Alcohol is a harmful, toxic and addictive substance that causes many health conditions and deaths, with more than 4,000 deaths in Australia attributed to alcohol consumption in 2018.
Evidence suggests there may be many benefits to restricting alcohol availability: reductions in the health impact of alcohol, and social effects such as alcohol-related violence, injuries and car crashes. More evidence is needed to support better decision making around liquor licences and alcohol’s impact on health in the community.
Economic impact of liquor licencesProject title
What is the issue?
Alcohol is a harmful, toxic and addictive substance that causes many health conditions, injuries and deaths. Alcohol use is linked to 29 diseases and injuries, mainly various cancers and transport accidents but also cardiovascular diseases, suicide and self-inflicted injuries. In Australia, 4,090 deaths (4.09% of all deaths) were attributable to alcohol consumption in 2018 and 4.46% of the overall health burden was attributable to alcohol use. This health burden is costly with one study finding alcohol consumption attributable to $18.17 billion of tangible costs in Australia in 2017-18. There is also another $48.7 billion in economic costs when the value of health loss is taken into account.
Australian guidelines on alcohol
The Australian guidelines to reduce health risks from drinking alcohol were released in 2020 by the National Health and Medical Research Council. Based on the latest evidence, the guidelines provide advice on how to keep the risk of harm from alcohol low. They recommend drinking fewer than ten standard drinks a week to reduce the risk of alcohol-related injury and disease. Poll results show 17% of Australians are drinking more than ten standard drinks a week.
The social effects of alcohol
The evidence suggests there are many health, social and other benefits to restricting alcohol availability and access particularly through reducing the number of licensed outlets in an area and restricting the trading hours of licensed venues. Key benefits include reductions in alcohol consumption, alcohol-related violence and assaults, emergency department presentations, as well as injuries and motor vehicle crashes. Despite the large amount of evidence on health and social outcomes there were no economic studies found in the literature relating to alcohol licensing in Australia.
Liquor licences in NSW
As a mandatory stakeholder, NSW Health assesses the health impact of potential licences and makes recommendations to the Liquor Licensing Authority. There is currently limited economic evidence that local communities and health authorities can use to support their recommendations when responding to new liquor licence applications.
How will the project address the issue?
This project proposes to undertake a cost impact analysis of liquor licences in NSW, establishing both the unit cost and total cost of alcohol-related harms to a local area. The North Sydney Local Health District together with the Central Coast Local Health District and the Prevention Centre will analyse international evidence on the associations between outlet density and harms with NSW-specific data on local area characteristics from national, state or local administrative data, such as the Australian Urban Observatory, NSW Health, Bureau of Crime Statistics and Research, and Liquor and Gaming.
What are the expected outcomes?
- Strengthen NSW Health responses to liquor licence applications by accurately estimating the economic costs to the community.
- Support health and community organisations to effectively review the impact of liquor licence applications in local communities.
- Identify any potential thresholds at which the health costs of liquor licences outweigh the economic benefits.
- Integrate potentially into the liquor licencing decision-making system to support the Liquor Licensing Authority with liquor licensing decisions.
- Support licence applicants in determining appropriate liquor licence locations that are least likely to generate harm.
- Help fill the gap in evidence around the economic and health costs of liquor licencing.
What is the relevance for policy and practice?
The findings of the analysis will enable NSW Health to compare costs to health at a local level against the economic benefits generated by the existing liquor licences in that community. It is hoped this evidence will strengthen the quality of decisions in responding to liquor licence applications improving health outcomes in the community.
This project will be supported by a collaboration of researchers and policy makers from the Prevention Centre, Deakin University, Northern Sydney Local Health District, Central Coast Local Health District and the Centre for Alcohol and Other Drugs, NSW Ministry of Health.