A new report reveals that the cost to public finances from alcohol and tobacco harm far exceed any revenue the state gains from alcohol and tobacco taxes.
The new findings illustrate the need for higher taxes and better alcohol policy in France.
Movendi International responds by highlighting the triple-win potential of alcohol taxes and calling for action to address the social justice dimension of alcohol costs.

A brand new report from the French Observatory of Drugs and Addiction Trends (Observatoire français des drogues et des tendances addictives, OFDT) reveals that the social costs of alcohol amounted to €102 billion in France in 2019.

102 Billion
Social costs of alcohol harm in 2019
In France in 2019, the social costs of alcohol harm amounted to €102 billion.

For comparison, in 2019, the social costs of tobacco were €156 and the social costs of illicit drugs were €7.7 billion.

External costs represent the bulk of the social costs, which explains the differences between tobacco, alcohol, and illicit drugs, due to the mortality differential.

In France, in 2019

  • 73,189 people die due to tobacco,
  • 41,080 people died due to alcohol, and
  • 1,230 people died due to illicit drugs.

To calculate the monetary value of lives lost, by agreement the value of lost life is estimated to be €115,000. 

The French government received €4 billion and €13 billion respectively from the taxes on alcohol and tobacco.

France’s government loses more money due to lives lost and spending on dealing with massive alcohol and tobacco harm than it gains from taxes on those products, according to the ODTF report.

4 Billion
Government revenue from alcohol taxes
The French government received €4 billion from the taxes on alcohol in 2019.

For example, the report shows that in 2019, the number of patients in the healthcare system due to alcohol was 1,055,044 and 1,348,187 due to tobacco.

The idea that legal drugs, tobacco, and alcohol, benefit the state is therefore unfounded,” the analysis from France’s Observatory of Drugs and Addiction Trends (OFDT) said.


Report methodology and estimations

The report analysed data from 2019 to determine the impact of alcohol, tobacco, and illicit drug harm on the country.

Tobacco smoking caused more than 73,000 deaths in 2019 and alcohol consumption caused more than 41,000 deaths, according to the report.

The report estimated the “social cost” to the state as amounting to €156 billion for tobacco smoking and €102 billion for alcohol. The cost to the state of illicit drug use amounted to €7.7 billion.

The social cost of alcohol in France measures the monetary cost of the consequences of the consumption and trafficking of alcohol, tobacco, and illicit drugs during an average year of the decade. It is made up of the external cost (value of human lives lost, loss of quality of life, loss of production) and the cost for public finances (expenditure on prevention, repression and care, saving of unpaid pensions, and revenue taxes levied on alcohol and tobacco). The calculation parameters follow the recommendations of the “Quinet report” from 2013. 

This methodology takes into account the economic value of lives lost due to drug use, the loss of quality of life for patients with cancers caused by tobacco and alcohol, as well as state spending on prevention and care.

The savings on pensions for those who lose their lives due to alcohol, tobacco, and illicit drug use was deducted from the social cost estimate.

Need for higher taxes and better alcohol policy

The French government received €4 billion and €13 billion respectively from the taxes on alcohol and tobacco.

The tax receipt is not even enough to cover the costs to the government for treatment services for alcohol and tobacco use disorder and addiction.

The idea that drugs like tobacco and alcohol would bring benefits to the state is therefore completely unfounded,” said Pierre Kopp, a professor of economics at the University of Paris 1 Panthéon Sorbonne, who wrote the report, as per EuroNews.

Drugs impoverish the community.”

Pierre Kopp, report author, and professor of economics, University of Paris 1 Panthéon Sorbonne

The report noted however that the drop in the number of deaths caused by alcohol, tobacco and illicit drugs between 2010 and 2019 illustrates that public policies have made it possible to “significantly reduce tobacco consumption, improve care for illicit drug users and, more modestly, increase awareness of the dangers of alcohol”.

In early June 2021, Inserm, the French public research organization dedicated to health, released a collective expert opinion on the alcohol burden in France. They reported preventable deaths caused by alcohol were higher in France than anywhere else in Europe. In fact, alcohol is the second largest cause of preventable death in France.

The authors present three recommendations to reduce the French alcohol burden: improve regulations, intensify prevention messages and systematically screen, with better monitoring.

The authors of the Inserm opinion make three main recommendations: 

  1. Improve regulations, 
  2. Intensify prevention messages, and 
  3. Systematically screen, with better monitoring.

1. Improving alcohol policy regulations

The public health experts call for improved regulations of alcohol advertising, including for online advertizing with greater transparency, control and surveillance.

