Lobbying in Alcohol Industry
Lobbying in Alcohol Industry
1. Alcohol industry in EU
The economic role of the alcoholic drinks industry is considerable in many European countries. Alcohol excise duties in the EU15 countries amounted to €25 billion in 2001, excluding sales taxes and other taxes paid within the supply chain – although €1.5 billion is given back to the supply chain through the Common Agricultural Policy. Due to the relative inelasticity of the demand for alcohol, the average tax rates are a much better predictor of a government’s tax revenue than the level of consumption in a country.
1.1 Alcohol and the economy of Europe
Europe plays a central role in the global alcohol market, acting as the source of a quarter of the world’s alcohol and over half of the world’s wine production. Trade is even more centred on Europe, with70% of alcohol exports and just under half of the world’s imports involving the European Union (EU). Although the majority of this trade is between EU countries, the trade in alcohol contributes around €9billion to the goods account balance for the EU as a whole.
Price differences play more of a role in the level of legitimate cross-border shopping, where individuals legally bring back alcohol with them from cheaper countries. At least 1 in 6 tourists returns from trips abroad with alcoholic drinks, carrying an average of over 2 litres of pure alcohol per person in several countries. The economic role of the alcoholic drinks industry is considerable in many European countries.
Alcohol is also associated with a number of jobs, including over three-quarters of a million in drinks production (mainly wine). Further jobs are also related to alcohol elsewhere in the supply chain, e.g. in pubs or shops. However, the size of the industry is not necessarily a good guide to the economic impact of alcohol policies – for example, trends in alcohol consumption show no crude correlation with trends in the number of jobs in associated areas such as hotels, restaurants, and bars, suggesting that the effect of changes in consumption may be relatively weak. A reduction in spending on alcohol would also be expected to free consumer funds to be spent on other areas, with the economic impact depending on the exact nature of the new expenditure.
While further research needs to be done on this issue, current evidence from alcohol and other sectors suggests that declining consumption may not necessarily lead to job losses in the economy as a whole. Based on a review of existing studies, the total tangible cost of alcohol to EU society in 2003 was estimated to be €125bn (€79bn-€220bn), equivalent to 1.3% GDP, which is roughly the same value as that found recently for tobacco.
The intangible costs show the value people place on pain, suffering and lost life that occurs due to the criminal, social and health harms caused by alcohol. In 2003 these were estimated to be €270bn, with other ways of valuing the same harms producing estimates between €150bn and €760bn. While these estimates consider a number of different areas of human life where alcohol has an impact, there are several further areas where no estimate has been made as it was impossible to obtain data. Similarly, while the estimates take into account the benefits of alcohol to health systems and loss of life (valued intangibly), there is no research that would enable the other social benefits to be evaluated.
1.1 The use of alcohol in Europe
The EU is the heaviest drinking region of the world, although the 11 litres of pure alcohol drunk per adult each year is still a substantial fall from a recent peak of 15 litres in the mid-1970s. The last 40 years has also seen a harmonization in Austria, Belgium, Denmark, France, Finland, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the United Kingdom.
Most Europeans drink alcohol, but 55 million adults (15%) abstain; taking this and unrecorded consumption into account, the consumption per drinker reaches 15 litres per year. Just under half of this alcohol is consumed in the form of beer (44%), with the rest divided between wine (34%) and spirits (23%). Within the EU15, northern and central parts drink mainly beer, while those in southern Europe drink mainly wine (although Spain may be an exception).
This is a relatively new phenomenon, with a harmonization visible over the past 40 years in the EU15. Around 40% of drinking occasions in most of the EU15 involve consuming alcohol with the afternoon/evening meal, although those in southern Europe are much more likely to drink with lunch than elsewhere. While the level of daily drinking also shows a north—south gradient, non-daily frequent consumption (i.e. drinking several times a week but not every day) seems to be more common in central Europe, and there is evidence for a recent harmonization within the EU15.
While 266 million adults drink alcohol up to 20g (women) or 40g (men) per day, over 58 million adults (15%) consume above this level, with 20 million of these (6%) drinking at over 40g (women) or 60g per day(men). Looking at addiction rather than drinking levels, we can also estimate that 23 million Europeans (5% of men, 1% of women) are dependent on alcohol in any one year. In every culture ever studied, men are more likely than women to drink at all and to drink more when they do, with the gap greater for riskier behaviour.
