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Doubling the Alcopop Tax

Partner Institute: 
Centre for Health, Economics Research and Evaluation (CHERE), University of Technology, Sydney
Survey no: 
(12) 2008
Gisselle Gallego
Health Policy Issues: 
Public Health, Prevention
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no yes no no no no
Featured in half-yearly report: Health Policy Developments 12


In an effort to decrease binge drinking particularly among young people (especially women) the Government has increased the tax on ?alcopops? or ready-to-drink (RTD) beverages from $39.96 to $66.67 per litre of alcohol content.

Purpose of health policy or idea

Pre-mixed alcoholic drinks, ready to drink (RTD) alcoholic beverages or alcopops are a part spirit or wine and part non-alcoholic drink (i.e. soft drink or milk) sold in a premixed format. Trendy packaging and sweet flavours that mask the taste of alcohol make such drinks particularly attractive to young people. (1) In addition, alcopops are cheaper than other alcoholic beverages, which also contributes to their growing popularity amongst the young. It is expected that increasing the price will make these drinks less attractive to young people. This policy proposal has triggered some debate about the precise degree of the responsiveness of alcohol consumption to price. Data from other countries indicates that alcohol behaves like other commodities and consumption is responsive to price, particularly among the young and people who are heavy drinkers. (2)  

The 70 per cent tax increase on pre-mixed drinks was introduced in April in an attempt to reduce binge drinking and its associated harms amongst young people. According to Government figures, since the introduction of a lower tax rate for RTDs in 2000 the market has grown significantly. The measure therefore aims to close the existing loophole in the excise on alcopops. A AU$53.5 million National Binge Drinking Strategy was also announced by the Prime Minister. (3)

Main points

Main objectives

The main objective of the measure is to decrease the consumption of alcopops by young people.

Type of incentives


Groups affected

Alcohol industry

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Characteristics of this policy

Degree of Innovation traditional rather traditional innovative
Degree of Controversy consensual consensual highly controversial
Structural or Systemic Impact marginal marginal fundamental
Public Visibility very low high very high
Transferability strongly system-dependent system-neutral system-neutral

Political and economic background

After preliminary results from the 2007 National Household Drug survey were released in April 2008, Prime Minister Kevin Rudd expressed concerns about the increase in binge drinking, particularly among young women. The current Federal Health Minister blamed the previous Government for the rise in teenage drinking due to a tax cut on pre mixed drinks. Prior to 1st of July 2000 the rate of tax applicable to alcopops was the same as that for full strength beer. This was reversed by the previous government which then taxed alcopops at a lower rate.  The new Labor Government decided to reverse this change, almost doubling the excise on alcopops, which in turn pushed the cost of such drinks up by between AU$ 30 cents and AU$1.30 a bottle. The Government was initially expected to raise AU$2 billion from the tax increase, however this figure was recently reported as AU$3.1 billion. A proportion of this revenue will be redirected to preventative health initiatives.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no yes no no no no

Origins of health policy idea

Girls at risk

Results from the 2005 Australian secondary students' alcohol and drug survey (ASSAD) showed that in a given week, approximately one in ten 12 to 17 year olds reported binge drinking or drinking at risky levels. (4) The 2007 National Household Drug survey showed that girls aged 12 to 15 are more than three times as likely as teenage boys of the same age to consume alcohol at least once a week. The survey also found that 11 percent of teenage girls and seven percent of boys are drinking at levels regarded as harmful. (5) These results raised concerns about binge drinking amongst yourng people and especially women. The Government expects that the 70 per cent tax hike will reduce the consumption of alcopops amongst young people.

Initiators of idea/main actors

  • Government
  • Private Sector or Industry
  • Political Parties

Approach of idea

The approach of the idea is described as:

Stakeholder positions

The Alcohol Education and Rehabilitation Foundation (AER) welcomed the initiative and called for further changes to alcohol taxation. (6)The Australian Drug Foundation (ADF) also praised the move "to close the loophole" on alcopops taxation. ADF considers that this tax fixes a problem that started with the introduction of the GST and also shows that this Government is serious about tackling alcohol problems. (7) The Public Health Association (PHA) also welcomed the change and considered it a "move in the right direction". PHA also expects the Government will continue developing new policy measures designed to reduce alcohol-related harm to both young people and the broader community. (8)

Evidence or "window dressing"?

