Interventions to increase the price for alcohol products through municipal, state, or federal legislation raise the excise tax on these products. Alcohol excise taxes affect the price of alcohol and are intended to reduce alcohol-related harms, raise revenue, or both. Alcohol taxes are implemented at the state and federal level, and are beverage-specific (i.e., they differ for beer, wine, and spirits). These taxes are usually based on the amount of beverage purchased (not on the sales price), so their effects can erode over time due to inflation if they are not adjusted regularly (Guide to Community Preventive Services, 2007).
Recommendations for an ideal tax policy would include taxes to be 33%-50% of total price, or if taxes were based on ethanol content (Nelson et al., 2013). Other strategies include increasing liquor licensing fees for retailers and infraction penalties for violations of alcohol laws and regulations (Hoover, 2005). Evidence generally supports that increasing alcohol taxes can result in net cost savings (SAMHSA, 2016). The Institute of Medicine (2004) recommended the raising of taxes on alcohol to reduce underage consumption and raise revenues for underage drinking prevention as one of their top strategies. Raising the price of alcohol is recommended as evidence-based in the 2016 Surgeon General’s report and Alcohol: No Ordinary Commodity (2010). Another strategy is to raise the price of the liquor license fees.
Hawai‘i’s Alcohol Pricing Policies
Source: the STOP report 2015.
Beer (5% alcohol): Specific excise tax is $0.93/gallon. Note: $0.54/gallon for containers of 7 gallons or more. Wine (12% alcohol): Specific excise tax: is $1.38/gallon. Spirits (40% alcohol): Excise tax is $5.98/gallon. Wholesale pricing restrictions exist for Beer, alcohol, wine, and spirits. The Retailer credit for beer, wine or spirits are restricted—30 days maximum.
Currently, Hawai‘i has not raised liquor license fees in the past 12 years. However, with limited evidence on the effectiveness, it is undetermined as to how much the license fee would have to be raised to make a difference on the price of purchase of alcohol (M. Sparks, personal communication, June 2017).
Discussion of effectiveness
Evidence shows that raising the price of alcohol is effective in reducing excessive alcohol consumption, adolescent drinking, alcohol-impaired driving, and mortality from liver cirrhosis (Elder et al., 2010). Evidence supports a strong efficacy rating that raising the price of alcohol was strongly associated with adults and youth in regards to binge drinking and alcohol-impaired driving (Nelson et al., 2013). Studies reviewed for the Community Guide (2013) provided consistent evidence that increases in alcohol prices and alcohol taxes are associated with decreases in both excessive alcohol consumption and related harms. Although these effects were not restricted to a particular demographic group, there is some evidence that they apply to groups with a high prevalence of excessive alcohol consumption (e.g., young men).
Evidence strongly supports youth are particularly price-sensitive; research on the impact of beer prices indicated reductions in underage and binge drinking in youth (University of Wisconsin Population Health Institute, 2017). Evidence supports that policies increase the price for distilled spirits shifts consumption to lower-alcohol content beverages, resulting in reduced amount of pure alcohol consumption (Babor et al., 2003).
Furthermore, setting a minimum price of alcohol is another effective way to reduce consumption. Evidence suggests that price increases for alcopops result in less consumption of alcopops by young drinkers from a few studies in other countries (Babor et al., 2010; Chikritzhs et al., 2009).
Promotion & media
Discussion of effectiveness
Varied evidence of effectiveness
No evidence found
Single published study
Numerous published studies
Systematic review, meta-analysis
Cochrane Review, Community Guide, NREPP
Implementation in Hawai‘i
Increasing Price or Taxes on Alcohol
Hawai‘i Alliance For Drug-Free Communities (Statewide)
References for description of strategy
- Community Preventive Services Task Force. (2013, September 24). Preventing excessive alcohol consumption: Increasing alcohol taxes. Retrieved from: https://www.thecommunityguide.org/sites/default/files/assets/Alcohol-Increasing-Alcohol-Taxes_0.pdf
- National Research Council and Institute of Medicine. (2004). Reducing underage drinking: a collective responsibility. Washington, DC: The National Academies Press.
- Babor, T., Caetano, R., Casswell, S., Edwards, G., Giesbrecht, N., Graham, K., Grube, J., . . . Rossow, I. (2010). Alcohol: no ordinary commodity: research and public policy. (2nd ed.). New York, NY: Oxford University Press.
- Chikritzhs, T.N., Dietze, P.M., Allsop, S.J., Daube, M.M., Hall, W.D. & Kypri, K. (2009). The “alcopops” tax: heading in the right direction. Medical Journal of Australia 190, 294-5.
- Elder, R. W., Lawrence, B., Ferguson, A., Naimi, T. S., Brewer, R. D., Chattopadhyay, S. K., . . . Task Force on Community Preventive Services. (2010). The effectiveness of tax policy interventions for reducing excessive alcohol consumption and related harms.American Journal of Preventive Medicine,38(2), 217-229. https://doi.org/10.1016/j.amepre.2009.11.005
- Guide to Community Preventive Services. (2013, September 24). Preventing excessive alcohol consumption: increasing alcohol taxes. Retrieved from: https://www.thecommunityguide.org/sites/default/files/assets/Alcohol-Increasing-Alcohol-Taxes_0.pdf
- Nelson, T. F., Xuan, Z., Babor, T. F., Brewer, R. D., Chaloupka, F. J., Gruenewald, P. J., . . . Reynolds, R. (2013). Efficacy and the strength of evidence of US alcohol control policies. American Journal of Preventive Medicine, 45(1), 19-28. https://doi.org/10.1016/j.amepre.2013.03.008
- Substance Abuse and Mental Health Services Administration (SAMHSA). (2016, September). Report to Congress on the prevention and reduction of underage drinking (Vol. 1).
- U.S. Department of Health and Human Services, Office of the Surgeon General. (2016). Facing addiction in America: the Surgeon General’s report on alcohol, drugs, and health. Retrieved from: https://www.ncbi.nlm.nih.gov/books/NBK424857/pdf/Bookshelf_NBK424857.pdf
- University of Wisconsin Population Health Institute, County Health Rankings and Roadmaps (2017). Alcohol Taxes. Retrieved from http://www.countyhealthrankings.org/policies/alcohol-taxes
- Wagenaar, A. C., Tobler, A. L., & Komro, K. A. (2010). Effects of alcohol tax and price policies on morbidity and mortality: a systematic review.American Journal of Public Health,(11), 2270-2278. https://doi.org/10.2105/AJPH.2009.186007
- Wagenaar, A. C., Salois, M. J., & Komro, K. A. (2009). Effects of beverage alcohol price and tax levels on drinking: a meta-analysis of 1003 estimates from 112 studies. Addiction, 104(2),179-190. https://doi.org/10.1111/j.1360-0443.2008.02438.x
- Weitzman, E. R., Nelson, T. F., & Wechsler, H. (2003). Taking up binge drinking in college: the influences of person, social group, and environment.Journal of Adolescent Health,(1), 26-35. https://doi.org/10.1016/S1054-139X(02)00457-3
- Alcohol Justice (2011, July). Increasing alcohol taxes–myth v. reality. Retrieved from: http://alcoholjustice.org/images/stories/11MI0701_taxmyth_1.pdf
- Cook, P. J., & Moore, M. J. (2002). The economics of alcohol abuse and alcohol-control policies. Health Affairs, 21(2), 120–133. https://doi.org/10.1377/hlthaff.21.2.120