In the World Health Organization (WHO) European Region, alcohol remains a public health crisis.
Despite the well-documented harms associated with excessive drinking — from cancer and liver disease to car crashes and early deaths — alcohol is now more affordable than it was two decades ago. The consequences are staggering: Europe holds the highest per capita alcohol consumption in the world, and the toll on public health systems is mounting.
This affordability crisis stems from stagnant or weak alcohol tax policies, with many governments failing to update excise duties to match rising incomes and inflation. The World Health Organization (WHO) is calling for urgent change and has released two new resources to support policymakers: a comprehensive report on alcohol taxation and a practical toolkit for health ministries and lawmakers.
The Affordability Paradox
While income levels in Europe have grown, alcohol prices — particularly wine — have not kept pace. As a result, people in the EU can now purchase significantly more alcohol for the same share of their income compared to 20 years ago. The new WHO/Europe report reveals that in 2022, only 29 of the Region’s 53 Member States applied any excise duty on wine. Thanks to the outdated EU Alcohol Excise Duty Directive (last revised in 1992), wine can still legally be taxed at a zero rate, rendering it the cheapest form of alcohol available.
The data is stark:
- Excise taxes contribute only 4% to the price of wine in the EU.
- EU residents can buy 46% more beer, 76% more wine, and 37% more spirits than the regional average.
- A standard unit of wine costs as little as Int$ 0.77 in the EU.
This low-tax environment fosters increased consumption — particularly among young people and heavy drinkers — yet political action has been slow. The WHO warns that without changes, Europe will continue to pay a steep health price.
A Policy with a High Return on Investment
Alcohol taxation isn’t just effective — it’s a smart economic policy. The WHO toolkit makes the case for excise taxes, which are targeted, adjustable, and proven to reduce consumption. Unlike general sales taxes, excise taxes can be set based on alcohol content, making them particularly effective in discouraging consumption of high-strength beverages.
Moreover, demand for alcohol is relatively inelastic, meaning that even as consumption drops, revenue often rises. This creates an opportunity for governments to reinvest those funds into health and social services, creating a feedback loop of public benefit.
Minimum pricing policies can also complement taxation by setting a floor price for alcoholic beverages, helping prevent the sale of ultra-cheap, high-strength drinks that contribute most to alcohol-related harm.
Evidence from the Frontlines
Countries that have adopted stronger taxation policies are already seeing results. In Lithuania, a significant increase in alcohol excise taxes in 2017 led to a 7% drop in per capita consumption and a 27% increase in tax revenue. Nordic countries like Sweden, Norway, and Finland maintain state-run alcohol monopolies that regulate both price and availability, contributing to lower rates of alcohol-related harm.
Simulations in Germany, Georgia, and Portugal show that even modest tax adjustments — like a 10% retail price hike — could reduce national alcohol consumption by up to 8.5% and cut mortality rates by 2.5%.
What’s Holding Back Change?
Despite the clear benefits, many governments remain reluctant to act, often citing concerns about public opposition or the risk of increased unrecorded alcohol production. However, the WHO’s analysis finds no direct link between higher taxes and illegal alcohol markets, especially when modern monitoring systems are in place.
The real challenge may lie in political will. As WHO Regional Adviser Dr. Carina Ferreira-Borges notes, alcohol taxation is one of WHO’s “quick buys” — cost-effective policies with measurable impact within five years. Yet the EU continues to drag its feet, failing to update its directive or introduce stronger regional guidance.
A Closing Window of Opportunity
With the 4th High-level Meeting of the UN General Assembly on NCDs approaching in 2025, now is the time for Europe to act. Alcohol taxation represents a rare win-win: it improves public health, generates revenue, and enhances health equity.
As health care systems grapple with soaring costs and rising burdens from noncommunicable diseases, there’s little reason to ignore the data. The tools exist. The evidence is clear. What’s needed now is leadership.
Source: WHO