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Change Liquor Taxes to Reduce Alcohol Problems

November 16, 2006

Source: University of Victoria

Taxes on reduced-alcohol beer, wines and spirits should be lowered to encourage healthier consumer choices, says a new study by the Centre for Addictions Research (CARBC) at the University of Victoria.

The study examines the country’s alcohol tax system and recommends a number of ways to protect the health and safety of Canadians through "discerning and purposeful" reforms of liquor taxation and pricing policies.

It notes that despite the proven link between alcohol consumption and risk of injury and chronic disease, there are currently no tax incentives in place for Canadians to choose lower alcohol beer, cider, wine-based or spirit-based products.

"A 3.5 per cent beer is taxed the same amount as a 7 per cent beer," says UVic psychologist and CARBC director Dr. Tim Stockwell, who co-authored the report with research associates Jaili Leng and Jodi Sturge. "In fact, the rates of taxation per standard drink are substantially higher on lower alcohol varieties than on high-strength beverages."

In other words, weaker drinks attract higher rates of taxation than strong drinks. "This is directly counter to what is considered healthy public policy involving alcohol," says Stockwell.

In addition, the market for lower-alcohol products—those between 2.5 and 4 per cent alcohol by volume—is significantly under-developed in Canada. "It’s no surprise that beers below 4 per cent alcohol constitute only 0.15 per cent of beer sales in BC," says Stockwell. "And it’s almost impossible to find lower-alcohol beers on the province’s liquor store shelves."

Contrast that with Australia, where taxes are reduced on lower-strength beers. Ten per cent of that country’s beer sales are brands between 2.5 and 3.5 per cent alcohol, and there are almost 40 varieties to choose from.

Alcohol-related deaths in Australia are declining, whereas the rates of consumption and alcohol-related injuries and health problems are rising in Canada. An estimated 5,000 Canadians die prematurely every year from alcohol abuse.

The study also notes that most liquor taxes across Canada aren’t linked to the cost of living. "This allows taxation rates to erode over time and contribute to lower prices, which leads, potentially, to higher consumption," says Stockwell.

The study makes a number of recommendations to reform the alcohol tax structure, including: apply tax to alcohol content, not retail price or volume of beverage; introduce tax incentives for lower alcohol content beverages; create special levies on higher strength products; link taxes to inflation to prevent declines in real alcohol prices over time; and earmark some tax revenues for alcohol treatment and prevention services.

CARBC is a research centre of the University of Victoria, in partnership with UBC, UNBC, SFU and Thompson Rivers University. The study report, "Alcohol Pricing and Public Health in Canada" is available online at

Stockwell is a member of a national alcohol strategy working group co-chaired by Health Canada, the Canadian Centre on Substance Abuse, and the Alberta Alcohol and Drug Abuse Commission. It includes representatives from federal and provincial governments, non-governmental organizations, researchers, addictions agencies and the alcohol beverage and hospitality industries.

In support of the working group's development of a national alcohol strategy, Health Canada provided funding for this background discussion paper. The discussion paper does not reflect the views or conclusions of Health Canada nor the national alcohol strategy working group.

To mark National Addictions Awareness Week, Nov. 19-25, Tim Stockwell will present a public lecture on Nov. 21, titled "Paying the Price of Alcohol-related Harm: How Canadian Alcohol Taxes Could Be Used to Promote Public Health and Safety." The lecture takes place at 5 p.m. in the Human and Social Development Building, room A270. For more information on the lecture call 472-5445.


Media Contacts:Dr. Tim Stockwell (CARBC) at (250) 472-5445 or cell (250) 415-7376 or timstock@uvic.caValerie Shore (UVic Communications) at (250) 721-7641 or



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