In a 1726 pamphlet setting out A Brief Case of the Distillers, Daniel Defoe, author of Robinson Crusoe, wrote that: “The distilling trade, considered in its present magnitude, is one of the greatest improvements, and the most to the advantage of the publick, of any business now carried out in England”. Defoe was writing to defend English producers of spirits who were facing Dutch competition, especially from the newly-fashionable “Geneva water”, soon to be known as gin. The English distillers won their case, and soon gin was everywhere, with men and women even drinking together in public for the first time. The authorities soon came to regret their decision (as did Defoe) and over the next 25 years, the UK Parliament would pass no fewer than five Acts to try to put an end to what became known as the Gin Craze (Abel, 2001). The craze died out in the 1750s, although it was revived to some extent in the Victorian “gin palaces” of the following century.

Alcohol has been an element of human society since the Neolithic period at least, both cherished and vilified for reasons that have remained largely unchanged over time. What is drunk, how much is drunk, by whom and where have been strongly influenced by factors such as culture, economics and social norms.

Alcohol has been present throughout the history of humankind, both cherished and vilified for reasons that have remained largely unchanged over time. Both health benefits and harms are associated with alcohol use, but the underlying evidence of these effects is rarely presented in a policy-relevant way. If appropriately set out, the evidence shows that the health benefits of moderate alcohol use warrant full consideration in the policy process, but they do not weaken the case for addressing harmful use, including when governments opt for policies that affect more people than just the heaviest drinkers. Alcohol use is associated with social welfare benefits for some drinkers, but also with significant welfare losses for other heavier drinkers and many non-drinkers. Alcohol policy is a public health area in which government action has a strong economic justification, primarily because of harms to people other than drinkers, and because of the addictive effects of alcohol. This chapter provides an overview of some of the main findings of OECD analyses presented in the remainder of the book, looking at economic determinants of, and explanations for, alcohol consumption, as well as at some of the cultural, social and psychological dimensions of its use.

Levels of alcohol drinking are relatively high in many OECD countries compared with countries in other parts of the world. An average of between 9.1 litres (recorded consumption) and 10.3 litres (including unrecorded consumption) of pure alcohol are consumed annually in OECD countries, compared with an estimate of 6.2 litres worldwide (recorded and unrecorded). Overall, consumption has slightly declined in OECD countries in the past 20 years, and very large relative falls in consumption have been observed in certain countries, but consumption as risen sharply in other OECD countries, as well as in major emerging economies. Alcohol use is very concentrated in the population, with the heaviest-drinking 20% drinking most alcohol, and high-risk drinking behaviours have become more common in recent years in certain population groups. Hazardous and heavy episodic drinking have rapidly gained in popularity among young people, especially women, in countries where they were traditionally less common. At the same time they have decreased in certain countries where they used to be more popular among young people. These trends are especially worrying because they are fuelled by an increasingly early initiation into drinking and drunkenness. The proportion of children who have experienced alcohol at age 15 increased significantly during the 2000s, even faster among girls than boys.

No single variable predicts the likelihood that a person will adopt a given pattern of consuming alcohol. People with more education and higher socioeconomic status are more likely to drink alcohol, but social gradients differ in men and women for hazardous and heavy episodic drinking. Men who are less educated and have lower socioeconomic status, and women who are more educated and have higher socioeconomic status, are more likely to drink at risk in many countries. However, there is a fairly strong trend for women’s drinking behaviours to converge to those of men. Heavy drinking is associated with a lesser probability of being in employment, more absence from work, lower productivity and wages, and a greater likelihood of causing accidents and injuries in the workplace. Moderate drinking is associated with improved labour outcomes in many studies; however, these findings are disputed by others due to the potential for selection.

In 2010, only 38.3% of the world population aged 15 years and older had drunk alcohol in the past 12 months. Nevertheless, alcohol’s impact on global health is dramatic. In 2012 about 3.3 million deaths were attributable to alcohol consumption, 5.9% of all deaths. This is greater than the proportion of all deaths from HIV/AIDS (2.8%), violence (0.9%) and tuberculosis (1.7%) put together. In terms of the global burden of disease and injury, measured in disability adjusted life years (DALY s), 5.1% of all years of potential life lost in the world in 2012 due to premature mortality and disability were attributable to alcohol consumption (WHO, 2014).

The target of policies aimed at addressing alcohol-related harms has been the subject of controversy in the policy debate. A traditional public health view holds that policy approaches addressing the entire spectrum of a risk factor, including those who are at low or no risk, are superior to approaches targeting only those at high risk. However, evidence of improved health outcomes in some moderate drinkers, means that potential health benefits might be forgone if policies were to affect consumption by those drinkers. This is a complex policy question involving political judgements that only individual governments can make. Governments have adopted a broad range of policy approaches to curb alcohol-related harms. These include information and education policies, as well as regulatory and fiscal options, traffic enforcement measures and interventions within the health care sector (particularly, in primary health care and mental health care). Especially in recent years, many attempts have been made to develop and test innovative policy approaches, such as minimum prices, education approaches, new measures to prevent traffic fatalities, but also to sharpen existing approaches and make them more effective in curbing heavy drinking. Business stakeholders have stepped up their corporate social responsibility efforts and a number of governments have established a dialogue with them. Multi-stakeholder initiatives have included attempts to reduce the quantity of alcohol on the market by providing incentives for consumers to demand lower-alcohol products.

