Neo-temperance movement accused of economic illiteracy over alarming study
The neo-temperance lobby has had plenty of joy in securing column inches after firing out a bizarre press release accusing the alcohol industry of promoting harmful drinking.
Anti-alcohol lobbyists at the Institute of Alcohol Studies teamed up with the University of Sheffield’s Alcohol Research Group to create an alarming study.
This is the same Alcohol Research Group that was caught out for massaging evidence to push through a reduction in UK alcohol guidelines.
The academics in the team changed their model at the behest of Public Health England to change the results of a study that led to the Chief Medical Officer reducing alcohol consumption guidelines for British men from 21 units to 14 units per week.
Now that same team has helped the IAS produce a study claiming that “revenue from alcohol sales in England would plummet by £13 billion if consumers complied with the recommended drinking guidelines”. The guidelines it helped change in dubious fashion.
The researchers claimed that “if everyone stuck to the recommended limit of 14 units a week, alcohol sales revenue would decline by 38%”.
It made the bizarre claim that to “mitigate this loss”, the price of a pint in a pub would need to be whacked up from an average of £2.64 to £6.15, while the price of a bottle of spirits in the off-trade would need to double.
Aveek Bhattacharya, a policy analyst at the IAS and lead author, said: “Alcohol causes 24,000 deaths and over 1.1 million hospital admissions each year in England, at a cost of £3.5 billion to the NHS. Yet policies to address this harm, like minimum unit pricing and raising alcohol duty, have been resisted at every turn by the alcohol industry. Our analysis suggests this may be because many drinks companies realise that a significant reduction in harmful drinking would be financially ruinous.
“The government should recognise just how much the industry has to lose from effective alcohol policies, and be more wary of its attempts to derail meaningful action through lobbying and offers of voluntary partnership.”
The Institute of Alcohol Studies was formed from the ashes of the UK Temperance Alliance in the 1980s, which itself was formed out of the ashes of the UK Alliance for the Suppression of the Traffic in Intoxicating Liquors, which was set up in the 1850s.
Its good friend at the Alcohol Health Alliance, Ian Gilmore, said: “For years the alcohol industry has presented itself as part of the solution, not the problem, when it comes to harmful drinking. This research shows that their business model is fundamentally reliant on encouraging millions of people to risk their health by drinking above government’s own recommended limits.”
The study was picked up by titles like The Guardian and The Independent.
Yet there are many glaring holes in this analysis: revenue is not the same as profit, so there is no way the industry would lose £13 billion. A good £14 billion of the £35 billion that Brits spend on alcohol each year goes to the taxman and is reinvested in public services. That far outweighs the £3.5 billion the anti-alcohol lobby claims is spent by the NHS on treating people with alcohol-related hospital admissions, and those claims are widely disputed too.
The industry would also be producing fewer drinks, dramatically reducing its costs, so again it would not be losing out to the extent claimed by the IAS.
“It is so laughably inept that I can’t believe even a ‘public health’ journal would publish it,” said Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs. “This is utter drivel that betrays not only economic illiteracy but a total inability to understand the basics of business.
“Based on alcohol sales of £35 billion, they say a 38% drop would make the industry lose £13 billion. But it wouldn’t because £35 billion isn’t the [alcohol manufacturing] industry’s profit, nor even its turnover. It’s the total spent on alcohol, and that money goes through a lot of hands before the manufacturers get their cut.
“So here we have a study in a peer-reviewed journal looking at an economic question and the authors don’t know the difference between revenue, turnover and profit, and seem not to have heard of the marginal cost of production. Or the Pareto Principle, for that matter.
“Before the guidelines were changed, I warned that the limit would be lowered in order to inflate the number of ‘hazardous drinkers’ and resurrect Britain’s moral panic about drinking. That is exactly what has happened and the authors of the study, most of whom were instrumental in getting the guidelines changed, have taken full advantage.”
Snowdon calculates that industry losses would be closer to £1 billion and would be considerably lower if, as is likely, people switch to more expensive brands as their consumption falls.
“The government, meanwhile, would lose around £5 billion,” he said. “Who has the biggest conflict of interest?”
The latest Office for National Statistics data shows that alcohol consumption continues to plummet in the UK, binge drinking is declining and more than a fifth of Brits are teetotal.
John Timothy, chief executive at the Portman Group, said: “In the last decade or so binge drinking has fallen by nearly a quarter and alcohol-related violence, drink-driving casualties and acceptance of drinking among children have also fallen significantly.
“Drinks producers have contributed to this decline through their commitment to encouraging moderation through the development of a wide range of low and no alcohol products and the removal of over one billion units of alcohol from the market.”
A government spokeswoman appeared to brush aside the anti-alcohol lobbyists’ demands for higher taxation on alcoholic drinks, saying: “This country already has some of the highest taxes on spirits compared with other European countries, and the UK chief medical officer’s guidelines are available to help adults to make informed choices about their drinking.
“We have been very clear to industry that we expect them to reflect this guidance on alcohol labels and continue to engage with them on this.”
Snowdon lays into this study in depth here.