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Wednesday, March 21, 2012

Beer, wine and distilled spirits in Ontario: A comparison of recent policies, regulations and practices

There is a long-standing discussion about whether some beverages are more likely to be linked with high-risk drinking and damage than others, and implications for beverage specific alcohol policies. While the evidence is inconclusive, when controlling for individual consumption, some studies have shown elevated risks by beverage type. This paper examines the situation in Ontario, Canada, from 1995 to present (2011) on several dimensions in order to assess
the differences by beverage and their rationale with a specific focus on the most recent policie.

This paper draws on archival consumption statistics, taxation and pricing arrangements, and retailing and marketing practices.

Off-premise sales, which represent an estimated 75% of ethanol, involve several channels: stores controlled by the Liquor Control Board (LCBO)-which sell all spirits, imported and domestic wines, and beer products; the Beer Store network which sell all beers; and Ontario winery stores-which sell Ontario wines. In LCBO stores Ontario wines are more prominently displayed than other beverages, and extensive print advertising tends to feature wine over beer and spirits. There are also differences by beverage in terms of taxation and price. The taxes on higher alcohol content beverage types account for a higher portion of the retail price than taxes on lower alcohol content beverage types. Furthermore, minimum price regulations allow for differential minimum pricing per standard drink [17.05 ml ethanol] across beverage types.

The apparent rationale for these arrangements is not primarily that of favouring lighter-strength beverages in order to reduce harm, but rather to accommodate long-standing vested interests which are primarily financially based.

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