Organisations such as Diageo (the largest spirits and RTD producer in Australia), Australian Hotels Association, the Winemakers' Federation of Australia and Wine Grape Growers' Australia have pointed out that between 1991 and 2007, alcohol consumption patterns of individuals aged 14 years or older remained largely unchanged. They argue that the assumed link between increasing the price of RTDs and a reduction in binge drinking among young women is tenuous at best and there is no evidence to support the current urgency about the levels of risky drinking of either gender. (2)  

Critics of the measure have described it as "window dressing" that is unlikely to make much of a difference in what has been described as a binge drinking epidemic. (9)

Some have pointed out that young people will substitute their previous consumption of alcopops with, for example, straight spirits as it has been observed that once the price of a preferred product rises, some consumers will switch to a different brand or type of product that is cheaper.

Actors and positions

Description of actors and their positions
Prime Ministervery supportivevery supportive strongly opposed
Health Ministervery supportivevery supportive strongly opposed
Private Sector or Industry
Alcohol Industryvery supportivestrongly opposed strongly opposed
Political Parties
Opositionvery supportivestrongly opposed strongly opposed

Actors and influence

Description of actors and their influence

Prime Ministervery strongvery strong none
Health Ministervery strongvery strong none
Private Sector or Industry
Alcohol Industryvery strongstrong none
Political Parties
Opositionvery strongstrong none
Prime Minister, Health MinisterAlcohol Industry, Oposition

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

Between a rock and a hard place

Figures released in June by the Distilled Spirits industry Council showed a reduced consumption of alcopops but increased sales of full strength spirits. Since the introduction of the measure there has been a constant battle between the industry and the Government about what it the correct level of sales of alcopops. (9, 10) The measure is yet to be officially passed through legislation. However it has been suggested that the opposition leader will vote against the measure in the Senate.(11) Since the Government does not have the majority this would result in an overturn of the policy. 

Monitoring and evaluation

Ongoing row between political and entrepreneurial interests

The Government has commitment to evaluate the effectiveness of the measure increasing the excise on spirit-based RTDs and all components of the binge drinking strategy. However it is unlikely that the Government and the alcohol industry will ever agree on the right numbers. Furthermore the collection and reporting of alcohol sales data is being abandoned by some States and Territories. (12)

Expected outcome

Reduce the growth in RTD consumption, particularly among young people. But it may also just lead to substitution.


Sources of Information

1. Stark J. Revealed: how alcopops lure the young. Sydney Morning Herald; 2007 [cited 2008 August 27]; Available from:

2. Senate Community Affairs Committee. Ready-to-drink alcohol beverages. Commonwealth of Australia 2008 [cited 2008 August 26]; Available from:

3. Australian Labor Party. National Binge Drinking Strategy Media Statement - 10th March 2008. Australian Labor Party; 2008 [cited 2008 August 27]; Available from:

4. White Victoria, Hyamn Jane. Australian secondary school student's use on alcohol in 2005: Drug Strategy Branch Australian Government Department of Health and Ageing 2006.

5. Australian Institute of Health and Welfare. 2007 National Drug Strategy Household Survey: first results. Canberra: AIHW2008.

6. Alcohol Education and Rehabilitation Foundation. AER welcomes alcopop tax as first step towards a fairer alcohol taxation system (media release). Alcohol Education and Rehabilitation Foundation; 2008 [cited 2008 August 27]; Available from:

7. Australian Drug Foundation. ADF Applauds Alco-pop Tax (Media Release). Australian Drug Foundation; 2008 [cited 2008 August 27]; Available from:

8. Public Health Association of Australia. Alcopops Report: Committee Supports Change To Drinking Culture: A disappointing dissenting report by Liberals (media release). Public Health Association of Australia; 2008 [cited 2008 August 27]; Available from:

9. The Courier Editorial. Lies, damned lies, statistics and those alcopops. The Courier; 2008 [cited 2008 August 27]; Available from:

10. Ryan S. Alcopops binge drinking statistics doubted. The Australian; 2008 [cited 2008 August 27]; Available from:,25197,23801012-5013871,00.html.

11. ABC Online. The World Today - Binge drinking summit (radio program transcript). ABC; 2008 [cited 2008 August 27]; Available from:

12. Hall WD, Chikritzhs TN, d'Abbs PH, Room RG. Alcohol sales data are essential for good public policies towards alcohol. Med J Aust 2008, 18;189(4):188-9.

Author/s and/or contributors to this survey

Gisselle Gallego

Suggested citation for this online article

Gisselle Gallego. "Doubling the Alcopop Tax". Health Policy Monitor, Sep 2008. Available at