• Many policy makers and researchers believe that increasing the prices of alcohol beverages will help to reduce alcohol sales and related problems.
• New findings indicate that across-the-board price increases may, or may not, reduce alcohol sales.
• The authors suggest minimum price posting as an alternative policy measure.

Both research and policy initiatives tend to support increasing the prices of alcohol beverages as a way of reducing alcohol sales and related problems. However, a study in the January issue of Alcoholism: Clinical & Experimental Research has found that across-the-board price increases may not always have the intended effects on alcohol sales.

"Our study accepts the assumption that alcohol is a "complex good," composed of different beverage types such as beer, wine and spirits as well as quality brands that can be high-, medium- or low-end," said Paul J. Gruenewald, senior research scientist at the Prevention Research Center and first author of the study. "We then go on to examine the impacts of the broad distribution of alcohol beverage prices upon sales of alcohol. Our results show that higher alcohol prices may and may not cause reductions in alcohol sales and related problems. These effects will depend upon how the distribution of prices is affected. In other words, the same tax may have different impacts in different markets and with different distributions of prices."

"In general," added Raul Caetano, professor of epidemiology and regional dean at The University of Texas School of Public Health, "the evidence suggests that as you increase taxes, and alcoholic beverages become more expensive, individuals tend to use alcohol less. However, the findings in this paper indicate that the reality is not so simple, because there are alcoholic beverages at different levels of price, and when you implement taxation, what happens is that the individuals who a
'"/>


3-Jan-2006