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The drastic alcohol price hike proposed to tackle Australia’s obesity crisis

A tax on alcohol is the most cost-effective way to tackle worrying rates of obesity in Australia, researchers at a Victorian university say.

Analysis by health economists at Deakin University found a levy based on alcoholic content, of 84 cents per standard drink, could help reduce consumption and lead to significant health benefits.

Taxing sugary drinks offered the next best value for money, followed by a ban on advertising junk food to children, according to a report published on Wednesday.

“Alcohol is high in calories, with a pint of beer almost on par with a chocolate bar, so consumption can have a big impact on daily energy intake,” co-author Associate Professor Gary Sacks said.

A tax on alcohol is the most cost-effective way to tackle worrying rates of obesity in Australia, researchers at a Victorian university say. Image: Getty
A tax on alcohol is the most cost-effective way to tackle worrying rates of obesity in Australia, researchers at a Victorian university say. Image: Getty

“Currently different types of alcohol are all taxed differently, but under a uniform volumetric tax all drinks would be taxed based on alcohol content, meaning a significant price increase for some products.”

This proposed change would have the biggest impact on the price of cask wine, increasing it by more than 120 per cent.

The price of beer will increase by 28 per cent on average, bottled wine by around 33 per cent, and ready-to-drink alcoholic beverages by 2.7 per cent. The study predicts such an alcohol tax will lead to a 16 per cent reduction in mean alcohol consumption.

An alternative is to target lower-priced alcohol

An alternative alcohol taxation strategy put forward in the report is to introduce a floor price of $1.30 per standard drink. This would have the biggest impact on lower-price takeaway alcohol with the price of wine increasing by 14 per cent and cask win by 168 per cent. Such a strategy is predicted to reduce mean alcohol consumption by 9 per cent.

Although the study found the increased taxes would significantly reduce obesity, it concedes the steep price hikes will be opposed by the public and the liquor industry.

Bottled wine prices would increase by 33 per cent under the proposed new alcohol tax. Image: Getty
Bottled wine prices would increase by 33 per cent under the proposed new alcohol tax. Image: Getty

Almost two-thirds of adults and more than a quarter of children in Australia are overweight or obese.

Jaithri Ananthapavan, senior research fellow and the report’s lead author, said the alarming rates can only be addressed through the introduction of multiple interventions, which will require “political courage and commitment”.

“Australia’s current obesity epidemic has serious negative health and economic consequences,” she said.

“It costs society more than $12 billion each year in medical costs and lost productivity, which will only be addressed through a comprehensive societal response.”

The report was funded by a National Health and Medical Research Council Centre of Research Excellence grant.