A possible way to get out of blind alley?

Remarks to international readers:

This Project has been developed to meet Swiss needs for a higher taxation on alcoholic beverages. It’s utopian, but it is different to all other tried variations so far. A main obstacle are the deep prices abroad.

As the European Union has launched a Programme of Public Health 2003 – 2008 including alcohol it is for me very clear, that this project could be the answer to the unsuccessful end of the lately tried harmonization of alcohol taxes in the EU. Each country could adopt a version which suites its special circumstances. The problems in the alcohol industry and the farming are all over very similar. If prices would be adjusted from country to country the problem of smuggling could be overcome and the chances for a Swiss project would also be much better.  All statements regarding Switzerland could be adjusted to the need of other countries.

Summary:

Starting Position

New Situation

Main Aims of the Project

Procedure

Example of a budget: Tax on all alcoholic beverages

To compare: Annual accounts of the Swiss Alcohol Board 1999/2000

Administration of the Project-Funds

Foundation for Alcohol-Politics

Chances

Hindrances

Starting Position

The introduction of a general tax on alcoholic beverages couldn’t be realized until now as a result of the strong behaviour of defense by the interested business cercles. This tax would be justified and desirable in many ways 

       As equivalent to the economic and social costs according to the principal that those who cause the costs should pay for them. (3 – 4 Mia. Swiss Francs.
 

       To reduce the consumption of those who consume a lot and of the young persons - and in consequence to bring down the damage caused by the alcohol use.
 

       To help financing the prevention tasks.
 

       To replace alcohol sponsoring in culture and sports by sponsoring by this project, if organizations agree to keep to a preventive culture within the organization.
 

       So far only the spirits have to contribute with taxes to cover the damage. As a matter of justice the other alcoholic beverages should be taxed as well proportionately. They also participate on the damages.
 

       Although the federal administration (BAG) as the interested commissions and the parliamentary alcohol commission wanted to introduce the tax, these proposals were always rejected by government and parliament. When the people and the economic sector understand that this project is to their favour, the politicians couldn't refrain from supporting the project.

New Situation

The European government delegates (including the Swiss ones) with their European Charta on Alcohol as well as the WHO with the European Alcohol Action Plan and the Federal Commission on Alcohol questions with its National Alcohol-Actionplan mention the necessity of these taxes. Within the EU there are also discussions in this direction going on.

The Swiss wine farmers fear great problems coming in regard to the selling of their products because of the globalisation of markets and the growing concurrence from abroad.

The explosion of costs in public health is very soon not any longer payable by the citizen with a normal salary. Reducing the damage caused by alcohol would bring a sensitive cost reduction.

The various effected steps of liberalization in the alcohol sector (opening-hours, reduction of taxes for spirits, etc.) demand an urgent compensation.

The undesirable rise of the sales of strong drinks after the reduction of taxes by the government should be undone very soon. A rise of this tax is very necessary and would be possible in the line of this project.

Main aims of the Project

To cover the social cost caused by alcohol in Switzerland.

Improving the quality of life and the public health by reducing the damage caused by alcohol in Switzerland.

Improvement of chances of young people by reducing their alcohol consumption and the consumption of their parents.

Procedure

The question is, who takes the initiative? We could think for example of the following persons and groups:

·        A student who uses the project for his scientific paper; event. in cooperation with one of the following institutions:

·        One of the big institutions or commissions in the field of alcohol prevention.

·        A foundation in the context of health

·        The Swiss Union of Farmers or fruit farmers

·        The Swiss Alcohol Board, the Swiss Financial Department, the Federal administration of health BAG.

·        A big social institution

·        The conference of the directors of health of the cantons

Analizing study if the project is executable:

It would be necessary to have discussions with:

·        Delegation of farmers

·        Health insurances

·        Churches

·        Professional circles

·        Political parties

·        NGOs

·        Cantons

·        Politicians

·        The federal administration

 (e.g. Foundation Think Tank, Workshop for the future, student group)

Detailed planning of the concept

Examine if the project is in line with EU-regulations (WTO is o.k.)

To bring the concept into the political process.

National Conference

Perhaps it could be meaningful to inform all interested groups at the same time at a big national conference and go afterwards to discuss the details. Exact figures had to be available already.

Commission for the voting campaign and fundraising

Example of a budget. Taxes on all alcoholic beverages

Tax depending on the portion of pure alcohol per liter and per capita, to cover the estimated social cost of 3,5 Mia. Swiss Francs.

9L per person alcohol 100% and 7 Mio. inhabitants gives a total of 63 Mio.L alcohol 100%.   Damage: 3,5 Mia. SFR

3,5 Mia. ./. 63 Mio. L = ca 55 SFR /L alcohol 100%.

