets. Although aggregate sales are stable problem drinking continues to increase – it is the second-largest cause of hospital admissions related to drug use (after smoking). I think this move is unambiguously a social bad and that the sale and marketing of alcohol products to youth should be much more strenuously regulated than it is at present. Industry self-regulation is a total joke.

Neuroscience suggests that it is best to postpone the consumption of alcohol until after age 25 when the forebrain has developed completely. Alcohol is a neurotoxin which kills brain cells and the incidence of alcoholism is strongly related to the age at which drinking is initiated – the earlier the greater the problem. We do not wish to have a community of dopey kids.

I reprint sections of the Choice report below. For accuracy it is worth pointing out that pure alcohol is tasteless although I know what Choice means here – alcopos do not have the strong flavours of adult alcoholic drinks. In addition it is worth stressing that many teenagers choose alcopops because they want to experience the effects of alcohol without the taste – so there need not be a deception here.

In addition to the usual charge that I am a hypocrite for seeking curbs on alcohol while being a drinker myself I plead partially guilty. I am a hypocrite but have the excuse of ignorance and being a product of my upbringing. In addition, of course, my hypocrisy has nothing to do with the case against alcohol abuse I frequently espouse. My hypocrisy is a little diminished of late – I have been entirely alcohol abstinent for a couple of months and - along with taking some regular exercise - I feel much better for it.

CHOICE test reveals 25% couldn’t taste the alcohol in alcopops

Teenagers find it hard to tell the difference between soft drinks and so-called alcopops, which are part spirit and part soft drink or milk, according to a CHOICE taste test.

Almost half of the teenage male taste test participants could not tell that Vodka Mudshake Original Chocolate, which is 4% alcohol by volume, contained alcohol.

Overall, one quarter of the participants, who for legal reasons were over 18, couldn’t taste the alcohol in alcopops, also known as ready-to-drink or RTD beverages.

In the test 78 teenagers aged between 18 and 19 were given four different alcopops, four soft drinks and a sample each of beer and wine, all in unmarked glasses. They also completed a survey about their drinking habits and some took part in focus groups to discuss alcohol and alcopops.

Referring to alcopops, one of the participants remarked: “I used to drink all of these when I was a bit younger… like when I was at school.”

The trendy packaging, colours and flavours were deemed attractive by teens, and the sweet flavours, which in the test included chocolate, raspberry, lemon and passionfruit, can mask the taste of alcohol. CHOICE thinks the regulation of alcopops marketing, and of alcohol more generally, doesn’t effectively protect teenagers.

“It’s clear from CHOICE’s test that the use of sweet flavours reduces the resistance many teenagers have to the strong and, to many of them, unpleasant taste of alcohol,” said CHOICE media spokesperson Christopher Zinn.

While there are codes of practice for the companies that produce alcopops and the advertising industry that promotes them, CHOICE says there are some gaps, notably the internet.

CHOICE found one vodka-based RTD promoted on a website aimed at girls, despite the policy of its maker only to target its brands at the 18-plus age group. The promo was removed after CHOICE pointed out to the manufacturer that its placement was inappropriate and conflicted with its policy.

Alcopops tax revenue refunded to who?

The alcopops tax has yielded a great deal of revenue although the bill justifying the tax may now not be passed by the Senate.  Apparently then the government has to return the revenue to the party who bore the tax.  The nominal incidence of such a tax is on the alcohol producers but, if demand is relatively inelastic - and that's what the solid revenue yields suggest - then the effective incidence is mainly borne by consumers so they should get most of the rebate.  It would, however, seem totally impractical to effect such rebates. 

I find it surprising that consumers are called upon to pay a tax that has questionable legality.  If the tax is not approved by the Senate that will be its status. I can't for the  life of me work out how Labor will get out of this mess.

