Budget 2018 – Victory for beer lobbyists
Finance Minister (FM) Mangala Samaraweera’s mangala ayaweya (inaugural budget) has already drawn heavy flak. The medical community and the temperance activists are up in arms against his proposal to reduce the taxes on beer by 40% and allowing sale of beer without licences at the so-called tourist guest houses.
However, the FM justifies his decision claiming that half the country’s drinkers are kasippu (hooch) users, and the price reduction of beer will help these unfortunates to ‘convert’ from ‘bad’ kasippu into “good” beer drinkers. Thereby, he not only proposes a new health advisory for the Sri Lankan drinkers but also makes a contribution to the conventional medical wisdom. He goes on to say that as opposed to other countries where the majority of alcohol users are beer drinkers in Sri Lanka they use strong spirits. This situation needs rectification. The remedy, as per the FM’s budget proposal, is through the price reduction of beer. Further, he opines that alcohol should be made freely available for the country to become a “modern” country, which still stagnates in the “gal-yugaya” (stone-age). What a way for an economic take off. Through his last prescription the FM, ostensibly, proposes a new “moral code” for economic development as well. Three cheers for our FM for his groundbreaking recommendations in medical, economic and moral spheres!
Soon there was support forthcoming for the FM from his cabinet colleagues. They were quick to pick on whatever the former had left out in his budget proposal through oversight. No sooner the FM reduced the beer prices, the Labour Minister John Seneviratne separately voiced for reduction of the price of Gal Arrack for the benefit of the proletariat. If the FM gives a kind hearing to this proposal as well, then he could rudder the country back to another ‘gal-yugaya’, quite different to what he previously visualized (vide supra).
As opposed to the FM’s belief in some quarters that his budget proposals could be the “redemption song” for the alcohol users in Sri Lanka, country’s medical fraternity thinks otherwise. They think this budget will worsen the alcohol problem in the country. We learn that the country’s medical professionals and activists have been protesting against a possible alcohol promotional budget this time around quite preemptively.
The Sri Lanka Medical Association (SLMA), in a strongly worded letter to the FM weeks before the budget, put forth a cogent argument against the possible price reduction of beer. “The Island” on 14.11.2017, quoted SLMA president Prof. Chandrika Wijeratne as saying “moves to reduce beer prices and introduce a new tax structure for alcohol were misplaced and dangerous. While the government’s free health service was striving to reduce alcohol consumption and battle alcohol related diseases, the government itself was attempting to introduce a new policy which would increase alcohol consumption”. In no uncertain terms the apex body of the medical professionals in the country has looked askance at the duplicity of the government’s policy and action in this regard. In fact, it has urged all parliamentarians to defeat the government’s efforts to promote alcohol consumption.
After all, the previous regimen’s much touted “Mathata Thitha” programme, especially during the present President’s tenure as the former health minister, adopted many a measure to curb the alcohol (and tobacco) menace in the country. It is no secret that this programme was well received by the populace of this country, more so by the women folk, especially in its opening years. However, waning political commitment in the wake of increasing industries’ influence in later years took its toll on the programme; this is a fact which the President keeps stressing on many occasions. He has been left with egg on his face.
The president of the Diabetes Association of Sri Lanka, Dr. Prasad Katulanda, has also condemned the budgetary move at issue, cautioning that the promotion of beer would cause a catastrophic health situation in the country. Participating in a diabetes awareness generation event, he opined that the increase in beer consumption, the probable outcome of the present move, would further worsen the diabetic situation in the country, which has already reached an alarming level.
As Drs. Wijeratne and Katulanda have already pointed out this ill-conceived proposal not only puts paid to the efforts undertaken by the health sector and the activists in this country to curb the spread of alcohol menace for decades but also reverses the results they have yielded.
Dr. Sajeeva Ranaweera, a longtime temperance campaigner and consultant to the National Authority on Tobacco and Alcohol (NATA) is among the experts well versed in the subject in the country. He goes to the basics of alcohol control in a country.
Commenting on FM’s speculation that 50% of the country’s alcohol users drink kasippu, R. Ranaweera says, “This issue of illicit alcohol or kasippu is a long-drawn one, often used to mislead governments to stop effective policy measures being adopted for alcohol control. This strategy had been used for decades in our country without any corroborating evidence. This is the same argument used when the tax of beer was reduced in the mid-1990s. Then it resulted in the consumption of beer increasing rapidly. Spirits consumption also increased over the years, thus increasing the overall alcohol consumption in Sri Lanka and its harms”.
Countering the minister’s claim that hooch consumption will reduce if beer is made cheaper Ranaweera said, “Inquires made from the Police, Excise Officers and Divisional Secretaries as well as studies undertaken in different locations show that illicit alcohol production has reduced significantly during the last several years. Although there are no national level studies on illicit alcohol use, some technically sound sub-national studies have shown that illicit alcohol use is now less than 10% of users, often giving a figure between 2.5%-6%”. He further added, “The cultures of using “Kasippu” and beer are very different, and therefore if there is an overlap at all between these two groups, it will be very small”.