At a proportional partition:

Beer           5 Vol.%    2.75 SFR/L

Wine        10 Vol.%    5.50 SFR/L

Spirits      45 Vol.%  24.75 SFR/L

Regarding spirits and those beverages especially liked by youth (Alcopops) the tax should be put up. (In the list not effected)

53% of the population consume only 9% of all the alcoholic beverages. The portion of taxes on these 9% could be returned back as reduction on the direct national taxes or on health insurance premiums. (Per person 45 SFR) More than half of the population would therefore not be affected by the tax.

Administration of the Project-Funds

The money could be deposited at the National Bank of Switzerland. The administrative body would authorize the National Bank to pay expenses, not used amounts would be transferred at the end of the year to the AHV/IV (National old age pension fund)

The taxes should be paid by the end user according to the VAT. The necessary infrastructure is more or less available.

To simplify the taxation there could be tax groups according to the alcohol content. E.g. Wine with 9-11 Vol.% get the same tax. On this occasion the duty of declaration of the content on the label could be introduced. (If not already realized by then.)

Distribution of the income

The rules of how to distribute the money should be standardized also in the cantons. To guarantee a neutral judgement of the demands there should exist an independent body for complaints. Eventually separately according to the group of receivers.

Contribution to AHV/IV

AHV and IV (Insurance for Invalids) should get as contribution each 50%. IV is in a bad position now. It is cutting their financial help to institutions of rehabilitation, that they are even forced to close. IV gives contributions to alcohol-dependants and institutions for alcohol rehabilitation. It has also expenses by alcohol related accidents. Means that are not used by other positions go at the end of the year to AHV/IV.

Foundation for Alcohol-Politics

To a maximum of 5 Mio. SFR go to an independent Foundation for Alcohol-Politics.

It could help basic groups, development aid in connection with alcohol-politics in Switzerland and abroad.

E.g. it could offer loans for starting to neighbour-countries which want to introduce our project as well. This would reduce smuggling at our border.

The past has shown that the counterpart has the money to successfully fight against every proposition from the public health sector. With such an independent foundation this would change. We experienced that government and administration do not dare to help morally or financially to propositions in the field of alcohol prevention. They believe it correct to be neutral. This has to do with the political parties, with economic bindings and even with the personal behaviour regarding alcohol consumption.

Of course this independent foundation would be accountable. Not used means had to be transferred at the end of the 2^nd year to AHV/IV.

Chances

Our agriculture is at the moment exposed to a heavy burden. In the background the actual danger of diseases there is still going on a change in structure which is due to the globalization of markets. This project could bring to a part of the agriculture, e.g. the wine farming,  the answer to their deep concern about the future. The wine farmers should have a great interest in influencing other groups to build an alliance for bringing this project to a success, to convince the voting people.

The fact that more than half of the population would profit from a refund of the taxes should be a strong argument for acceptance.

As soon as the consumption would go down, everybody would get the profit of reduced social cost.

In the cantons could those sports and culture events which do without alcohol advertisement and have some sort of a preventive character benefit from sponsoring by the project. The same would happen for national events.

The advertising industry which so far fought against limitations of alcohol promotion for economic reasons would get new lucrative orders what would certainly reduce their opposition.

The new income for AHV/IV could show additional VAT-percentages to be unnecessary for the next years.

The project would have a positive effect on the health of our youth and of the hard young drinkers, although they are not interested in this fact at the moment.

The union of the small industries and trade will have difficulties in agreeing. But may be they come one day to understand that all money which doesn’t flow into the consumption of alcoholic beverages is not lost for the whole economy. It just goes into other branches or as savings on bank accounts where it is reinvested into the economy.

Hindrances

“The modest alcohol-consumer , that is more than half of the population, could feel discriminated. What he enjoys will be demonised. It is not his fault when some people cannot get under control their consumption”

The success of this project would depend a lot on the convincing of these people that

·        they profit financially by tax refund, reduction of health costs (insurance, health insurance and income taxes).

·        their quality of life will rise when the roads become safer, the number of alcohol related divorces, accidents, crimes with violence will be reduced

·        they contribute with their drinking habits that alcohol has entered all domains of life and that this social reality is a very bad environment and not useful as a good example for our youth and to give credibility to drug prevention.

·        the nearly unchecked marketing, aiming at more sales has made alcohol to be the social-medical problem number 1 in Switzerland. And this has been tolerated by most of them.

That means the personal co-responsibility would have to be seen, the necessity of supporting this project and the need of making alcoholic beverages more expensive.

A change in drinking habits would not be necessary for the real modest drinkers.

This would ask for a prevention campaign with new targets and a bigger effort.

“The tax would bring more hardship to the poor, for rich people it wouldn’t matter. The project is unsocial”.

This would be correct for the risk drinkers. But this is a wanted effect, consumption should go down. If the risk consumption of rich people is not reduced it is regrettable but this group is with about 5% of the taxpayers not important. As privat patients they pay their hospital costs in privat hospitals mostly themselves. As already mentioned the lower and middle classes would not be discriminated when consuming moderately.

Because a rich person very easily can engage a professional driver for his car when he lost his driver licence society will not give up punishing drink driving.