To be clear I do support this tax and hope the Coalition will switch and vote for it. Its effectiveness will not be zero even if demands are quite inelastic.  Note that those who criticise it on the grounds that youth entirely switch to other sources of alcohol need to explain why the tax yields in fact such a lot of revenue. The existence of close substitutes suggests elastic not the inelastic demands that seem to prevail. Moreover this is consistent with average price elasticities on alcohol of around -0.6.

While the alcopops tax will not eliminate the problem of excessive youth drinking, it will help. Other measures - education and negative advertising - are a further useful component of a policy package.

Federal Budget 2008

I've been busy and found it difficult to assign time to assessing the budget. Clearly the Labor Party has inherited a fabulously prosperous economy - that the terms of trade is due to increase by so much over the next year is astounding and should dominate our impressions of where the Australian economy is going.

The bugdet response has been to award miserly tax cuts to lower income groups and to defer them for higher income groups and to run a massive budget surplus. Much of the surplus is to end up in investment funds to be spent on infrastructure, health and education.

This budget is therefore a beginning not an outcome. The main issues are how these funds will be allocated and how they will be spent when the economy is close to full employment. Project costs will be high so there is the prospect that returns on these investments will be under pressure. There is the possibility Labor will use them to pork-barrell in 2010 but they may surprise and spend the money wisely. It is a beginning.

Longer term these surpluses belong to the citizens of Australia not to the Labor Party. It is unsatisafactory for tax rates to be set so high that the government runs massive surpluses.

The funds can only be spent with a continued commitment to Labor market reform that prevents cost push inflation from emerging. The economy should be able to reduce unemployment still further and guarantee longer term better wages if the link between wages and prices can be broken.

I was less-than-impressed by the response of the Coalition to the budget. Malcolm Turnbull's responses on alcopops taxation added a bit of comic relief however. His claim was that the tax could not seriously target youth drinking because revenue to the government was forecast to increase with the tax! This is incorrect since the demand for alcopos clearly will slope downwards. The tax can still yield additional revenue if the price-elasticity of demand for alcopos is low enough. If the price elasticity is high then the tax will substantially reduce consumption but (contrary to the expectations of Treasury) yield less tax.

Update: John Quiggin makes a scathing attack on Brendon Nelson who has apparently followed Malcolm Turnull in criticising the alcopops tax. As I publicly supported the Government in increasing this tax two weeks ago I've got to agree with John that the criticism of the increased tax is foolish politics that suggests foolish policy sense. Taxes on alcohol in Australia are approximately volumetric which makes sense if you believe (as I do) that alcohol is a neurotoxin - they are not quite right however as the alcohol in beer is taxed less heavily than that in spirits. I favour a hefty tax on alcopos because these drinks are directed at youth and at ensuring an ongoing dependence on booze.

A case for increasing the minimum age for legal drinking

The proposal to increase the drinking age in Victoria from 18 to 21 is back on the table. It will be considered by the State government if current policy efforts to restrict binge drinking fail.

I strongly support the move to restrict youth access to alcohol with such a policy. Alcohol is a neurotoxin that has particularly damaging effects on the brain at ages up to 25. In addition those who start drinking early are more likely to become alcohol dependent and drinking is a major cause of traffic accidents particularly among the young – they are much more at risk than older drinkers. Most importantly alcohol abuse at young ages delays development of the thinking parts of the brain.

The claim that such policies are sometimes ineffective is true but irrelevant. Making it illegal to consume alcohol at age less than 21 increases the user costs of gaining illicit supplies and provides an obstacle to youth drinking. It also sends out a negative message that can be backed up with empirical evidence of the neurotoxicity of alcohol for consumption at young ages.

I also strongly support bans on the advertising of alcopops and related alcoholic drinks that appeal to youth. Industry codes of conduct won’t work since the adult alcohol consumption market is declining and the industry depends on addicting young drinkers for its growth. I agree with Chris Berg of the IPA that advertising of alcopops is informative advertising which introduces young consumers to new products. But the information provided is misleading in that it does not warn adequately of the health risk dangers of drinking while young and falsely suggests a range of benefits associated with drinking alcohol.

