RTDs

July 19th, 2012 at 11:00 am by David Farrar

Isaac Davidson at NZ Herald reports:

Liquor industry executives have met Justice Minister Judith Collins and urged her to quash a law change which will ban the sale of high-strength “alcopops” in bottle stores. …

In May, the minister said there was a growing concern about sweet-tasting drinks that were high in .

In the Law Commission report the reforms were based on, the commission said the most common drinkers of RTDs were 14 to 24-year-olds, in particular women.

Actually the Law Commission did not recommend any measures specifically against RTDs. They correctly said that if you did this, then substitution is likely to occur. The Government inserted this proposal in the bill – it was not recommended by the Law Commission.

I blogged last year that Curia did some extensive research work for Independent Liquor in this area. The findings (from a phone poll, two point of sale surveys and half a dozen focus groups) were that around half of RTD drinkers but 8% RTDs and around half 5% RTDs. Of those who buy 8% RTDs (and they tend to be older men, not young women), many said that if RTDs are restricted to 5%, they would substitute to other products such as spirits.

We found that the average strength of a self-mix is 13% (and that is at the beginning of the night – it increases during the night), so what the proposed law change will do is move many RTD drinkers from an 8% product to a 13% product. Stupid right? This part of the bill will, in my opinion, significantly increase harm from alcohol.

Australia tried something similiar – what they did was put a special tax on RTDs. Sure enough, RTD sales dropped. But sales of spirits increased.

Tags:

29 Responses to “RTDs”

  1. Manolo (14,016 comments) says:

    Wowsers, tin-pot despots, tyrants, and control-freaks fo the world, unite!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  2. Pete George (23,676 comments) says:

    I did some (dry) research on this:
    – Alcohol content 5%, 7%, 8%
    – Can and bottle sizes 250ml, 330ml and 2 litre cartons
    – Most are between $2 and $3 dollars each (cartons $23-25).
    – A rough calculation – this is a half billion dollar per year industry

    I don’t drink them so don’t know much about the market and what might affect it.

    Alcopops are often linked to preloading’ – getting pissed cheaply before going out clubbing. If a lot of young people drink them then reducing alcohol levels may make a difference.

    Younger people in particular seem to have embraced the convenience market world – some may change to mixing themselves, but some will probably still prefer the simpler off-the-shelf approach.

    Forcing alcohol levels down is different to forcing prices up. Will they care about a drop from 7% or 8% to 6%? Most may hardly notice the difference except maybe not feeling so trashed the next day.

    [DPF: In the focus groups many said they do not like the 5% RTDs – one called them lolly water. I agree less impact in reducing from 8% to 6% than to 5%.]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  3. bhudson (4,740 comments) says:

    Australia tried something similiar – what they did was put a special tax on RTDs. Sure enough, RTD sales dropped. But sales of spirits increased.

    DPf,

    Did the Aussies place a special tax across all RTDs, or was it targeted to higher alcohol content (or some other characteristic.)

    I could see how smacking the price of someone’s JD & cola, or Woody & cola, might lead to a switch to self-mix, but I think the result might be a little different if excise was targeted at highly sweet RTDs – try to change the outcomes by shifting the identiifed problem drinking to drinks with characteristics that are less favoured (less sweet and drinkable = propensity to drink less = reduced pre-loading issue).

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  4. bhudson (4,740 comments) says:

    Pete,

    They can still get hammered on 5% – it just takes a couple more drinks in a little less time.

    I don’t think the problem is easily solvable, but if economics points them to drinks with less favourable characteristics (less sweet and drinkable) then that has a greater chance of reducing the amount and pace of drinking in the target group.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  5. Pete George (23,676 comments) says:

    drinks with less favourable characteristics (less sweet and drinkable)

    They could legislate to make them all taste like DB Green (that wouldn’t be less sweet), or Bavarian or Cold Duck (anyone remember them?) – that would be sure to cut consumption down.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. anonymouse (719 comments) says:

    We found that the average strength of a self-mix is 13% (and that is at the beginning of the night – it increases during the night)

    I am assuming this info was obtained from the focus groups, now did you actually allow the people in the group to get smashed, or was this based on pure recollection…

    [DPF: That was from the point of sale research, of people buying spirits. We asked them what ratio approx they tended to mix at – 10/90, 20/80, 30/70 40/60 etc etc. A scaringly large number of people said 50/50 which is a 20%+ mix.]

