FT minister: Freeze the award of alcohol licence permits

Monday, 01 Jun 2020 06:47 PM MYT

Federal Territories Minister Tan Sri Annuar Musa today said the government should stop
issuing new licenses to sell liquor until a guideline and legal revision can be done. — Picture by
Hari Anggara

KUALA LUMPUR, June 1 — Federal Territories Minister Tan Sri Annuar Musa today said the
government should stop issuing new licenses to sell liquor until a guideline and legal revision
can be done.

In addition, he said the premises licensing for shops selling alcohol beverages needed to be
tightened by the local authorities following the incidents of road accidents involving drunk
drivers.

“With accidents involving drunk drivers, it is apt to freeze the issuance of new permits for alcohol
retailing until a guideline and legal revision are done. The premises licensing from the local
authorities must be tightened,” he tweeted today.

Lately, several accident cases involving drunk drivers some of which also involved deaths had
taken place. — Bernama
Drunk driving on the rise in Malaysia
Athira Nortajuddin
19 February 2020

Just last week, a 39-year-old man was killed and his wife was seriously injured after their
motorcycle was hit by a car driven by a man believed to be intoxicated. He was a father to five
young children, while the driver was left unharmed in the accident. And three days ago, another
horrendous accident was reported where a suspected drunk driver rammed into a car and three
other motorcycles. Four people were injured and one person died at the scene of the
unfortunate event. All these drunk driving related accidents happened in Malaysia.

It seems like every week there is news on a road traffic accident involving a person driving
under the influence. It was reported that in 2019, Malaysia had the third highest fatality rate from
road traffic accidents in Asia and ASEAN, behind Thailand and Vietnam. And over the recent
Chinese New Year holidays, Malaysia saw 138 deaths from road accidents in a span of just
nine days.

The rampant drunk-driving accidents in Malaysia have even caught the attention of the country’s
Finance Minister, Lim Guan Eng. He said that “the government is looking at amending the
penalty under Section 41 (of the Road Transport Act 1987) for those who cause accidents
leading to death due to driving in a drunken state.” The current penalty for offenders is a jail
sentence of up to 10 years and a fine of up to RM20,000 (US$4,800). However, with the
possible law amendments, the Malaysian government will be increasing the sentence to 20
years and a RM100,000 (US$24,000) fine.
Source: United Nations Economic and Social Commission for Asia and the Pacific

Just recently, fellow ASEAN member state Vietnam introduced a zero-tolerance approach to
offenders that caused a 25 percent drop in beer sales. The new laws penalise drivers for even
the slightest trace of alcohol, while the maximum fine has doubled to VND8 million (US$345) –
on top of a possible suspension of a driver’s license for two years. Those caught driving under
the influence may face a fine of as much as VND40 million (US$1,700) and a license
suspension. Cyclists will also face fines up to US$25 for riding after drinking. Malaysia’s laws on
drink-driving have been criticised by the media and the public for being “lenient” compared to
laws in countries such as Vietnam.

But would enforcing tighter laws curb Malaysia’s drink-driving problem?

Some argue that although the long overdue stricter penalty could potentially help decrease
drink-driving incidents in Malaysia, many believe that it is not the ultimate solution in addressing
the issue. Some are calling for the death penalty on offenders – while some are calling for a
total ban of alcohol.

Understanding alcohol overdose

Research in 2012 by the Malaysian Institute of Road Safety Research (MIROS) showed that a
drunk driver is 13 times more likely to cause an accident, compared to a sober person. In
Malaysia, the blood alcohol content (BAC) limit is 0.08, which makes the country one of the
most tolerable in the world, alongside Singapore and the United States (US). Some countries
such as Taiwan and Japan would consider BAC of 0.05 and 0.03 respectively, as legally
intoxicated.

Studies have shown that a higher BAC is also associated with decreased reaction time. One
study pointed to an average decreased reaction time of 120 milliseconds – just over a tenth of a
second –associated with a BAC level of 0.08, the legal limit in Malaysia. So, when cruising at 70
miles per hour, a drunk driver would travel an additional 12 feet before reacting to a roadway
hazard. According to US Centers for Disease Control and Prevention (CDC), a BAC of 0.08
percent reduces a person’s ability to concentrate, lack of speed control, impaired perception and
self-control and sometimes even short-term memory loss.

