The Alcohol and Drug Information Centre (ADIC) organisation raised concerns about the Excise authorities' plans to introduce an inexpensive type of liquor.
Issuing a statement yesterday (12), the anti-drug and -alcohol group noted that despite the opposition raised with regard to this move, during the meeting of the Parliamentary Committee on Public Finance recently, the Excise Department re-introduced this proposal and mentioned that they are proceeding with implementing it.
Issuing a statement, The ADIC added: "This initiative contradicts the Government's vision of ‘A Thriving Nation, A Beautiful Life’ and raises concerns about whether the department is deliberately creating difficulties for the President and the Government. The primary responsibility of the Excise Commissioner General (CG) and his officers should be to take necessary legal action against individuals responsible for the illicit alcohol trade. Instead, they seem to be misleading both the Government and the public by claiming that 40% of alcohol in the market is illicit, based on unscientific studies conducted in favour of the alcohol industry. Furthermore, their effort to cover the inefficiencies of the Department by presenting false data is a matter of serious concern." It further added that the Excise CG and his officials had put forward three key justifications for their proposal regarding lower-priced alcohol, I.e. introducing a lower-priced, legally manufactured alcohol product as a measure to reduce the consumption and distribution of illicit alcohol, generating government revenue by capturing taxes lost due to the consumption of illicit alcohol, and introducing a lower-priced legal alcohol product as an alternative to safeguard the health of those who consume illicit alcohol.
In this context, the ADIC reiterated that these proposals are not supported by scientific evidence and will in no way achieve the intended objectives. Therefore, the ADIC said that the claim that introducing a lower-priced, legal alcohol product will reduce illicit alcohol consumption is false and added: "In any market, both legal and illegal substitute products are inevitably sold at a price lower than the standard product. If this was not the case, there would be no demand for the substitute. Thus, the argument that reducing the price of legal alcohol will control illicit alcohol consumption is a misconception, one that has been perpetuated by the alcohol industry for decades."
The ADIC underscored that the correct approach should involve properly enforcing alcohol taxation, preventing the sales and distribution of illicit alcohol, identifying untaxed alcohol products in the market, bringing those engaged in such illicit trade to justice, and implementing measures to prevent such occurrences in the future. It noted that in such a context, the department's responsibility should align with the vision of ‘A Thriving Nation, A Beautiful Life’ as emphasised by the President and the Government. Moreover, the ADIC said that it advocates for implementing effective and accurate measures to control the alcohol issue in the country, rather than disguising alcohol price reductions as a means of controlling illicit alcohol, a strategy it said would ultimately increase overall consumption, benefit the alcohol industry, and deepen the public's entrapment in alcohol related harm.
Meanwhile, speaking to The Daily Morning yesterday (12), ADIC Executive Director Sampath de Saram said that if this programme is implemented, illicit alcohol producers will simply lower their prices, ensuring the continued demand for their products. He also rejected the argument that the proposal would increase Government revenue. He also noted that consumers currently purchasing higher-taxed alcohol would switch to the cheaper alternative, reducing the overall tax income while making alcohol more accessible to younger populations, thereby exacerbating public health concerns.
Additionally, the media statement issued by the ADIC cited historical evidence to refute the proposal’s effectiveness, pointing to a similar policy in 1996 that resulted in a 200% increase in beer consumption after beer taxes were halved. Instead of reducing illicit alcohol use, the move led to an overall rise in the alcohol intake. The statement also said that introducing a lower-priced alcohol product would fail to address health risks associated with illicit alcohol. Instead, it would lead to an overall increase in alcohol consumption, increasing the unfavourable health outcomes, straining the healthcare system, and contributing to economic losses.
The statement further quoted a World Health Organisation research that says that alcohol is a major contributor to non-communicable diseases and is responsible for approximately 20,000 deaths annually in Sri Lanka. It says that a 2023 United Nations Development Programme study revealed that while alcohol tax revenue in 2022 amounted to Rs. 165 billion, the economic and health costs related to alcohol consumption reached Rs. 237 billion.
Hence, he called on the department to focus on enforcing the existing laws, strengthening the taxation policies, and cracking down on illicit alcohol rather than implementing policies that ultimately benefit the alcohol industry. The organisation reiterated that increasing Excise taxes, as recommended by global health experts, is the most effective strategy for reducing alcohol-related harm.
The Daily Morning attempts made to contact the department's Spokesperson Channa Weerakkody, the National Alcohol and Tobacco Authority Chairperson Dr. Alan Ludowyke and the College of Community Physicians were unsuccessful.