Although many women give up alcohol when pregnant, a significant number (25%-50%) continue to drink, and some continue to drink to harmful levels. Patterns in drinking behaviour can also be seen for socio-economic status(SES), where those with low SES are less likely to drink alcohol at all. Despite a complex picture for some aspects of drinking (with some measures showing opposite trends for men and women), getting drunk and becoming dependent on alcohol are both more likely among drinkers of lower SES.
Every country in the European Union (EU) has a number of laws and other policies that set alcohol apart from other goods traded in its territory, often for reasons of public health. Despite the ubiquity of alcohol policies, just under half the EU countries still do not have an action plan or coordinating body for alcohol. Even so, most countries have programmes for one aspect of alcohol policy, of which school-based education programmes are the most common throughout Europe. All countries also have some form of drink-driving restrictions, with everywhere except the UK, Ireland and Luxembourg having a maximum blood alcohol limit for drivers at the level recommended by the European Commission (0.5g/L).
However, many European drivers believe that there is only a slim chance of being detected – a third overall believe they will never be breathalyses, although this is lower in countries with random breath testing. Sales of alcohol are generally subject to restrictions in most EU countries, in a few cases through retail monopolies but more often through licences, while the places that alcohol can be sold are frequently restricted. Over one-third of countries (and some regions) also limit the hours of sale, while restrictions on the days of sale or the density of off-premise retailers exist in a small number of countries. All countries prohibit the sale of alcohol to young people beneath a certain age in bars and pubs, although four countries have no policy on the sale of alcohol to children in shops. The cut-off point for allowing sales to young people also varies across Europe, tending to be 18 years in northern Europe and 16 years in southern Europe.
Alcohol marketing is controlled to different degrees depending on the type of marketing activity. Television beer adverts are subject to legal restrictions (beyond content restrictions) in over half of Europe, including complete bans in five countries; this rises to 14 countries for bans on spirits adverts. Billboards and print media are subject to less regulation though, with one in three countries (mainly in the EU10) having no controls. Sports sponsorship is subject to the weakest restrictions, with only seven countries having any legal restrictions at all. The taxation of alcoholic beverages is another consistent feature of European countries, although the rates themselves vary considerably between countries.
This can be seen clearly for wine, where nearly half the countries have no tax at all, but one in five countries has a tax rate above €1,000, adjusted for purchasing power. In general, the average effective tax rate is highest in northern Europe, and weakest in southern and parts of central and eastern Europe. Four countries have also introduced a targeted tax on alcopops since 2004, which appears to have reduced alcopops consumption since. When the different policy areas are combined into a single scale, the overall strictness of alcohol policy ranges from 5.5 (Greece) to 17.7 (Norway) out of a possible maximum of 20, with an average of 10.8.
The least strict policies are in southern and parts of central and eastern Europe, and the highest in northern Europe – but the scores do not all decrease from north to south, as seen in the high score in France. This picture of alcohol policy is very different from the one visible fifty years ago, with the overall levels of policy now much closer together, largely due to the increased level of policy in many countries, particular in the area of drink-driving where all countries have a legal limit. Marketing controls, minimum ages to buy alcohol, and public policy structures to deliver alcohol policy are also much more common in 2005 than in 1950.
Main interest groups in the industry and their leader in lobbying activities
Eurocare: Who we are and what we do
Eurocare, is an alliance of around 50 voluntary and non-governmental organizations across Europe created in 1990, working on the prevention and reduction of alcohol-related harm2 . One of the main goals is to promote the prevention of alcohol-related harm in European Union decision-making; this is achieved by monitoring all EU level policy initiatives, and carrying out advocacy campaigns directed at the European Commission (EC) and the European Parliament (EP) to ensure that alcohol issues are included in relevant policy discussions.
The catalyst of our work in recent years (and the concrete result of fifteen years of lobbying) has been the “EU Strategy to Support Member States in Reducing Alcohol Related Harm”, published by the Directorate General for Health and Consumer Protection (DG Sanco) of the European Commission in October 20063. A cornerstone of this strategy is the recently launched Alcohol and Health Forum, a multistakeholder platform bringing together the industry and well as NGOs4 pledging to commit to concrete actions to reducing alcohol-related harm.