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  7. Weihana (4,572 comments) says:

    Teenagers want to get shitfaced and they will do that whether they have to buy more drinks or not. The problem is NOT THE DRINK. The problem is the drinkER and that is something to be dealt with by parents (if possible).

    Creating a plethora of unnecessary rules around drinks is not going to have any impact on the attitudes and behaviour of the teen determined to get drunk. The way people talk is as if teens accidentally wind up drunk because of the environment they are in rather than as a consequence of determined effort on the part of the teen. It’s this attitude which tends to absolve the teen of personal responsibility and allows them to excuse their behaviour on the basis of peer pressure, the government etc. etc. etc.

    It’s no wonder that children are taking longer and longer to mature because we set the bar so low for them. Nothing is their fault, it’s their friends, it’s the alcohol, it’s the advertising, it’s the government’s lack of action to impose more rules etc. etc.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. Manolo (14,016 comments) says:

    I don’t think the problem is easily solvable, but if economics points them to drinks with less favourable characteristics (less sweet and drinkable) then that has a greater chance of reducing the amount and pace of drinking…

    Mr bhudson, since when is the duty of politicians to dictate the flavour of drinks?
    Hands off, mate, or you could be accused of being a loyal Labour lite member.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  9. bhudson (4,740 comments) says:

    Manolo,

    I’m not in favour of a ‘do nothing’ approach to problems. My suggestions is a much lighter handed approach than many alternatives that have been bandied about:

    – increase alcohol purchase age
    – increase excise across the board
    – prohibit alcohol advertising
    – reduce availability (some are still calling to have it removed from supermarkets IIRC)
    – dictate to businesses where they can and cannot display alcohol in their stores

    Like it or not, there are going to be some changes adopted around the regulation of alcohol. Far better they are targeted and a lighter handed attempt to address a specific issue, than some heavy handed, blanket changes that penalise everyone unequally (I.e. penalise the responsible for the behaviours of the less responsible.)

    Now that would be full-blown Labour

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  10. Weihana (4,572 comments) says:

    bhudson,

    How is a raise in the age not a punishment for everyone (within that age group)?

    How is an increase in tax not a punishment for everyone?

    How is a prohibition (or regulation) on advertising not a punishment for everyone?

    How is a reduction in availability not a punishment for everyone?

    Obviously your definition of “targeted” differs to mine. My definition of targeted is that the individual causing the disturbance, or otherwise causing problems, receives the sanction. Your approach seems to excuse the individual and puts the blame on youth/price/advertising/availability.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  11. bhudson (4,740 comments) says:

    Weihana,

    Perhaps you might try re-reading. I did not claim that those measures were targeted – in fact I was very clear that they are heavy-handed alternatives that blanket everyone together.

    By all means disagree, but please do those you disagree with the service of at least reading what they put down.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  12. RRM (9,993 comments) says:

    I notice too many criminals these days are using motor cars to flee the scenes of their crimes. And too many teenagers are speeding and crashing their cars with catastrophic results.

    We evidently have a petrol crisis in New Zealand.

    I propose we IMMEDIATELY put an additional tax on petrol, (especially the really high-octane 98 petrol) and ban the sales of petrol to persons under the age of 21.

    That will surely put an end to the scourge. :mrgreen:

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  13. Weihana (4,572 comments) says:

    bhudson,

    Sorry I didn’t read it correctly. My apologies. :)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  14. Psycho Milt (2,419 comments) says:

    I notice too many criminals these days are using motor cars to flee the scenes of their crimes.

    Buggers are using the phone network too. Something must be done!

