Infographic: 23 Effects of Alcohol on the Body

For alcohol afficionados out there, Healthline.com explains of the 23 effects of alcohol in one's body

Chart of the Day: Filipinos are the Biggest Gin Guzzlers in the world

Interesting data on global alcohol consumption

Filipinos reportedly holds the title as world’s biggest gin guzzlers, according to a recent study. 

Aside from gin, the Philippines ranks third in rum consumption.

From the Economist

ASIA'S growing middle classes are driving demand in the global spirits market. According to IWSR, a market-research firm, consumption last year grew by 1.6% to 27 billion litres—and China, the world’s biggest market, quaffed 38% of that. The national liquor, baijiu, accounts for a whopping 99.5% of all spirits consumed there, so China does not even feature in rankings of the best-known internationally consumed spirits, below. The most popular of these is vodka, mainly because it is drunk in copious amounts in Russia. Russians downed nearly 2 billion litres of the stuff in 2012, equivalent to 14 litres for every man, woman and child. (Unsurprisingly, perhaps, Russians are among the biggest drinkers in the world, according to the most recent World Health Organisation data.) The Filipinos' taste for gin can be attributed in part to good marketing and to the spirit's long-established toe-hold in the local market. Ginebra San Miguel, a firm that makes the world's two best-selling brands, started operations there in 1834.

Philippine gin consumption has been estimated as having a 43.5% of the world market, according to the ginvodka.org

The Philippines is the world’s largest gin market. The Philippines spirits market comprises nearly 50 million cases and is dominated by domestically produced spirits (98%). The Gin market, in which San Miguel is by far the largest brand, is 22M cases (62% of the market) but this is very approximate. In global terms, Philippine gin accounts for 43.5% of the world gin market. Imported gins account for a miniscule proportion of the market but some UK owned gin brands are produced locally.

I wouldn’t exactly equate gin consumption as signs of a “growing middleclass”, since local gin and rum are the cheapest alternative among available alcohol spirits.

I have no data on the domestic distribution of gin and rum sales for both local and international brands, but I suspect that the bulk of the sales from local brands may come from the provinces.

A growing middle class should translate to a shift to pricier alternatives.

By the way, vodka consumption represents as the largest share of alcohol mainly due to Russian consumption as noted above.

More Side Effects from UK’s Alcohol Taxes: Quality Deflation

I pointed out earlier of the unintended consequences from UK’s sin taxes on alcohol: damaging effects of bootleg alcohol, growth of the informal economy or of bootleg alcohol consumption and a shift in alcohol consumption patterns from the formal to the informal economy without reducing overall demand.

Here is another side effect: quality deflation from beer producers in the formal economy

From the CNBC.com

Britain's favorite pint of bitter is being watered down as austerity continues to bite and taxes rise.

John Smith's Extra Smooth, billed as "no nonsense beer", is being reduced from 3.8 percent alcohol to 3.6 percent in response to rising costs and reduced beer consumption. The move comes into effect next month and will save Heineken, the Dutch brewer that owns the John Smith's brand, 6.6 million pounds in duty annually. Beers with weaker alcohol content pay a lower rate of duty than their higher strength rivals.

Heineken, which is also raising the cost of the famous bitter by about 2.5 pence a pint, said it was bringing John Smith's "in line with competitor smooth ales that already sit at or below this alcoholic strength", including its biggest rival, Carlsberg's Tetley Smoothflow…

The Campaign for Real Ale, a lobby group, reckons that U.K. beer tax has risen by more than 40 percent since 2008, and now accounts for a third of the cost of a pint. Over the same period, the number of regular pub goers in the U.K. has declined by 3 million and more than 5,800 pubs have shut.

So Sin taxes essentially encourages low standards that not only reduces consumer satisfaction but importantly increases health risks.

Oh, expect the same outcome in the Philippines.

The Unintended Effects of Alcohol “Sin” Taxes: UK Edition

Politicians and their academic and media supporters fail to see the human action aspects of social policies. 

For sin taxes, not only do they overestimate their understanding on the objectivity of human values, they also treat mathematical models having the same effects on the people, particularly, they mistake tax revenues as having some linear correlations with tax rates.

The Institute of Economic Affairs in a study shows why the concept of Sin taxes backfires. Here’s the summary (bold and italics original) 

The Treasury is losing as much as £1.2 billion every year to the illegal alcohol industry. A new report, Drinking in the Shadow Economy, demonstrates how illicit alcohol consumption is becoming a permanent and growing problem due to excessive taxation. 

