A cost of living crisis has gripped the United Kingdom (UK). As a consequence, people are cutting down on their spending, especially for non-essential goods. One of the major home spending cuts in British households is on alcohol purchases.
The British Retail Consortium reported that food inflation rose to 3.5% last month. Industry experts have warned that the Russian invasion of Ukraine and the impact of soaring energy, oil, and wheat prices could mean that food prices will be at least 15% higher by the end of the year.
Poorer households are more affected by the rising inflation. Modeling by the New Economics Foundation think-tank suggests on average, price increases have pushed up the cost of an essential basket of goods and services by £2,300 a year. The rise in costs for the poorest half of families is nine times larger than for the richest 5% as a proportion of income. Even for families in the middle of the income distribution, the rise in costs is six times larger than for the richest 5% as a proportion of income.
Due to the rising cost of living, alcohol has become much less affordable. Thus, Britons now spend 15.9% less on alcohol products.
This is the household expenditure category that people reduced most, followed by meat, poultry (7.8% less), and frozen goods (7.5% less).
The fact that Britons are cutting back on alcohol products due to price increases shows that alcohol affordability matters when it comes to sales and consumption.
Easily affordable, ultra cheap alcohol in England
For so long, alcohol has remained extremely cheap in England. This is contributing to the country’s heavy alcohol burden. Due to the interference of the alcohol industry lobby, the UK government has been cutting or freezing alcohol taxes since 2012. As a result, the alcohol industry has been increasing their profit margins at the cost of the British people’s health and lives. Cheap alcohol products specifically prey on the most vulnerable, such as children and youth, the most deprived communities and people with alcohol problems.
- A 2018 report from the Institute of Alcohol Studies showed that heavy alcohol users only make up 25% of all alcohol users but provide 68% of industry revenue.
- The alcohol tax cuts since 2012 in the UK cost the lives of 2000 people, caused 61,000 avoidable hospital admissions and fueled 111,000 alcohol-related crime cases.
While the current decrease in household spending on alcohol is due to higher prices caused by rising inflation and not effective alcohol policies, it does prove that alcohol policy solutions that reduce alcohol affordability through increasing the prices, for example through alcohol excise taxes or minimum unit pricing (MUP), hold significant potential to reduce consumption and prevent harm. Already Scotland and Wales have adopted MUP policies and achieved positive results with reduced alcohol sales and a decrease in alcohol harm.
- According to a study published in the Lancet, the alcohol MUP in Scotland led to a 7.7% decrease in household alcohol purchases in 2020. In Wales, the decrease was 8.6%.
- In 2019, after one full year of implementation of the alcohol MUP Scotland recorded a 10% decrease in alcohol-specific deaths.