Discussion on Alcopop Taxes

Topics: Alcoholic beverage, Drinking culture, Beer Pages: 7 (2114 words) Published: December 13, 2011
Case Study of Australian Alcopop Taxes

Table of Contents

1.0 Executive summary2
2.0 Analysis of the case3
2.1 Definition of Alcopop3
2.2 Evaluation of the case3
3. 0 Relative economic theory5
3.1 supply-demand theory5
3.2 Theories of Elasticity and government intervention5
4.0Alternative actions and solutions6
4.1 Causes of teenagers’ drinking7
4.2 Solutions and actions7
5. 0 Conclusion8

1.0 Executive summary

Alcopop refers to alcoholic beverages that are popular with young people. It is widely taken among underage drinkers. In order to cut potential danger caused by alcopop and to raise revenue, recently Australian government has promoted alcopop tax. The main purpose of the article is to set light on and tackle the problem of alcopop tax and its effects. It is apparent that government’s move will affect aspects of society and may also have some flaws. Through the analysis of alcopop tax and relating it to economic theories, this article comes to the alternative actions and solutions to the potential problem caused by the government activity. Research is carried out in the form of group work and it also contains a group discussion about its effects.


One of the most popular alcoholic beverages among young people in Australia is alcopop. Recently the Australian government has increased the tax for Alcopops, soft drinks mixed with alcohol. As a result, the government is expected to gain $2 billion in tax revenue, whilst leaving the problem unsolved (Christian, 2008). Meanwhile, teenagers are switching to harder liquor; spirits and beers which are cheaper and get people drunk faster. The report looks deep into the recent topic of Alcopop Tax and its effect on its key stakeholders mainly being underage drinkers and the Australian government. By the end of this article, there will be a simple and effective solution to resolve the issue of underage binge drinking as an alternative to raising alcopops tax.

2.0 Analysis of the case
2.1 Definition of Alcopop

Alcopop is defined as a sort of alcoholic beverage that aims at the customer group of young people. It is a combination of alcohol and pop which indicates sweetness and alcohol at the same time. Usually, alcopop is fruit-flavoured and fortified with alcohol that composed 5% in volume (Gordon & Harrison, 2008 ). The amount of alcohol makes alcopop much stronger than beer. However, since it was originated in Australia and spread to the world, it gains lots of popularity among young people. In the aim to reduce teenage binge drinking Australian government has increased the tax for alcopops.

2.2 Evaluation of the case
In this part, the case is evaluated from the point view of four factors: the government, teenagers, retailers and social and welfare organisations.

In the first place, since it is the government that aims to reduce teenage binge drinking. At the same time, the government increased the tax on alcopop tax, and gain more tax revenue. It treats the means as a feasible and effective way of killing two birds with one stone. However, this does not actually reduce our nationwide issue of teenage binge drinking. According to ABC News article “Government hikes alcopops tax”, the increase in tax actually increases other alcoholic beverage sales (ABC News. 2008). It implies that the move did not stop teenagers’ drinking or cheaper and stronger alcohol. The outcome goes against the intention. Discussions on the society have it: whether the government is actually trying to prevent this issue, or is this just another way of gaining more revenue.

Secondly, the factor of teenager is at question. Most teenagers go for sweetened alcoholic beverages and against more bitter, stronger tastes. And 70% of these teenagers are young women; other young men would choose beer over fruit-flavoured alcoholic...

References: ABC News. 2008, Govt hikes ‘ alcopops’ tax. [Online] (Updated: 27 Apr, 2008)
Available at: http://www.abc.net.au/news/stories/2008/04/27/2228252.htm
[Accessed 2 September 2011]
Christian, K., 2008, Alcopop tax jacks up sales of spirits, The Australian
Gillespie, A., 2007. Foundations of Economics. Oxford: Oxford University Press.
Gordon, J. and Harrison, D., 2008, Booze blitz: alcopop tax lifted by 70%. [Online] (Updated: 27 Apr, 2008)
Available at:
Harvey, E., 2008. Alcopop tax gets a mixed reception. [Online] (Updated Apr 29. 2008)
Available at: http://www.smh.com.au/articles/2008/04/28/1209234761907.html
[Accessed 2 September 2011]
Nicola Berkovic, 2008, Blame laid over alcopop tax hike, The Australian [Online] (Updated 28 April, 2008)
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