Bottoms Up / Pay More, Drink Less

What's better, vodka or whiskey? No, we aren't tackling culinary matters, or reviewing hard drinks. Not even image - whiskey is exclusive, vodka is for the young - concerns us. What concerns us is an issue which is a far stickier point from a national standpoint.

Do you have a strong opinion on the harm caused by vodka versus that of whiskey? Probably not. The state doesn't have a real opinion on the matter, either. Both contain similar percentages of alcohol. Both will get you drunk. Both can impair health due to alcohol addiction, violent behavior and road accidents. Both are equally unwanted and the state is indifferent to the consumption of one versus the other.

But vodka costs as little as NIS 20 per bottle, while you can't find whiskey for less than NIS 100. A good one may even set you back thousands of shekels. Yet, do you care whether that driver who ran you over, was drunk on Chivas Regal that cost NIS 300 a bottle, or unbranded vodka at NIS 20 a pop?

You probably do not care. Neither does the state.

What should concern the state is total consumption of alcohol, not how that consumption breaks down. That should be the basis for the alcohol tax reform: how it will change consumption as a whole, not whether it will slant consumption from one type of alcohol to another.

The proposed reform would have a contradictory effect on alcohol prices in Israel. It would make whiskey and other expensive beverages much cheaper, and to a lesser extent make cheap drinks like vodka costlier. Therefore, some fear drinkers would switch from vodka to whiskey and warn that the number of drunks in the country would increase.

If people do switch from vodka to whiskey, so be it. Who cares? Will people really drink more because Chivas is now only NIS 250? This question - the basis of the arguments - is irrelevant. The Chivas will become cheaper, but cheap vodka will cost a minimum of NIS 24 starting in 2014. Since 74% of alcohol consumed in Israel is cheap stuff like vodka, and since young people mainly drink cheap alcohol, the reform will make prices higher for Israel's most critical market share. And that's the goal - to reduce alcohol consumption as a whole.

The reform achieves one other important goal: it fixes a market failure that gave the duty-free shop at Ben-Gurion International Airport control of the upscale alcohol market. The well-heeled got a gift from the state in the form of discount drinks. The state never intended to give the rich a present, let alone in the form of discount quality alcohol. That is a distortion that needs fixing.