Rethinking Alcohol Taxation Policy In Hong Kong: A Modelling Study

Abstract

Background: Uniquely among high-income economies, Hong Kong eliminated taxes on wine and beer in 2007-2008. Alcohol-related harm is preventable; the East Asia region has the highest alcohol-attributable fraction for cancer worldwide.1 Issues: Hong Kong’s policy of eliminating alcohol taxes is in stark contrast to WHO “best buys” recommendations to reduce alcohol-related harm. We model the population health impact of the reversing the 2007-08 taxation policies on alcohol-attributable harm and medical costs in Hong Kong. Methods: We conducted an epidemiological econometric modelling study to compare the impact of pre-2007 tax levels (80% on wine and 40% on beer) to 0% currently. Behavioural Risk Factor Survey (2004-2005, 2009-2010, 2014-2015) was used to estimate the price elasticities of demand for alcoholic beverages using the Almost Ideal Demand System (AIDS) model2, and parameterise alcohol consumption patterns. Alcohol-attributable health burden was estimated using the International Model of Alcohol Harms and Policies (InterMAHPv3)3 calibrated to Hong Kong-specific alcohol-related morbidity and mortality data from the Hospital Authority CMS and cancer registry. We applied pooled relative risks separately for men and women from World Health Organization 2018 Global Status Report on Alcohol and Health.4 Annual direct medical costs were estimated for each attributable condition using generalised linear regression on public sector healthcare service utilisation and adjusted for comorbidities. Sensitivity analysis was performed using Euromonitor sales data and 2016 Global Burden of Disease (GBD2016) for estimates of price elasticity and relative risk. Results: Reintroducing pre-2007 taxes reduces the alcohol-attributable disease burden: cancers by 36.1% (oral cavity and pharynx, 78.3%; oesophageal, 73.0%; laryngeal, 69.6%; colorectal, 24.2%; liver, 20.8%); liver cirrhosis by 60.8%; acute and chronic pancreatitis by 46.0% and 53.7%; and haemorrhagic stroke by 44.5%. Higher reductions were observed for wholly alcohol attributable conditions. Annual savings in direct medical care is estimated at USD 5.0 million (HKD 38.7m). Alcohol consumption and alcohol-related harms were higher for males than female. Conclusions: Reintroduction of taxes to reduce alcohol-related burden of disease merits consideration. Given the wide social and effects of alcohol harm the overall benefit to population health is likely to be even greater. References/Acknowledgements: We thank Department of Health and Hospital Authority for data access. This project was supported by Health and Medical Research Fund, Food and Health Bureau, Government of the Hong Kong SAR, China (03170067). 1. Rumgay et al. Global burden of cancer in 2020 attributable to alcohol consumption: a population-based study. Lancet Oncol. 2021 Jul 13; 2. Deaton A, Muellbauer J. An almost ideal demand system. The American Economic Review. 1980;70(3):312–26. 3. Sherk et al. The International Model of Alcohol Harms and Policies (InterMAHP). Version 3.0. 2019. World Health Organization. Best buys’ and other recommended interventions for the prevention and control of noncommunicable diseases. World Health Organization. 2017