The damaging effects of counterfeit alcohol

Failing to deal with counterfeit and smuggled alcohol threatens not only public cash, but public health and public order. Counterfeit alcohol can contain potentially life threatening levels of dangerous chemicals, whilst alcohol smuggling is linked to other illegal activities such as drug dealing, violence and money-laundering.

High taxes are encouraging the growth of the illicit alcohol market

It is evident that high taxes are causing this boom in the illicit alcohol market. As prices rise, consumers are increasingly turning to the more affordable options available in the shadow economy. Government policy might intend to improve people’s health, but it may be having the opposite effect.

With the number of seizures of counterfeit alcohol rising five times between 2008/09 and 2010/11, and growing reports of counterfeit spirits being sold by both licit and illicit retailers, it is crucial that the government reconsiders its strategy in dealing with alcohol pricing.

High alcohol taxes do not reduce alcohol consumption

Contrary to popular belief, making alcohol more expensive is not an effective way of reducing drinking rates or the problems associated with excessive alcohol consumption. Britain and Finland have some of the highest alcohol taxes in the world and yet the amount of drink consumed in these countries is the same as in places such as France and Spain, where alcohol is more affordable.

Commenting on the report, its author, fellow of the Institute of Economic Affairs Christopher Snowdon, said:

“The government’s focus on maximising tax revenues is short-sighted and dangerous. Aside from losing money by encouraging consumers to find cheaper illicit alternatives, public health and public order are also being put at risk by high prices. Policy-makers ought to take the threat of illicit alcohol production seriously when considering alcohol pricing in the future.”

"There is a clear relationship between the affordability of alcohol and the size of the black market. Politicians might view the illicit trade as a price worth paying for lower rates of alcohol consumption, but this research shows that the amount of drink consumed in high tax countries is exactly the same as in low tax countries."

“Minimum alcohol pricing might seem like a quick fix to tackle problem drinking, but it is likely to cause many more problems by pushing people towards the black market in alcohol."

The complete study in pdf format here

Here are some interesting charts:

The shadow economy has tight correlations with corruption

So as with the relationship between shadow economy/corruptions vis-a-vis illegal and bootleg alcohol consumption.

Sin taxes has almost the same effects as the prohibition laws where the only difference is in the degree.

To quote the author of the study Christopher Snowdon 

Contrary to temperance rhetoric, high alcohol taxes are not necessarily good for public health because, although excessive alcohol consumption undoubtedly carries risks to health, so too does moonshine. Counterfeit spirits and surrogate alcohol frequently contain dangerous levels of methanol, isopropanol and other chemicals which cause toxic hepatitis, blindness and death. These are the unintended consequences one associates with prohibition, albeit at a less intense level than was seen in America in the 1920s.

It should not be surprising that excessive taxation encourages the same illicit activity as prohibition since the difference is only one of degrees. As John Stuart Mill noted in 1859: ‘To tax stimulants for the sole purpose of making them more difficult to be obtained is a measure differing only in degree from their entire prohibition, and would be justifiable only if that were justifiable. Every increase of cost is a prohibition to those whose means do not come up to the augmented price’ (Mill, 1974: 170-171).

Failure of Alcohol Bans in the Muslim World

I have been saying here that prohibition statutes are noble sounding “feel good” political actions that fails to accomplish their goals (in fact they make them worst). Said differently, politics will never eviscerate the natural laws of economics.

The Economist has a terse commentary on the status of alcohol ban on Muslim countries which seem to validate such premises (bold added)

NOBODY knows exactly when Islamic scholars decided that booze was sinful. In the 1970s political Islam led some countries such as Iran and Pakistan to ban alcohol, although many do not and exceptions are made for non-Muslims. In some countries the punishment for Muslims caught quaffing are severe: 80 lashes in the case of Iran. Things may get more arid yet as Islamist parties from Indonesia to Tunisia moot restrictions on alcohol. The number of drinkers varies by country, but some put the total at 5% of those identifying themselves as Muslim. Drinking may even be on the rise. Between 2001 and 2011 sales of alcohol in the Middle East, where Muslims dominate, grew by 72%, against a global average of 30%. That rise is unlikely to be accounted for by non-Muslims and foreigners alone. The black market for spirits flourishes in Libya, while Iranians are adept at producing home brew. Could Islam become more tolerant of drinking? A handful of scholars permit alcohol as long as it is not made from grapes and dates, because these are specifically mentioned in the Koran.

Black markets (and bootleggers) naturally emerge where prohibition laws occur. Yet the article has been reticent about the criminality and corruption related aspects which usually account for as the other forms of unintended consequences inherent to such bans.

I may add that the above data may have severely underestimated the state of alcohol production and usage given that these “illegal” acts are done underground or in the shadow economy.

