National Drug Strategy
National Drug Strategy

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:

The most consistent recent body of published research work in this area has been undertaken by Saffer. Anderson and Baumberg (2006, p. 281) summarise the results of his work as follows: Anderson and Bamberg (2006, p. 287) summarise the results of the relevant international research as follows: Top of Page

Table 9 below presents the summary by Anderson and Baumberg (2006, Table 7.11) of the strength of the research evidence on alcohol taxation.

Table 9. Effectiveness ratings for advertising controls

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

For the definitions of the ratings see Table 6 above.

5.2.1 Potential reductions in social costs resulting from advertising bans

The evidence presented above can be summarised as follows: The following two tables summarise these estimates and present the ranges within which it
is assumed the ‘true’ values lie.

Table 10. Assumed percentage reductions if countries with no advertising bans implement partial bans

Reduction in Best estimate Minimum Maximum
Alcohol consumption
16.0%
11.0%
21.0%
Motor vehicle fatality rate
10.0%
5.0%
15.0%

Table 11. Assumed percentage reductions if countries with partial advertising bans implement full bans

Reduction in Best estimate Minimum Maximum
Alcohol consumption
11.0%
6.0%
16.0%
Motor vehicle fatality rate
23.0%
18.0%
28.0%

Table 12 presents the percentage reductions implied from the previous two tables if countries with no bans implemented full bans.

Table 12. Implied percentage reductions if countries with no advertising bans implement full bans

Reduction in Best estimate Minimum Maximum
Alcohol consumption
25.2%
16.3%
33.6%
Motor vehicle fatality rate
30.7%
22.1%
38.8%

It is the view of the present authors that, for the purposes of this study, it can be assumed that Australia is a jurisdiction with effectively no advertising bans. However, for completeness of information, estimates are also provided for a move from no bans to partial bans and from partial bans to a full ban.

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

The next three tables present estimates of the impact upon the aggregate social costs of alcohol abuse in Australia of moves to full or partial bans on alcohol advertising.

Table 13. Reduction in total social costs of alcohol abuse resulting from a move from no advertising bans to a full ban (2004/05 prices), Australia.

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

Table 14. Reduction in total social costs resulting from a move from no advertising bans to partial bans (2004/05 prices), Australia

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


Table 15. Reduction in total social costs resulting from a move from partial advertising bans to a full ban (2004/05 prices), Australia

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

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

The following three tables present estimates of the impact upon the social costs of road accidents in Australia of moves to full or partial bans on alcohol advertising.

Table 16. Reduction in road accident costs resulting from a move from no advertising bans to a full ban (2004/05 prices), Australia

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

Table 17. Reduction in road accident costs resulting from a move from no advertising bans to partial bans (2004/05 prices), Australia

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


Table 18. Reduction in road accident costs resulting from a move from partial advertising bans to a full ban (2004/05 prices), Australia

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

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5.2.4 Maintaining advertising bans

Saffer and Dave (2002, p. 1,333) produce a further conclusion which has potential implications for Australian public policy towards alcohol advertising.

The Saffer and Dave research indicates that, if bans on alcohol advertising lead to a reduction in alcohol consumption, there is likely to be pressure for relaxation of these bans. It is the view of the present authors that, should this occur, such pressure should be resisted. If evidence exists that bans are effective in reducing alcohol consumption, this evidence should constitute strong justification for maintaining, rather than relaxing, these controls.

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