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  15. bhudson (4,740 comments) says:

    Weihana,

    No problem. A quick scan catches us all out at one time or another. :-)

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  16. marcw (254 comments) says:

    Making the availability of RTD’s more difficult will be a disaster for the immature set of drinkers we are currently producing.
    If there are no RTD’s, then the affordable purchase will be a bottle of spirits and a 1.5 litre bottle of coke/lemonade.
    Halfway through the bottle of spirits, the coke mixer runs out.
    I can’t imagine the tweenies dashing off to buy another bottle of coke.
    Result, the immature drinkers finish off the bottle of spirits straight, usually on a dare.
    End result, a spike in the number of visits to ICU by unconscious teenagers (good outcome) or, more likely, a rash of funeral notices in the papers on Mondays.
    At least the RTD’s give some control on the strength of the mixes being consumed, and vomiting/hangovers are the most common effect.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  17. swan (665 comments) says:

    A scaringly large number of people said 50/50 which is a 20%+ mix.]

    Nothing scary about. I drink my g and t’s like this. But I only have 2*
    * sometimes 3

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  18. MT_Tinman (3,246 comments) says:

    Pete George (13,884) Says:
    July 19th, 2012 at 11:26 am
    drinks with less favourable characteristics (less sweet and drinkable)

    They could legislate to make them all taste like DB Green (that wouldn’t be less sweet), or Bavarian or Cold Duck (anyone remember them?) – that would be sure to cut consumption down.

    Well, no, it wouldn’t – evidenced by the fact that you know (knew) how bad DB Green (DB Brown with another label and a minimum alcohol content), Bavarian and Cold Duck were.

    On topic, making alcopops 5% instead of 8% will simply remove the alcohol taste from the drink, increasing not decreasing consumption.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  19. Joseph Carpenter (214 comments) says:

    Well said Mr Tinman. It’s been my observation (anecdotal) that the high alcohol/premium spirit/dry blend RTD’s are brought by grumpy old wealthy males (like me) who will pay the premium, don’t like wine or beer much but like a convenient spirit based drink to take to the barbeque, meal, party, boat, etc. It’s the teenagers who want the best alcohol bang for the buck who get the ghastly 5% lolly water mixes like Amp’d/KGB/Cruzer/Amy’s/Vault/Malibu etc which are basically water + flavoured sugar syrup + 5% pure grain alcohol.

    Here’s an idea that’s so crazy it might just work: if we have to have an excise tax on alcohol, lets just tax it all at exactly the same rate for the actual ethanol volumetric content and not try to have the State discriminate for or against a particular brand/flavour/type/container/mix/price/distribution channel/perceived consumer of beverages based on some politicians brainfart.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  20. edhunter (551 comments) says:

    In Oz they’ve taxed it across the whole range of RTD’s & there are no 8%er’s, & it’s pissed a lot of people off. For instance a 6 pack of bundy & cola 4.8% is about $24.00 bucks, you can pick up a bottle of bundy for around $30.00+ . The convenience of the RTD & knowing exactly how much you’ve drunk & having a pretty good idea of where you are in the limit stakes i.e. I’ve had 4 cans over 2 hours therefore I should be right, as opposed to the ‘I’vish only had 4 cuntstable that me mate Duncan poured for me” has well and truly put a huge dent in the RTD market & definitely led to bigger sales of both spirits & beer. Also if you really want to you can get 4litres of chateau de caske @ 10% for $12.00 bucks

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  21. hj (7,059 comments) says:

    My father was a prisoner of the Japanese in world war 2. The day before he died of pancreatic cancer the two of us mended his letter box. It had been smashed by boozed students during the previous night. Sitting nearby was a bottle of pink alchopop, it was the first I had ever seen. later I read that the person who started alchopops died in a helicopter accident. He was worth $600m (from memory).

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  22. Mark Unsworth (41 comments) says:

    Answering Bhudsons question-here is what happened in australia where they targeted all RTDs

    What happened in Australia when the government imposed a 70% tax increase on RTDs in April 2008 ?