Addressing the elephant in the room

Some viral posts on social media have created racial tensions among Malaysians claiming that
non-Muslims are responsible for most drink-driving accidents. According to a report in 2019, 61
percent of Malaysians are Muslims and alcohol is prohibited for them in Malaysia. Nevertheless,
drink-driving is a problem that concerns all as there are a significant number of Malaysian
Muslims who drink too. Wong Shu Qi, Member of Parliament for Kluang, a town in the southern
state of Johor argues that drunk driving “is not a racial issue” and that matters pertaining to
drunk driving should be taken seriously. She also added that anyone who breaks the law should
be punished.

Many “Don’t Drink and Drive” campaigns are seen in the West – ranging from radio and
television advertisements, billboards and even lectures in schools and universities. However, it
is rather rare for such campaigns to be conducted in great numbers in Malaysia as the subject
of alcohol is typically frowned upon – despite many consuming it across the country.

In a city like Kuala Lumpur in Malaysia where the night scene is comparable to that in major
cities around the world, it is understandable for the youth and clubgoers to partake in the vibrant
nightlife. Perhaps Oscar Wilde’s famous saying “Everything in moderation, including
moderation” should be applied to one’s alcohol consumption. With technology advances and
apps such as Grab, MyCar and other ride-hailing alternatives, there’s really no excuse to drive
after a night out. For one’s own safety and the wellbeing of others: just don’t drink, and drive.
The case for setting a minimum price on alcohol
More expensive alcohol may not sound like a great idea. But really, it is.
By German Lopez@germanrlopezgerman.lopez@vox.com Dec 26, 2017, 8:00am EST

That’s probably not something most people who enjoy beer, wine, or any other alcoholic
beverage think at the store or bar, but it’s a view widely shared by public health and drug policy
experts — especially as the effective price has fallen due to market competition, mass
production, and policies that have failed to keep up with inflation.

The concern about alcohol’s price has most recently come up through the Republican tax law,
which cut the federal excise tax on alcohol by roughly 16 percent. In the lead-up to the vote,
many economists argued that, if anything, the tax should be increased — as much as four times
over — to make up for the external costs related to alcohol, from drunk driving to liver cirrhosis
to the spread of sexually transmitted diseases.

But there’s another policy that could be used to raise the price on alcohol, if lawmakers want to
seriously address this issue: a national minimum unit price on alcohol. This is something that
Canada already does, that some states do, and that parts of the UK are considering following a
court ruling that allowed Scotland to move forward with its own minimum pricing policy. It has
the advantage of being more targeted than a tax: While a tax is applied to all alcoholic
beverages, a minimum price is more likely to impact cheap booze that’s very often bought solely
to drink in excess.

Okay, that’s nice. But why the hell should the government have anything to do with your booze,
right?

The basic argument here is that alcohol can be dangerous — but its often low price doesn’t
always account for that. This gets into what economists call an “externality”: a side effect of a
product that has a negative impact on society as a whole but isn’t reflected in its price, which
can skew consumers toward favoring or embracing a cheap product that is in fact dangerous.
Think carbon-based fuels, which can be much cheaper than alternative fuels that don’t
contribute as much or at all to global warming. A product’s price should reflect its externalities
so there is a deterrent to excessively consuming it.
Alcohol definitely has some big externalities: Excessive drinking is linked to 88,000 deaths each
year in the US, making it the third leading cause of preventable death in America after smoking
and the combination of poor diet and physical inactivity. Alcohol has also contributed to the rise
in deaths in the opioid epidemic, since drugs like opioids are often used alongside booze — and
that increases the chance of overdose due to how both drugs interact once consumed. Indeed,
both alcohol-related and opioid overdose deaths have risen in the US for years.

And death is only one external cost of alcohol, with others including more crime, car crashes,
and reduced economic output.

Much of this is enabled by cheap alcohol, which, based on the research, makes it easier to drink
in excess. So maybe it’s time to try a different approach.

How a minimum unit price works

A minimum unit price on alcohol isn’t new. But it’s received some renewed attention in policy
circles this year after a court ended a years-long challenge against Scotland’s minimum pricing
plan, prompting other parts of the UK to consider the policy.

The basic idea is that the price of alcohol — or at least some alcoholic beverages — is too low,
enabling excessive drinking. So raising the price could help cut back on excess boozing, which
would in turn produce all sorts of public health and safety benefits.

The research backs this up: A 2013 review of the research by Tim Stockwell and Gerald
Thomas at the Centre for Addictions Research in Canada found that, based on data from
Canada, “a 10% increase in average minimum price would result in the region of an 8%
reduction in consumption, a 9% reduction in hospital admissions and a 32% reduction in wholly
alcohol caused deaths — with further benefits accruing two years later.” Negative side effects,
such as people resorting to potentially dangerous bootlegging to get cheaper alcohol, were
minimal, the review found.

