WHO’s push for higher alcohol taxes deepens Europe’s policy divide

The World Health Organization’s push for higher alcohol taxes is sharpening a debate across Europe and other markets over whether higher prices are an effective public health tool or a policy that falls hardest on lower-income consumers while expanding illicit trade.

The argument has grown more visible since WHO Europe promoted alcohol taxation as one of its “quick buys,” a set of policies it says are inexpensive to put in place and can deliver results within five years. Dr. Carina Ferreira-Borges, the agency’s regional adviser for alcohol, said when the latest policy toolkit was introduced that governments already know which measures reduce alcohol harm, and that taxation belongs near the top of that list.

WHO has been making that case for years. Its SAFER initiative, launched in 2018, includes raising alcohol prices through excise taxes and pricing policies. The agency says higher prices reduce harmful consumption and can also generate money for governments to spend on health systems and prevention.

That message, however, is meeting resistance from producers, trade groups and some academics who say the real-world effects are more mixed than the public health case suggests. In some countries, they argue, higher taxes have not produced the expected gains in revenue and have instead pushed some consumers toward unrecorded alcohol, home production or cross-border purchases.

The Czech Republic has become one of the examples most often cited by critics of repeated tax increases. The country introduced phased rises in alcohol duty of 10% in 2024, another 10% in 2025 and 5% this year. Opponents of the policy say the increases reduced legal production and helped expand the market for moonshine, home-distilled spirits and purchases made outside the country. They also point to weaker-than-expected tax revenue as evidence that demand for legal alcohol can be driven down without producing a matching benefit for government finances.

A similar concern has been raised in South Africa, where the illicit trade has become a central issue in the alcohol market. According to figures cited from Euromonitor, illegal sales now account for almost 20% of the market and cost the state about R11 billion, or roughly £504 million, in lost annual revenue. In sub-Saharan Africa more broadly, producers have been pressing governments to consider tax policy alongside enforcement. Hina Nagarajan, Diageo’s regional president for Africa, has described the balance between excise revenue, health objectives and illicit liquor control as a major priority.

In Britain, alcohol taxation has long been tied to both fiscal and social policy. The use of duty as a policy tool dates back more than a century, but the modern health-based argument intensified as alcohol became more affordable in real terms. In 2008 the British government introduced a “duty escalator,” which raised alcohol duty by 2% above inflation each year. Public health groups backed the measure, arguing that price was one of the most effective ways to reduce harmful drinking.

The escalator was scrapped in 2014 after criticism from the drinks trade and parts of the hospitality sector. Since then, the British tax record has been used by both sides to support their case. Supporters of higher duties say alcohol remains too cheap and that taxation still has room to influence consumption. Critics point to the performance of spirits duty after the escalator ended, noting that revenue rose 46% over the following seven years while duty increased just 1.8%. They argue that beyond a certain point higher rates can yield less money as consumption falls or buying habits shift.

Across all drink categories in Britain, tax receipts have recently shown signs of that pressure. Analysts who oppose further increases say a combination of lower consumption and weaker volume sales has left the Treasury collecting less, even with higher duty rates in place. They say that undercuts the argument that alcohol tax can reliably serve both health and revenue goals at the same time.

Another front in the debate is continental Europe, where wine remains lightly taxed in some of the bloc’s largest producing and consuming countries. Under the European Union’s excise framework, several member states, including Spain, Italy and Germany, apply no excise duty to wine. WHO Europe has argued for tighter tax treatment across the region, but any change to the minimum EU system would require unanimous approval from member states, a high political hurdle.

Ignacio Sánchez Recarte, secretary general of CEEV, the European wine industry group, has said that unanimity makes a major rewrite unlikely because countries with large wine sectors are not expected to support it. For the trade, the larger risk may be a change in the basis of taxation rather than the existence of a minimum rate. Wine in the EU is generally taxed by volume, not by alcohol strength, which means a bottle at 14% alcohol by volume can be taxed the same as one at 10%. Industry representatives say a shift to alcohol-strength-based taxation would create a more complex system for producers, shippers and retailers that handle many products with different alcohol levels.

At the center of the dispute is a broader question about who alcohol taxes are meant to affect. Economists and health advocates who support higher duties often accept that the policy has a bigger effect on lower-income households because those consumers are more sensitive to price. To them, that is part of the point. If price leads to less drinking in groups facing the highest health risks, they argue, then the tax can reduce harm.

That view has also drawn criticism for being paternalistic. Michael Bloomberg, the billionaire philanthropist whose foundations have funded public health campaigns around the world and who has been a major donor to the WHO, has publicly said that higher taxes have a stronger effect on people with less money and that this can influence behavior. Opponents say that logic treats poorer consumers as the target of social engineering and gives too little weight to the broader cost of living.

Mike Coppen-Gardner, founder and chief executive of the drinks consultancy SPQR, has argued that affordability is the most vulnerable point for the industry when taxes rise and that regressiveness should be central to the political discussion. Critics of the policy say alcohol taxes function like other consumption taxes by taking a larger share of income from poorer households than from wealthier ones, even when all consumers face the same price increase on the shelf.

The debate has also widened beyond tax alone to include other pricing policies such as minimum unit pricing, a measure used in Scotland. Supporters say the policy targets the cheapest alcohol linked to harmful drinking. Critics question whether it changes the behavior of the heaviest drinkers. Dan Malleck, a professor at Brock University in Ontario who studies alcohol policy, has said the measure may reduce overall consumption without necessarily reaching the most dependent consumers, who often find other ways to keep buying alcohol.

Some researchers frame that trade-off through what public health specialists call the prevention paradox. The idea is that the total harm from a large number of moderate drinkers can exceed the harm caused by a smaller group of very heavy drinkers. That helps explain why some health advocates support broad population measures, including taxes, rather than policies aimed only at people with severe alcohol problems.

Felicity Carter, a journalist who covers the global alcohol and public health debate, has said the political climate around alcohol policy changed after the Covid pandemic, when governments used stronger public health powers than many citizens had experienced in peacetime. In her view, that period made some governments more willing to adopt paternalistic measures and made parts of the public more open to them.

The policy fight is likely to continue as governments search for revenue and public health agencies press for stronger action on alcohol-related harm. WHO Europe has kept taxation high on its list of recommended measures, even while acknowledging that raising alcohol taxes is politically difficult. For the drinks industry and some economists, that difficulty reflects a basic question that has not been resolved: whether the tax is mainly a tool to raise money, a way to reduce harm, or a burden that can push part of the market out of the legal economy.