Dealing with a social externality - alcohol and health

Abstract

Public awareness of illness resulting from the harmful consumption of alcohol is increasing. Public-health reaction has been to determine types of health problems, treatments and interventions. Work is continuing at international and national levels, supported by research leading to policy and cooperative public-health developments. The proportionality of the response by the alcoholic beverages industry has been questioned. The business risks are wide ranging principally due to a less than fully professional managerial response to existing concerns and pressure for more general interventions. The Australian wine industry response to this form of externality has been to meet regulatory requirements. It also cooperates with national market interventions, but as far as possible on a ‘self-regulatory’ basis. Their approach is similar to that taken by the international alcohol and tobacco industries consisting of a low-level contribution. The opportunity to create a more holistic strategy to improve both public-health and business outcomes is examined including identification of variables towards a cost–benefit analysis. The differentiated situation of ‘small and medium’ enterprises is considered. Failing any new initiatives, by the industry, more general interventions can be expected starting in 2013. Why would an industry ignore such risks?