Under the policy, the government sets the minimum price on every alcoholic beverage.
Businesses and stores can then decide to sell alcohol at the minimum price or above it, but not
below.

Prices can vary depending on the type of alcoholic beverage. In British Columbia retail outlets,
for example, the minimum price for packaged beer (in bottles and cans) in 2016 was $3.19 (in
Canadian dollars) per liter, while the minimum price was $6.44 per liter for wine and $27.88 per
liter for spirits.
There are two big reasons to do this over a traditional excise tax.

First, an alcohol tax affects all alcoholic beverages. But a minimum price hits a smaller pool of
cheaper products. In doing this, the minimum price targets excessive drinkers, because they
tend to be, according to the research, bargain shoppers, while moderate drinkers are less likely
to hunt down the lowest prices.

There’s a simple economic explanation for this: If you’re a heavy drinker, alcohol is simply going
to make up much more of your budget — so you’re going to look for cheaper stuff to cut down
costs. After all, you’re not in it so much for the taste, but just to get drunk. So who cares if you
have to buy a cheap, gross malt liquor?

If you’re a moderate drinker, though, you don’t have to worry so much about price. Since you
don’t drink that much, whatever you prefer and buy — whether it’s a six-pack of beer or a nice
bottle of wine — will be a small, less frequent part of your budget.

“If I drank whiskey every single day, I would definitely bargain shop for whiskey,” Keith
Humphreys, a drug policy expert at Stanford University, told me. “But because I only drink
whiskey once every six months, I don’t really care what it costs.”

To envision how this works in the real world, Humphreys gave me a hypothetical of two people
with similar incomes.

One is Sally, who likes to have a beer occasionally after a tough day at work. She goes for her
favorite: Budweiser. (Don’t judge Sally.) Each 12-ounce can of beer costs her $1 per unit of
alcohol.

Then there’s Joe. He just wants to get drunk every night, with little care for the taste. He tried to
do this with Budweiser before, but it was too expensive. Then he figured out that malt liquor in
40-ounce bottles has way more kick per dollar. So he started to buy that. This ends up costing
him about 30 cents per unit of alcohol.

Now the government raises the minimum price of alcohol to 50 cents per unit. In this case, Sally
isn’t affected at all since her Budweiser is already $1 per unit, but Joe’s costs go up. So Joe has
to cut back on his drinking, since he can’t afford it anymore.

This is just one hypothetical, but it shows, generally, how minimum pricing hits heavy drinkers
harder than moderate drinkers.
Another benefit to minimum prices over alcohol taxes: Businesses get to keep the revenue from
the minimum price. This mitigates the potential impact a higher price of alcohol — that aims to
reduce consumption — may have on the economy and jobs. “It tends to be an even break,”
Humphreys said. “[Merchants] have fewer people buy stuff, but they’re charging more.”

This does mean that the government will miss on some potential revenue compared to an
excise tax, some of which could have been used for programs that further combat excessive
alcohol consumption. But this does have an upside: It upends some of the perverse incentive
governments may have to encourage drinking — since it won’t have as many revenues based
on how much alcohol is sold.

Of course, an alcohol tax and minimum pricing can also go hand in hand if necessary. The
general idea is alcohol’s price is too low, so the government should take steps to make drinking
more expensive. Any policies to that effect are a gain, at least from a public health perspective.

A higher alcohol price targets excessive drinking in particular

A common refrain regarding higher alcohol prices, whether forced through higher taxes or
higher minimum prices, is they unfairly target and hurt all drinkers, even responsible ones, and
that people who drink excessively — and may be addicted, after all — are going to drink no
matter what the price is.

This isn’t true. For one, minimum prices only raise the price on booze that’s below the, well,
minimum price. That won’t affect a lot of alcoholic beverages, particularly the fancy expensive
stuff that many moderate drinkers, who are in it more for the taste than for getting as drunk as
possible as cheaply as possible, seek out. That’s part of why studies show that a minimum price
affects heavy drinkers the most.

With a higher alcohol tax, there’s another reason the impact is mostly felt by heavy drinkers: If
someone is only buying a six-pack of beer or one bottle of wine a week, then a price increase
of, say, 50 cents probably won’t mean much. But as someone buys more and more, that extra
cost builds up — and eventually becomes inhibitive.

