RTD debate – contributed facts

On a previous post Mark Unsworth (consultant to Independent Liquor) provided some detailed facts  – unverified but no reason to doubt them:

“Lets throw some facts into the debate.”

  • The RTD market has 2 distinct parts Light ( vodka and gin based) and dark ( bourbon and rum based )
  • The dark market is approx 75% of the market
  • The light market is predominantly favoured by females and is generally at the 5% alcohol level.
  • The dark market is favoured predominantly by men and older drinkers and alcohol levels range from 5-8%
  • Past market research has shown that approx half of RTD drinkers are over the age of 34.

This was backed up by a survey of 500 RTD purchasers across retail outlets in NZ in late 2010.

Now some quotes from the Alcohol Advisory Council of NZ (ALAC ) June 2006 magazine…

One of the messages ALAC has been trying to get out there is that alcohol is alcohol and taken in standard amounts there is no inherent difference between a standard drink of beer, a standard drink of wine and a standard drink of spirits.

Yet the myth persists that some types of alcohol are somehow worse than others. It is perpetuated in the media with stories of youth and their consumption of the latest ”evil product” RTS.

…and…

And while RTDs are often seen as the drink of choice for youth ,beer was the most popular alcoholic drink for youth, favoured by 44 percent of those surveyed.

What did the Law Commission say about RTDs after extensive research?

Despite these concerns,.there are strong arguments why it is not feasible to ban or directly target RTDs. The risks associated with drink RTDs are of no marked difference to any other alcohol product.

It is likely that banning one type of alcohol product would simply lead to the development of alternative products by the alcohol industry. Some experts consider that young people would be likely to switch products in order to obtain cheap alcohol if measures were introduced to single out RTDs by increasing their price or removing them from the market.

Some of the products to which they may switch are arguably more likely to cause harm because of the high alcohol content ,such as straight spirits mixed with other beverages.
( Alcohol in our Lives:Curbing the Harm 2010)

The Australian RTD Tax

What happened in Australia when the government imposed a 70% tax increase on RTDs in April 2008?

Australian Bureau of Statistics consumption data ( ’000,000 litres pure alcohol))

2007

2008

2009

2010

2011

RTD

18

18

13

12

12

Beer

77

74

81

79

77

Wine

62

62

65

68

68

Spirits

20

22

23

23

24

Total

177

181

182

184

182

The tax had an immediate impact on RTD consumption, down by approx 40% but this was balanced by increases in wine and spirits consumption leaving no change in the total amount of alcohol consumed at all. A fascinating example of a misguided public policy intervention driven by emotion rather than logic .

Other international experience

There has been one scientific literature review of RTD ( alcopop) consumption carried out in Germany ( Metzner Krause). It noted:

The review of results from investigations of alcopop consumption and its impact on an early onset of alcohol use,more frequent alcohol consumption,heavy episodic drinking,and negative alcoholic -related consequences show that there is scarce evidence of a relationship between the consumption of alcopops and the described effects.

The last myth to destroy relates to the cost of RTDs. Drinkers, especially young drinkers, are very price conscious and will seek out the best ”bangs for bucks” in terms of standard drinks.

RTDs are the most expensive form of alcohol with cask wine being the cheapest. A 3 litre cask can be purchased from a supermarket for $16. This equates to 6 bottles of wine and 27 standard drinks.

$30 can now buy you:

  • over 50 standard drinks of cask wine
  • 29 of beer
  • 33 of spirits
  • 24 of RTDs

Mark Unsworth ( consultant to Independent Liquor)

Popping alcopop popularity

The Alcohol Reform Bill aims at lopping the lapping of loaded lolly water.

Alcopops (RTD) – high sugar cordial type drinks with alcohol added – are believed to be a major contributor to drunkenness and binge drinking, especially amongst young women. They are being targeted in changes proposed in the Alcohol Reform Bill.

Facts from Independent Liquor and the Law Commission report the reforms are based on:

  • The most common drinkers of RTDs were 14 to 24-year-olds, particularly women.
  • RTDs made up 12% of the total alcohol market in New Zealand by volume.
  • Up to 180 million alcopops were sold in New Zealand each year
  • More than half of RTDs sold had an alcohol content of 6% or more
  • The majority of RTD sales were in off-licence stores, such as convenience stores, supermarkets and bottle shops.

I’ve checked an online bottle shop.

  • Alcohol content 5%, 7%, 8%
  • Can and bottle sizes 250ml, 330ml and 2 litre cartons
  • Most are between $2 and $3 dollars each (cartons $23-25).
  • A rough calculation – this is a half billion dollar per year industry

The Alcohol Reform Bill would ban off-licence stores from selling RTDs with more than 6% alcohol content and more than 1.5 standard drinks per container.

It is claimed this could significantly reduce sales. It seems likely it would at least force a change to lower alcohol content sales.

Obviously this will concern some in the liquor industry. Executives have met with Justice Minister Judith Collins and “urged her to quash a law change that will ban the sale of high-strength alcopops in bottle stores.”

Liquor industry fights RTD Bill

Managing directors from heavyweight drinks companies Bacardi, Jim Beam, Brown-Forman and Diageo were invited to the Beehive on Monday to discuss the alcohol reforms due to return to Parliament later this month.

They have told Mrs Collins policy that restricted the sale of ready-to-drink (RTD) beverages unfairly targeted one part of the industry and threatened to breach international trade rules.

Distilled Spirits Association chief Thomas Chin said the industry was strongly opposed to the amendment, evident in the fact that senior members of four corporates had met the Minister.

“You can well imagine what’s at stake for their respective businesses. We’re talking about the highest-ranking officers – it demonstrates how serious the policy threat is to the businesses.”

Alcopops are often linked to what is called ‘preloading’ – getting pissed cheaply before going out clubbing.

The proposed restrictions will be opposed by some who think people should be free to choose for themselves what they drink, and how blotto they get.

The Law Commission (and I suspect a lot of MPs) think the change will help address a major alcohol problem.

This doesn’t affect me. I don’t drink RTDs, and rarely have.

What do the consumers think?