Dr. Ranaweera debunks the minister’s claims about alcohol use in Sri Lanka vis-à-vis other countries thus: “The alcohol usage pattern in Sri Lanka and most Asian countries is very different to that of Europe, where the vast majority of the population use spirits.The majority of the adult population in Sri Lanka does not use alcohol. According to the STEPS Survey of 2015 conducted by the Ministry of Health and WHO, the current usage of alcohol among males over 15 years was 35%, and less than 1% among females. Therefore, over 80% of the population over 15 years in Sri Lanka are not current users of alcohol. Other studies too show similar results. This is one of the major reasons why policies helping to increase alcohol use are not popular among the Sri Lankans.”
Thus, any policy measures taken on alcohol should ensure that this vast non-drinking population is not pushed towards use.
Dr. Ranaweera sees a drastic incompatibility of using Western examples to extrapolate matters related to our culture. “In the Western countries, a large majority of the population of both males and females use alcohol. Therefore, reducing the price of beer can shift some spirit users to beer. But in Sri Lanka, such a reduction in price will stimulate initiation of use among non-using groups, especially the young, and increase the use of beer among the current beer users. Small cans of beer will become available at very low prices. The overall consumption of alcohol will be go up significantly, as it was observed previously following 1994 budgetary price reduction of beer.”
On policy front Ranaweera comments, “We recommend that if the harms of alcohol cannot be reduced forthwith then keep them at the same level at the least till sound anti-alcohol policies are formulated. In Sri Lankan context, where the majority people are non-users, what must be done will be to increase the price of spirits, and not decreasing the price of beer”.
The World Health Organization, unequivocally, recommends that alcohol prices should be increased (just as for tobacco) to reduce use. Contrary to popular belief all alcohol users are not “addicts”. Usually less than 10% of all alcohol users are dependent. Most “heavy” drinkers too are not dependent. WHO states that increasing prices of alcohol will even reduce use among heavy drinkers.
Increasing prices of alcohol is a pro-poor strategy
“It has been shown that the poorer segments of the society too reduce their consumption when the prices are increased, similar to what we see here in Sri Lanka in relation to cigarettes since the recent price increases,” says Dr. Ranaweera.
According to Dr.Ranaweera the FM’s assumption that increasing the availability will boost tourism is a laughing stock. “Tourists have enough opportunities to purchase alcohol from hotels, restaurants and supermarkets etc. If the number of outlets are increased it will be the Sri Lankans who will start consuming more. As we all know, no tourist comes to Sri Lanka solely to consume alcohol”.
According to Ranaweera the Finance Minister’s contention that taxation on alcohol should be based on the alcohol content of the beverage and, therefore, the taxation on beer should be reduced is ludicrous.
Taxation of alcohol is a complex subject. Ranaweera laments, “There are different types of alcohol taxation – specific taxes (on amount of ethanol), ad-valorum taxes (on selling price), unitary taxes (on volume of product) etc. One or more of these can be used, based on the context and usage patterns in countries. And for Sri Lanka,as discussed before, the price of spirits should be increased instead”.
Executive Director of Alcohol and Drug Information Centre (ADIC) Pubudu Sumanasekera, a frontline temperance activist in the country, puts forward a sound economic argument against the latest budgetary bungling. “By reducing the prices of beer and increasing its outlets the overall alcohol consumption in the country will increase with deleterious effects on the country’s economy. According to a joint study conducted by the NATA and the WHO recently, the cost the country has to bear due to the health and social harms of alcohol stands at Rs. 120 billion annually. This is far in excess of the revenue the country makes through taxation of alcohol. Therefore, what we need are the policies and strategies that will reduced the alcohol use in the country, whereas the present budget envisages to increase it”, observed Sumanasekera.
As for the issue of illicit trade both Ranaweera and Sumanasekera are of the view that ‘illicit trade should be dealt with by appropriate law enforcement and not by price competition. There have been no examples anywhere in the world that consumption of hooch can be reduced by reducing the prices of spirits”.
Whatever the finance minister’s personal opinion of an addictive substance may be medical opinion about the same substance could be another. However, the medical opinion is founded on sound scientific knowledge, thus, will be the accepted norm. Further, these two can be as different as chalk and cheese.
The fact that the finance minister controls the country’s finances does not mean that he is qualified to decided what is good or bad for people where their health is concerned. The recent comment by our finance minister that he thinks beer is better than sweetened soft drinks is hilarious, to say the least. Close on the heels of his beer friendly proposals, the labour minister too separately voiced for reduction of the price of gal arrack for the benefit of the proletariat. As our editorial of 13.11. remarked he may be expecting the workers to drown their sorrows before hitting the sack (in the midst of economic tsunami they are already hit with). Further, as the editorial noted none of our parliamentarians have called for reducing prices of liquid milk for the sake of malnourished children. Yet again, in this budget speech and the debate thereon we have been treated to another version of parliament jokes, but with possible ghastly repercussions.