How the alcohol industry is sponsored through "aid"

Published 2021-01-21

Every ten seconds, a person in the world dies due to alcohol. Low- and middle-income countries, especially in Africa, are particularly hard hit. At the same time, governments and various development actors are sponsoring the alcohol industry with billions.

Development aid, tax breaks, deductions for marketing and production support - this is how the alcohol industry is supported with billions in tax money around the world, sometimes even under the name development aid. In a new report published by Vital Strategies shows how financial support is given in various ways to an industry whose products are behind the deaths of three million people every year.

Governments use economic instruments to stimulate growth at all times. But when this growth leads to an increase in alcohol consumption - especially in low- and middle-income countries - a clear conflict of interest arises. To stimulate the growth of a product that negatively affects the health of so many people, that contributes to violence and accidents, and that hinders sustainable development in so many ways is actually completely sick.

Alcohol is one of the biggest risk factors behind non-communicable diseases (among others cancer, cardiovascular diseases and liver diseases). In the age group 15-49 years, alcohol is the main risk factor behind ill health and premature death in general. Also counts as so-called second-hand damage in (violence, accidents that affect others than the one who drinks, etc.), social costs, the impact on a country's productivity, hospital costs, etc., the picture becomes even worse. From the report:

"It is therefore absolutely incredible, given the huge number of deaths and illnesses, that high-level global development actors are encouraging countries to provide economic benefits to the perpetrator - the alcohol industry - under the guise of development aid."

Most of these grants goes under what in the report is called “development assistance” from governments in high-income countries to low- and middle-income countries. In the end, the profits go to large multinational alcohol companies - headquartered in high-income countries.

Incentives given to the alcohol industry are often justified as economic benefits, to promote economic development, create jobs or produce much-needed tax revenue. In reality, there is a direct conflict of interest between the economic goals… and public health goals to reduce the harm caused by NCD and alcohol. This report reveals how these incentives mainly promote alcohol for the benefit of industry, to the detriment of individuals and societies. "

The report contains the following recommendations:

  • Use fiscal policy to reduce supply on products that harm health and directly accessible economy to strengthen health care systems. Redistribute savings or potential new revenue to improve health budgets.
  • Eliminate incentives that can be harmful to health. Important lessons can be learned from tobacco control. For example, governments may require transparency in interactions between government personnel and alcohol companies and restrict alcohol companies from receiving development aid.
  • Follow the adaptation of the behavior of the alcohol industry and corporate action during and after crises. Alcohol companies around the world are exploiting the COVID-19 pandemic for commercial gain, including partnerships with governments, international organizations and healthcare companies. Such interactions should not be distracting from public health goals.
  • Avoid influence from the alcohol industry. Governments and development actors should avoid the conflicts of interest that arise in connection with the involvement of the alcohol industry. From finance to trade to health authorities, governments must be consistent in all areas of alcohol policy.
  • Monitor investments made in the alcohol industry through robust data collection and by tracking the total impact of each investment.
  • Calculate the health costs of incentives for the alcohol industry. Incentives that promote economic development and job creation must be weighed against health and social costs. Countries should consider whether investments are health-positive or health-negative.

To use tax money to strengthen the alcohol industry strikes back hard: Increased alcohol consumption means even greater injuries, more suffering, more deaths and a huge burden on healthcare systems. This is especially true of low- and middle-income countries, which clearly bear a disproportionate share of the burden.

Pierre Andersson

Police Adviser, IOGT-NTO movement