The cross-sectoral nature of alcohol policy includes the Television Without Frontiers Directive (concerned with young people’s exposure to alcohol advertising), Minimum Excise Duties (a report from the EP proposed to scrap these in order to avoid cross border trade and smuggling), and Labeling (the EC is to present a draft Directive on labeling at the end of the year).For Eurocare, lobbying on alcohol presents several difficulties: first the EU has limited competence to legislate in the domain of public health5. DG Sanco’s Alcohol Strategy is thus useful for advocacy in Member States; at EU level, it has allowed alcohol to secure a place on the political agenda, despite being weakened by the influence of the Commission’s more powerful “big brothers” (DG Trade, DG Market, DG Agriculture, etc.) (Ulstein 2006).
Second, at European level, the aim of reducing alcohol-related harm is competing against other strong public health discourses for example in the field of tobacco, nutrition and physical activity, the latter exemplified in the EU Platform for Diet, Physical Activity and Health on which the Alcohol and Health Forum is modeled. Roizen and Fillmore (2000) articulate this from the researchers’ perspective, but it is also true for advocates that “our consumerist or dangerous-commodity orientation to alcohol (…) obliges us to compete in a public-health-information-offering market place already crowded with health warnings of many kinds”.
The specificities of alcohol serve to further complicate the picture; parallels with tobacco or junk food are obvious: indisputable public health burdens; links with social inequalities, and of course, powerful industries. What sets alcohol apart though, is the highly problematic, misunderstood and misused evidence on the “benefits of alcohol consumption”; like it or not, the “ambiguous molecule” alcohol forms an integral part of most cultures across Europe, “causing deaths while saving lives, inflicting pain while producing pleasure”
The alcohol industry: no ordinary stakeholder
The alcohol industry is undeniably a rival voice in the political process of “weighing up the evidence”; a strong economic asset, with increasingly visible corporate social responsibility policies, the industry represents a valid stakeholder. Alcohol producers unite under“legitimate fronts” through social aspects (SA) organisations6, such as the International Centre for Alcohol Policies (ICAP) or the European Forum For Responsible Drinking (EFRD), both of which are participating in the Commission’s Alcohol and Health Forum. Under these banners, research, policy analysis and of course, lobbying are carried out: in fact, it has not been uncommon to find such groups walking the same corridors of power as ourselves.
To the layperson, the “research” and “policy analysis” (e.g.: ICAP Blue Book) carried out by these organisations may appear methodologically sound, and conclusive, and the (simplistic) models as comprehensive and logical. For example, that “patterns of drinking are the best way to understand the place of alcohol in society”; that “targeted interventions are most sensitive to cultural differences”, and that “partnerships offer the best opportunities to develop policies”.
Funnily enough “Drinking in Context: Patterns, Interventions and Partnerships”, an ICAP collaborative publication (Stimson et al. 2006) was recently publicised at a lunch meeting held in the European Parliament, hosted by German MEP Renate Sommer. Staff from the Eurocare Secretariat attended this lunch; the event was reminiscent of the spirit of the film “Thank You For Smoking”8; a sequel named “Thank You For Drinking” should be considered, and would be highly entertaining. This example highlights the tensions involved in the political process, and how apparently sound and legitimate evidence can be put forward by the industry, in order to counter what is regarded by the public health community as “legitimate” evidence.
When the Institute of Alcohol Studies published the Alcohol in Europe report, the British Beer and Pub Association (also participating in the Alcohol and Health Forum) attempted to undermine its scientific objectivity by “denouncing” vested interests, namely, links to temperance; they likened this to “vegetarians writing a report about the benefits of eating meat”. The EFRD’s view (in Baumberg & Anderson 2007) was that those advocating a stronger EU alcohol strategy “had a biased view of the evidence base”.
It is precisely through the use of “evidence” and their engagement in research, policy analysis and lobbying (activities mirroring our own work) that the industry tries to secure a place at the policy table, which may be potentially difficult for the public health community to fight off. The WHO (2007) stresses the “importance of the participation of civil society organisations without the conflict of interests in alcohol policy development, as a counter influence to the vested trade interests, which might otherwise dominate political decision making”.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 8 October 2016
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