Let’s talk about alcohol-related benefits AND COSTS

The BC government is the sole wholesaler and leading retailer of alcohol in the province and government revenue from alcohol is carefully tracked year after year. The social costs of alcohol, however, are not reported by government even though they contribute significantly to health care and enforcement costs. This begs the question: How can we make informed decisions about the supply of alcohol if we do not meaningfully include costs in our analyses?

Alcohol is implicated in a host of health and social harms from violence to injuries to many types of cancer to better known ailments such as liver cirrhosis and alcohol dependence (addiction). While the sheer breadth of these harms makes monitoring them difficult, careful methods for assessing the costs of alcohol were developed right here in Canada, and have been applied in several countries around the world. The costs of alcohol are divided into direct costs (mainly for health and enforcement), and indirect costs which account for losses in productivity associated with alcohol-related disability and deaths.

The on-going assessment of alcohol-related costs and harms could help enhance the management of alcohol in several ways. For example, such information could help the government assess the impact of its policies and programs and gauge the impact of changes to policy over time. Yearly estimates of alcohol-related costs and harms could be compared to the revenue and other benefits from alcohol sales, and this could help the government achieve its stated goal of balancing the benefits and costs of alcohol in society. On this point it is worth noting that some policies have the potential to maintain revenue while at the same time reducing risky alcohol consumption. Chief among these are minimum price policies which target heavy and risky drinkers who tend to gravitate toward low cost alcohol.

And just how balanced is the current approach to managing alcohol in BC? The answer is, we don’t know, because recent cost estimates are not available. However, in 2002 (the last year for which data is available) direct revenue from alcohol totaled $852 million and direct costs were estimated at $925 million. Big ticket costs included $550 million for health care and $359 million for alcohol-related enforcement. So the best available data suggests that when direct revenue and direct costs are compared, the province is running a deficit of $73 million dollars.

There are, of course, other benefits besides revenue related to alcohol, and there are many other costs and harms besides provincial budget costs. But given that we do know the direct costs of alcohol outstrip the direct revenue government gains from the sale of alcohol, wouldn’t the ongoing monitoring and reporting of costs be an important part of modernizing BC’s approach to managing alcohol?

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Author: Gerald Thomas 

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