The more interesting part is that given the apparent failure of the alcohol ban, political authorities appear to be rationalizing (e.g. not made from grapes and dates) the prospective easing of such bans as expressed through opinion of experts.

Prohibition laws fail because, as Professor Mark Thornton argues, (bold mine)

History also supports the finding that prohibition is impossible to achieve in the economic sense. Legislatures do enact prohibitions and establish penalties and enforcement bureaus. The actions of these bureaus to enforce prohibition decrees have an effect, and when a prohibition survives long enough to be enforced it is successful in a political sense. I argue, however, that prohibitions have no socially desirable effect.

Of course prohibition should not be evaluated against a higher standard than other laws. Murder is against the law, but not all murderers are apprehended, convicted, and punished. Likewise, to expect complete or perfect prohibition is unrealistic. Rather, prohibition will be measured against its public-spirited intentions, that is, to reduce consumption of a good in order indirectly to reduce social ills (such as crime, destruction of free will, drug-related deaths) and to promote social goals (family life, democracy, health, and economic development).

To the extent that prohibitions result in increased prices, they produce increased crime and political corruption. Higher prices for a prohibited product also result in the substitution of related products and the innovation of more dangerous substitutes. Prohibited products tend to be more dangerous than legal substitutes in many respects, the result of prohibition, not the product itself.

Therefore, to assume that more severe penalties or increased enforcement will result in the substitution of legal for prohibited products is to make an invalid conclusion.

People dream about a moral society, yet the best way to do this is through free markets.

President Obama’s Small Beer Brewery at the White House

Proof of President Obama’s reported alcoholism?

From the USA Today,

The Obama administration confirmed today it has added a new facility to the White House: A small beer brewery.

Officials discussed the brewery after President Obama told some Iowa residents that he had some of its product stocked aboard the bus he's using for a three-day tour of the Hawkeye State.

"There is a home brew, if you will, at the White House," said White House spokesman Jay Carney.

It’s one thing to get enamored with beer. But it’s another thing to get addicted with the foisting of free lunch beer social policies on the public.

Top 10 Alcoholic US Presidents: President Obama Tops the List

From the Top Ten List (hat tip LewRockwell.com)

Many US Presidents have a colourful past. Many of the Presidents on the list are/were alcoholics and took pride in their drinking habits. This article identifies them and who they are/were.

1. Barack Obama:

A 2010 news report surfaced surrounding Barack Obama’s drinking problem. The Daily Mail reported that the doctor recommended the President stop drinking excessively and stop smoking. This recommendation came after Obama’s cholesterol levels were up to borderline high.

2. George W. Bush:

Bush was no saint in the 1960s and 70s. Bush even admitted to substance abuse under the age of 40. He described this period as nomadic and irresponsible youth. This all occurred before he made a religious conversion and was enlightened by Billy Graham.

The rest in the top 10 alcoholic list:

3. Richard Nixon

4. Martin van Buren

5. Ulysses Grant

6. Franklin Pierce

7. James Buchanan

8. Franklin D. Roosevelt

9. William Taft

10. John Adams

Read them here.

That’s the top 10, which could mean that many others were likely drinkers too.

Ex- President Warren Harding during the Prohibition era drank bootleg whiskey which he also gave out to his guests. Talk about the highest executive of the land defying stupid arbitrary regulations.

Better drink than intervene. To President Obama, Bush and the rest of the political alcoholics, Cheers!

Social Drinkers Earn More than Non-Drinkers

Hear ye, Hear ye! Below should be good news for social drinkers.

In a 2006 research paper, Professors Bethany L. Peters and Edward Peter Stringham discusses the economic benefits of social drinking and how alcohol prohibition statutes negates these. [There are so many of aspects in life that goes against popular wisdom, which makes economics so interesting]

Here is the Abstract:

A number of theorists assume that drinking has harmful economic effects, but data show that drinking and earnings are positively correlated. We hypothesize that drinking leads to higher earnings by increasing social capital. If drinkers have larger social networks, their earnings should increase. Examining the General Social Survey, we find that self-reported drinkers earn 10-14 percent more than abstainers, which replicates results from other data sets. We then attempt to differentiate between social and nonsocial drinking by comparing the earnings of those who frequent bars at least once per month and those who do not. We find that males who frequent bars at least once per month earn an additional 7 percent on top of the 10 percent drinkers’ premium. These results suggest that social drinking leads to increased social capital.

Download the Paper here

I love beer, unfortunately I haven’t been to bars in years (only restaurants) and I don’t socialize much too.

Maybe I should…

From HS Dent

…before time catches up.