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The avoidable costs of alcohol abuse in Australia and the potential benefits of effective policies to reduce the social costs of alcohol

5.2 Bans on alcohol advertising

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The appropriateness of bans on alcohol advertising has been the subject of public and political debate for many years, both internationally and within Australia. Indeed, in a recent development in February 2008 the Australian Senate set up an inquiry into aspects of this issue. The fundamental question has been whether alcohol advertising increases total alcohol consumption and/or abuse, or whether it simply affects brand choice, leaving alcohol consumption unchanged. Generally, public health advocates have argued that advertising increases total alcohol consumption and abuse. The industry’s position has consistently been that advertising leaves total consumption unchanged, merely affecting the market shares of the various brands.

In terms of the design of public policy towards alcohol promotion, this is clearly a very important issue. Accordingly, there has been a considerable amount of international research on the impact of advertising and advertising bans on alcohol consumption. This is a research area which is fraught with methodological difficulties and data deficiencies, but over time the studies have tended to become more sophisticated.

Earlier studies, which largely concentrated on studying the relationship between alcohol advertising and consumption in individual jurisdictions, tend to suggest that the relationship is weak. Later studies, which tend to use international data across a range of jurisdictions, indicate that a positive relationship exists between advertising and consumption—that is, alcohol advertising leads to higher alcohol consumption.

Saffer and Dave (2002, p. 1326) analyse in considerable detail the reasons for this apparent conflict. They state:

Farley and Lehmann (1994) find that cross-national differences in the response to advertising are relatively small. The use of international data is an effective method for measuring the effect of a ban on alcohol advertising. Data from one country are not as useful since changes in alcohol advertising bans within countries are rare and the imposition of a ban may require an extended period for consumption to adjust. There is, however, considerable variation in the use of advertising bans across countries.

Later studies have suggested significant effects of alcohol advertising on alcoholrelated problems … Countries with partial restrictions had 16 per cent lower alcohol consumption rates and ten per cent lower motor vehicle fatality rates than did countries with no restrictions, and countries with complete bans on television advertisements had 11 per cent lower consumption rates and 23 per cent lower motor vehicle fatalities than did countries with partial restrictions … After accounting for regional price differences and population variables such as income and religion, increases in alcohol advertising were found to be significantly related to increases in total and night-time vehicle fatalities across US states … It was estimated that a total ban on alcohol advertising might reduce motor vehicle fatalities by as much as 5,000 to 10,000 lives per year.

In conclusion, restricting the volume of commercial communications of alcohol products is likely to reduce harm.

	Effectiveness	Breadth of research support	Cost efficiency
Reducing the volume of advertising	+/++	++	+++

5.2.1 Potential reductions in social costs resulting from advertising bans

• If countries with no alcohol advertising restrictions implemented partial bans, they could reduce alcohol consumption by 16 per cent and motor vehicle fatality rates by ten per cent.
• If countries with partial advertising restrictions implemented full bans, they could reducealcohol consumption by a further 11 per cent and motor vehicle fatality rates by a further 23 per cent.

5.2.2 The impact of alcohol advertising bans on the overall social costs of alcohol abuse

	Best estimate $m	Minimum $m	Maximum $m
Tangible costs	2,730	1,770	3,640
Intangible costs	1,130	730	1,510
Total costs	3,860	2500	5,150

	Best estimate $m	Minimum $m	Maximum $m
Tangible costs	1,730	1,190	2,270
Intangible costs	720	490	940
Total costs	2,450	1,680	3,210

	Best estimate $m	Minimum $m	Maximum $m
Tangible costs	1,190	650	1,730
Intangible costs	490	270	720
Total costs	1,680	920	2,450

5.2.3 The estimated impact of alcohol advertising bans on the social costs of alcohol-attributable road accidents

	Best estimate $m	Minimum $m	Maximum $m
Tangible costs	680	490	850
Intangible costs	280	200	360
Total costs	960	690	1,210

	Best estimate $m	Minimum $m	Maximum $m
Tangible costs	220	110	330
Intangible costs	90	50	140
Total costs	310	160	470

	Best estimate $m	Minimum $m	Maximum $m
Tangible costs	510	400	610
Intangible costs	210	160	260
Total costs	720	560	870

5.2.4 Maintaining advertising bans

There is also evidence that alcohol consumption has a positive effect on total advertising bans. That is, an increase in alcohol consumption can increase the probability of legislation of an advertising ban on all forms of alcohol in a particular media. However, alcohol consumption has been trending downward in a number of countries since around 1988. These decreases may reflect changes in exogenous factors such as increases in the demand for health. This downward trend in alcohol consumption could result in a decrease in the number of advertising bans. Canada, Denmark, New Zealand and Finland recently decreased the total number of advertising bans in effect. These decreases may be examples of the difficulty in maintaining alcohol advertising restrictions when alcohol consumption is on a downward trend. Alcohol consumption in these countries may increase, or decrease at a slower rate, than would have occurred had the advertising bans remained in place.

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