The research supports this, finding that a higher alcohol price not only gets people to drink less
but has a particular impact on excessive drinking and its negative outcomes.

The Task Force on Community Preventive Services in 2010 reviewed the research on alcohol’s
“price elasticity,” which is how much consumption changes with price. The results were clear:
“Nearly all studies, including those with different study designs, found that there was an inverse
relationship between the tax or price of alcohol and indices of excessive drinking or alcohol-
related health outcomes. Among studies restricted to underage populations, most found that
increased taxes were also significantly associated with reduced consumption and alcohol-
related harms.”

Other research shows that price increases lead to positive public health outcomes. David
Roodman, a senior adviser for the Open Philanthropy Project, has conducted really thorough,
impressive reviews of the research, from the effects of incarceration on crime to the domestic
economic impacts of immigration. He also in 2015 took a look at the research on alcohol prices.
His findings were incredible (emphasis mine):

The literature on this topic is large, and at first glance it seemed that the high-quality studies
contradicted each other. Yet as I dug deeper, I found a pattern: the larger the experiment — the
larger the price change — the clearer the effects. In the end, I believe the preponderance of the
evidence says that higher prices do correlate with less drinking and lower incidence of problems
such as cirrhosis deaths. And I see little reason to doubt the obvious explanation: higher prices
cause less drinking. A rough rule of thumb is that each 1% increase in alcohol price reduces
drinking by 0.5%. Extrapolating from some of the most powerful studies, I estimate an even
larger impact on the death rate from alcohol-caused diseases: 1-3% within months. By
extension, a 10% price increase would cut the death rate 9-25%. For the US in 2010, this
represents 2,000-6,000 averted deaths/year.

To put it another way, paying about 50 cents more for a six-pack of Bud Light would probably
save thousands of lives every single year.

This is a conservative estimate. It only counts deaths from alcohol-caused diseases. The
number of saved lives would be higher if it accounted for alcohol-related deaths due to violence,
car crashes, and other problems.

And yes, a higher alcohol price would have an effect in those other areas as well. A 2010 review
of the research in the American Journal of Public Health, for example, concluded, “Our results
suggest that doubling the alcohol tax would reduce alcohol-related mortality by an average of
35%, traffic crash deaths by 11%, sexually transmitted disease by 6%, violence by 2%, and
crime by 1.4%.”

In short, higher alcohol prices — whether set through minimum pricing or taxes — really do
reduce alcohol-related problems, particularly heavy drinking.
A common counterargument is that higher alcohol prices or taxes could lead to job losses, since
the alcohol industry may be forced to fire workers or hire fewer people to make up for the profits
lost as a result of the taxes and as people cut back on their drinking. But studies and
researchers have found that the revenue from the taxes and the spending shift from alcohol to
non-alcohol products can lead to, on net, more jobs.

But even if higher alcohol prices lead to fewer jobs in some cases, they could still be worth it.
Jobs aren’t everything; public health and safety matter too.

Another common case against higher prices on alcohol is that these policies are regressive and
affect the poor more, because low-income people are less likely to be able to afford cheaper
alcohol.

A 2014 study in The Lancet demonstrated that while it may be true, the counterclaim only tells
half the story. The other side: Low-income people also see the biggest health benefits as a
result of a minimum unit price on alcohol because the higher prices are more likely to have an
effect on them — and get them to cut back on drinking. The study concluded, “If, as argued by
some commentators, reductions in consumption itself induced by policy are negative effects,
then our results suggest a minimum unit price has a mixture of regressive (consumption) and
progressive (health outcomes) effects.”

Still, the study found that moderate drinkers, regardless of income, are hardly affected by a
minimum unit price. The biggest impact is on the heaviest — and most harmful — drinkers,
including low-income harmful drinkers, who are the most likely to buy a lot of very cheap booze.

Maybe you still oppose all of this on the grounds that the government simply should not be
involved in controlling behaviors. That’s up to you to decide. I personally think the government
should try to push people in society to be healthier and happier when it’s possible, especially
when the issue at hand is a product that, frankly, isn’t necessary for human life. People accept
this for all sorts of goods, from other drugs to cars to guns. So why not alcohol?

By simply raising alcohol’s price, America could save lives, combat crime, and slow the spread
of sexually transmitted diseases. That does mean you may have to pay a bit more at the
checkout line next time you buy your favorite beer, malt liquor, or chardonnay, or maybe you’ll
have to pass on the booze altogether — but the research suggests it’d be worth the cost.