All Alaska Cities

We Love Our Booze

According to the Anchorage Daily News, Alaskans are drinking more than ever, even with higher prices and penalties.

Taxes were raised on alcoholic beverages more than a decade ago, but we haven’t lowered drinking rates with the higher prices:

“Instead of cutting back because of the extra cost, Alaskans kept right on drinking. The tax on hard liquor doubled, yet sales of whiskey, vodka and other spirits have grown 41 percent since the increase. (Alaska's population, rose just 13 percent during the period.) The tax on wine tripled, yet wine sales have gone up 56 percent. Only beer receipts dipped slightly in the face of the 2002 "dime a drink" tax championed in Juneau by U.S. Sen. Lisa Murkowski, who was then a state House member from Anchorage.”

This doesn’t include illegal sales of alcohol – booze smuggled in to avoid the higher taxes.

The story is counter to what economists expect in a supply and demand situation. Classically, when prices rise (for whatever reason) demand falls or stays the same. Not so in Alaska for alcohol consumption.

The article also mentions a real disappointment. Higher taxes were meant to fund increased treatment programs, but the author tells us that more was collected than went to prevention and treatment. In fact, shortly after the tax was put in place, funding fell. That’s a shame.

It might be time to reevaluate things and put more money into prevention – to try to get our citizens to lower consumption and to keep our young people from starting. This certainly wouldn’t be a popular option for those selling alcohol, but perhaps it’s time to accept that we’ve peaked when it comes to booze consumption and we ought to back off a bit. Alternatively, we could raise the taxes even higher, with the idea that the original increase wasn’t enough to impact the marketplace.


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