Reports: Alaska has 3rd highest alcohol tax; higher booze prices may reduce hospital visits

Posted on November 1, 2013 

From Kyle Hopkins in Anchorage –

Alaska has the third-highest alcohol taxes in the country, according to the calculations of the personal finance nerds at www.nerdwallet.com. The website recently compared tax rates and consumption in each state, concluding that only Washington and Alabama have higher levies than the Last Frontier.

Alaska's rate is certainly among the highest nationwide. I found comparing state-by-state rates problematic, however, given that many have government-run liquor stores and each state has a different mix of sales taxes and other taxes that impact the price people pay at the register. 

Voters in the Mat-Su recently rejected a proposed alcohol tax, even as Anchorage and Nome officials are considering local taxes of their own. 

Here’s another idea to consider, based on a recent report in the American Journal of Public Health

What if only bottom-shelf liquor -- the Monarch vodka and R&R whiskey favored by street alcoholics and bootleggers -- cost more per bottle? 

Raising the average minimum price of alcohol by 10 percent can reduce acute, alcohol-related hospital admissions by about 9 percent, according to the review of British Columbia figures between 2002 and 2009.  

A previous Canadian study found that raising the cost of the cheapest alcohol – without touching the cost of mid-priced and high-priced booze – can slightly reduce overall consumption. The idea is that the heaviest drinkers try to pay the least per drink. If the lowest-cost alcohol is slightly more expensive, they might be forced to drink less. 

Dale Fox, president of the Alaska Cabaret, Hotel, Restaurant & Retailer’s Association, urged caution in reviewing the study given the difference in the U.S. and Canadian health care systems, among other concerns. “Right now I have more questions than answers and you should too,” he wrote in an email.

Would minimum pricing work in Alaska? Too some degree, it's already been tried. 

The Anchorage Assembly in 2001 required the Oaken Keg liquor store at 1340 Gambell St. to charge at least $1.99 for “shooters” – small bottles of liquor – and set minimum prices for six packs. The Assembly added a clause to city code in 2010 that calls for downtown liquor stores to charge at least $10 a bottle for wine, $6 a six-pack for beer and $10 for a 750 ml “fifth.”

“No cheap wines, such as White Port, in any size,” the law says.

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