Inserm also recommends either implementing a minimum unit price or increases of alcohol taxes to reduce the affordability of alcohol products. Alcohol taxation is recommended to be levied per gram of pure alcohol.

2. Intensifying alcohol prevention messaging

The experts also highlight the need for intensifying alcohol prevention messages – specifically for women and young people. 

For children, psychosocial skills need to be developed from elementary or middle school. This will enable them to better resist social pressure, refuse endangerment, and to become aware of the pitfalls of marketing.

Notably, the Inserm report also emphasizes the importance of alcohol-free challenges, such a Dry January, as another means of action. Going alcohol-free for a month has been found to have lasting effects on the reduction and quitting of alcohol consumption. In turn, this boosts the health and well-being of participants.

3. Better screening, brief interventions and treatment

Finally the authors call for prevention to be coupled with systematic screening for alcohol use problems. Any primary health caregiver can be trained to screen for alcohol issues among patients and provide brief interventions. Screening and brief interventions help those who are at risk of developing an alcohol use problem. These brief interventions take a motivational approach and provide personalized advise to the patient. Those presenting with alcohol problems can be referred to specific treatment and care. 

Many of the recommended solutions are part of the World Health Organization’s alcohol policy blue print, SAFER. Especially addressing alcohol affordability through taxation and improving France’s alcohol advertising ban are two of the three alcohol policy “best buys“, according to the WHO. Improving screening, brief interventions and treatment provision for people with alcohol use problems is also part of the SAFER blue print, as one of the two “good buys”.

recent modeling study predicted that if the current alcohol use and obesity trends continue in France, over the next decade, thousands of French people’s lives will be lost in addition to the already high death toll. If urgent action is taken to prioritize alcohol policy solutions, thousands of lives can be saved.

Current levels of alcohol taxation are way too low, even the government cannot even afford to invest in proper healthcare services for people with alcohol problems.

And the people in France have a right to be protected from preventable harm, such as caused by alcohol companies,” says Kristina Sperkova, International President of Movendi International.

And people in France want change.

This new research makes it remarkably clear that the government should raise alcohol taxes to better protect people from alcohol harm, ease the current burden on the healthcare system, and increase government revenue. This revenue can then be reinvested to benefit people and communities affected by alcohol harm.

For France, raising alcohol taxes is a triple-win solution.”

Kristina Sperkova, International President, Movendi International

How costs for alcohol harm impede economic growth and productivity

The ODFT report provides the latest data on the economic damage alcohol is causing in societies around the world.

Movendi International has previously documented how the products and practices of the alcohol industry drain precious resources from countries. These health, social, and economic costs are even more burdensome now as governments need more resources to recover and build back better after the COVID-19 pandemic.

recent worldwide overview showed: the economic costs of harm due to alcohol amount to 1306 Int$ per adult, or 2.6% of the GDP. About one-third of costs (38.8%) were incurred through direct costs, while the majority of costs were due to losses in productivity (61.2%).

This special feature details the economic harm caused by the alcohol industry in OECD countries, and specifically in Norway, Australia, Canada, Germany, Sweden, France, the Netherlands, New Zealand, and the UK, the United States, as well as in low- and middle-income countries, such as Sri Lanka and India.

The Organization for Economic Cooperation and Development (OECD) released a landmark report in 2021 detailing the economic harm caused by the alcohol industry. Diseases and injuries due to alcohol incur a high cost to society.

  • Life expectancy is nearly one year lower than it would be, on average, if alcohol consumption in a population would be lower.
  • Reduced productivity of employees due to alcohol harm amounts to US$ 595 billion (adjusted for purchasing power).
  • The OECD estimates that the growth domestic product (GDP) will be 1.6% lower on average in OECD countries annually, over the next 30 years due to costs for alcohol harm.

The Special Feature also explores concrete types of economic harm, such as workplace harm and productivity loss, as well as loss of economic growth, healthcare spending and more.

The vast gap between the costs of alcohol harm and the government revenue from the alcohol trade shows:

Big Alcohol makes windfall profits but leaves people and society behind to deal with the harm their products and practices are causing, without adequately paying for it. We need a polluter pays principle to deal with the alcohol burden and we cannot afford to subsidize alcohol companies any longer,” says Ms Sperkova.

Kristina Sperkova, International President, Movendi International

Source Website: EuroNews