By the way it is claimed that keeping the US drinking age at 21 cuts the road toll among 18-20 year olds by 13%. Despite this many US states are thinking about reducing the age limit.

The Federal proposal to put warning labels on alcohol containers can do no harm. The literature on deterring kids from smoking however suggests that the best way to deter kids from drinking excessively however is to portray drunken kids as losers which of course they are. The best costs to emphasise are those that relate to current fitness and social acceptability. Absolutely there should be no suggestion that excessive drinking is something that adults only can engage in.

To the standard charge when I make these posts that I am a hypocrite because I drink myself (or did* drink) I say balderdash. That has literally nothing to do with the issue being discussed which relates to the case for allowing young people to damage their brains. The issue of my own hypocrisy – or indeed stupidity - is irrelevant to this.

* I’ve been off the booze for 2 months 24 days. Researching the booze issue has changed my own attitude to the stuff.

Increased tax on alcopops

The Australian Government's decision to increase the excise on so-called alcopops by 70% is excellent news. These sweet flavoured alcoholic concoctions are intended to create another generation of heavy drinkers in the face of a steady state decline in the demand for booze.

The industry is targeting kids who will suffer permanent brain damage from excessive alcohol use. This tax - which will add about $1 to the price of this rubbish - will help combat this.

The liquor industry ranks with the tobacco vendors as one of the most immoral in our society. Anything that damages their profitability and long-term prospects advances the social welfare. It is also useful that shareholders in these nasty businesses wake up to the long-term difficulties that these firms seeking to create alcohol dependencies will experience. You were warned!

Advertising booze to kids

Crikey.com today discusses industry self-regulation of restrictions on advertising alcohol to kids. They claim this self-regulation is a farce – a proposition I agree with.

‘You need look no further than this ad for Tooheys New to see why Australia has a nasty drinking problem. The ad features a street party with giant inflatable figures in happy bright colours and could easily be mistaken for a toy promotion - until the beer truck arrives'.

The industry’s self-regulatory Alcoholic Beverages Advertising Code – is a joke. A recent study published in Drug and Alcohol Review in January searched 93 magazines popular with youth, two-thirds of which contained at least one alcohol ad or promotion (including one featuring skateboards). 51% of these items appeared to contravene at least one section of the code.

Voluntary regulation won’t work if firms have an intrinsic motivation to not enforce it. The industry emphasises flogging their drugs to kids because sustained growth in the alcoholic drinks market requires growing numbers of youth develop a taste for booze. Across age groups Australians are not drinking more. Moreover, youth are being successfully targeted by industry so their growth objective is being achieved through sweet-tasting alcopops and so forth that help youngsters graduate from soft-drinks to alcohol.

There are good theoretical foundations and abundant evidence that marketing booze to kids is very effective – US research suggests a complete ban on advertising booze could reduce teenage drinking by 25% and binge drinking by 42%. Moreover, there is evidence alcohol causes specific brain damage in youth. A blanket ban on advertising to youth is justified and industry self-regulation will not work.

Governments must intervene. Real leadership from Mr Howard and Mr Rudd (or a cooperative agreement!) would see them both agree to take on the liquor industry to reduce hazardous levels of drinking among youth.

Booze & kids

The debate over whether alcopops are designed to adapt the tastes of immature sugar-loving adolescents to drinking booze is ridiculous. Of course this is the intention. Who else would drink these sugary nasties!

Booze consumption in Australia has stabilised over recent decades so the only way to grow the market is to create a new generation of boozers.

The 'insider' revelations that the industry is targeting youth published in the press this morning should not surprise anyone. This is exactly parallel to the strategy of tobacco companies seeking to promote youth smoking - with reduced social acceptibility of smoking among adults and with high mortality from smoking the only way to grow this market is to encourage youth smoking.

Alcohol doesn't cause lung cancers but it does induce other cancers and does cause brain damage - 6 drinks a day over 8-10 years puts a male at high risk of damage.