    Australian Bureau of Statistics consumption data ( ‘000,000 litres pure alcohol))
    2007 2008 2009 2010 2011
    RTD 18 18 13 12 12
    Beer 77 74 81 79 77
    Wine 62 62 65 68 68
    Spirits 20 22 23 23 24

    Total 177 181 182 184 182

    The tax had an immediate impact on RTD consumption,down by approx 40% but this was balanced by increases in wine and spirits consumption leaving no change in the total amount of alcohol consumed at all.A fascinating example of a misguided public policy intervention driven by emotion rather than logic .

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  23. expat (4,050 comments) says:

    If you’re going to show 3 years after you should show 3 years before in those stats.

    Plus consider the volume sucked back by youngsters.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  24. Mark Unsworth (41 comments) says:

    just a bit of data re “sweet RTDs” they are actually the same sweetness as what you would mix yourself .Obviously different if you used diet products
    Coke 10.6 Brix
    Spree Cola 10.2 Brix

    Sprite 10.6 Brix
    Spree Lemonade 10.7 Brix

    Bourbon and cola 5%
    6549 Cody’s 11.05-11.3 Brix

    Cruiser Ice 5% 10.8-11.1 Brix
    6473A

    Note 5% alcohol adds 1 brix.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  25. Mark Unsworth (41 comments) says:

    expat
    I have the 2006 data on me now
    Beer 76,wine 58,spirits 19 RTDs 16 =total 170
    You can get this all in more detail from the Aust Bureau of Stats website

    The stats don’t show who drinks what but I have seen no claim anywhere that ” youngsters” in Australia slowed down their drinking when the tax was raised by 70%.They just substituted to spirits which Davis research showed they will do here and the Law Commission warned would happen .

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  26. expat (4,050 comments) says:

    Stats and stats but you cant deny NZ Inc has a drinking problem and the answer isn’t to make cheap piss cheaper.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  27. Pete George (23,676 comments) says:

    If you want to have a better look at Mark’s data I’ve formatted and posted it here:
    http://yournz.org/2012/07/20/rtd-debate-contributed-facts/

    It seems to confirm that fiddling with one drink type will just shuffle the market.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  28. expat (4,050 comments) says:

    Thats great but a) it’s a selective sample of data b) perhaps we need a tax rise on all piss c) an age increase etc

    I don’t think we should give too much credence to a consultant for the biggest RTD floggers in the country, in fact the company that grew the market here if I recall correctly. It’s like listening to the Black Power advocate for unfettered tinnie sales.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. Mark Unsworth (41 comments) says:

    Expat,check the data for yourself if you don’t trust me>I am not arguing that NZ doesn’t have a problem and I didn’t once suggest cheaper alcohol did I ?
    All I am saying,(to confirm the extensive data from Australia and experts such as the Law Commission) is that alcohol is alcohol.If you target one type then people will move to another-its pretty simple really.Politicians in many countries have hit out at RTDs ,mostly as ALAC has said ,because they perceive them as an ” evil ” product .Its a generational call.They don’t drink them so they must be bad! .Yes they are the first drink for many young people but its a massive logic jump to say that if you remove them young people will never have their first drink.For me it may have been bloody awful blackberry nip ,screwdriver or even a stout and lemonade.Others started with an Asti Spumante,cold duck and later others started with wine coolers.
    I am not saying we shouldn’t look at how to tackle our drinking problem but do it with logic not emotion.
    As to minimum pricing ,the Scottish parliament have voted to do a 2 year minimum trial and the poms are close as well.It will be really interesting to see how that goes.Our Ministry of Justice is half way through a paper on the subject as well and seem to be approaching it in a comprehensive manner.Increasing the price of alcohol will have an effect-price always does.It will probably lead to substitution into other products and possibly drugs but thats just a guess not a known outcome .Yes I am biased but have spent a bloody long time looking at the data,as did the Law Commission.Make sensible laws,don’t do what the Aussies ( and Jim Anderton here a decade ago ) and target a type of alcohol as the drinking public are not silly

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote