Altering alcohol price by ethanol content: Results from a Swedish tax policy in 1992

In July 1992, the Swedish alcohol retail monopoly reset the taxes for alcohol sold in state stores according to absolute alcohol content. This provided a unique opportunity to examine the effects on alcohol sales within the three beverage classes (beer, wine and spirits) in a situation where price is purposely linked to alcohol content. The most notable effects of the taxation change were a substantial compression of the range of prices for spirits and wine and a corresponding expansion of the price spectrum for beer. Consumers appear to have responded to these tax changes by shifting away from beverage brands that became relatively more expensive. These results suggest that alcohol policy strategies to reduce total alcohol consumption should consider the entire price/quality spectrum as well as differences in absolute alcohol per volume across the three alcohol beverage types.