The alcohol industry spends billions of dollars each year trying to create positive brand images, increase brand name recognition and ultimately increase profits. Advertising Age’s list of the top 100 global advertisers in 2012 includes five alcohol companies: Anheuser-Busch InBev, Diageo, Heineken, Pernod Ricard and SABMiller (Advertising Age, 2012). Advertising data show that companies spent about USD 1.1 billion in 2011 on alcohol advertising on TV in the United States alone (WSJ, 2012). Televised alcohol advertising in eight European countries in 2007 accounted for about EUR 750 million (de Bruijn, 2013). Expenditures on other media and other forms of marketing are estimated to be even larger (Anderson et al., 2009; de Bruijn, 2013).

The Scottish Government passed legislation in 2012 to introduce minimum unit pricing (MUP) for alcohol. The law states that alcohol should not be sold below a price equivalent to 50 pence (EUR 0.615Exchange rate GBP 1 = EUR 1.23, May 29th 2014.) per unit of alcohol (a unit equals 10 ml of pure alcohol). This has not yet been implemented because a legal challenge is still going through the courts. The Irish Government is also interested in including MUP in its alcohol strategy. The UK Government consulted on MUP but has decided initially to pursue a restriction on below-cost selling – a ban on selling alcohol below a price equivalent to duty plus VAT. As alcohol duties are not levied strictly on alcohol content, this proposal would result in the lowest permitted price varying from 11p or less per unit of alcohol for lower strength still ciders to 42p per unit for higher strength sparkling ciders, with other alcoholic beverages falling between these extremes (Home Office, 2014).

The workplace offers a useful point for interventions addressing alcohol-related problems and related harm because it allows access to a large segment of the working-age population, and can be used to identify individuals who are at increased risk for harm as well as those in high-risk contexts. Focusing on alcohol-related problems in the workplace also makes economic sense for employers and employees alike.

Alcohol policies have significant potential to curb alcohol-related harms, improve health, increase productivity, reduce crime and violence, and cut government expenditure. The WHO Global Strategy to reduce the harmful use of alcohol provides a menu of policy options based on international consensus, which the OECD has used as a starting point in identifying a set of policies to be assessed in an economic analysis based on a computer simulation approach. The policies assessed in three country settings – Canada, the Czech Republic and Germany – include price policies, regulation and enforcement policies, education programmes and health care interventions. The results of the OECD analyses show that brief interventions in primary care, typically targeting high-risk drinkers, and tax increases, which affect all drinkers, have the potential to generate large health gains. The impacts of regulation and enforcement policies as well as other health care interventions are more dependent on the setting and mode of implementation, while school-based programmes show less promise. Alcohol policies have the potential to prevent alcohol-related disabilities and injuries in hundreds of thousands of working-age people in the countries examined, with major potential gains in their productivity. Most alcohol policies are estimated to cut health care expenditures to the extent that their implementation costs would be more than offset. Health care interventions and enforcement of drinking-and-driving restrictions are more expensive policies, but they still have very favourable cost-effectiveness profiles.

Minimum unit pricing (MUP) for alcohol has been placed on the health policy agenda of many countries following the proposal by the Scottish Government to introduce minimum prices in response to the high and rapidly increasing burden of alcohol-related disease in Scotland. The policy also targets aggressive marketing by large supermarket chains that offer alcohol at prices close to or below the cost of the taxes and duty as a loss-leader to attract customers into stores. It is an explicit recognition of the fact that the most effective health promotion policies are those that take population-wide approaches, instead of targeting only those at highest risk (Rose, 1985).

While the rationale for government action to tackle harmful alcohol use is strong, the challenges involved in designing, implementing, and building consensus around effective policy measures are daunting. The interests at stake are so powerful and so diverse, and the views of the problem so polarised, that inertia has often been the norm in the past. But action has been gathering new momentum with the emergence of compelling evidence of the health and economic consequences of harmful alcohol use and of the effectiveness of policies to address them. Voices from civil society have been growing stronger, and governments have increasingly recognised their own role in alcohol policy making with major national and international policy initiatives. The evidence available today, to which this book contributes, provides solid foundations for the development of comprehensive, wide-ranging policy strategies to change the social norms upon which long-established harmful drinking habits are based. Initiatives promoted by the alcohol industry may contribute to addressing harmful alcohol use, as part of a multi-stakeholder policy framework, provided that evidence of their impact is available from rigorous and independent evaluations.