Too cheap to ignore – WHO helps countries reduce alcohol harm through taxation and pricing policies

21.05.2025 - In many European countries, alcohol is more affordable today than it was 2 decades ago and people are paying the price with their health. The WHO European Region continues to report the highest alcohol consumption per capita in the world, with devastating consequences for public health. From cancers and liver disease to road traffic injuries and early deaths, alcohol contributes significantly to the Region’s disease burden. However, governments have a powerful tool at their disposal: taxation.

To support countries in designing more effective alcohol pricing policies, WHO/Europe has released 2 new resources. The first is a comprehensive report on alcohol taxation in the WHO European Region, offering a deep dive into how countries are, or are not, using taxes to reduce harm. The second is a practical toolkit for ministries of health and other policy-makers, designed to demystify alcohol tax policy and provide clear, actionable guidance for implementation.

The problem: rising affordability and slow policy reaction

The new WHO/Europe report outlines major gaps in current alcohol tax policy. As of 2022, only 29 of the 53 Member States levied any form of excise tax on wine, leaving a significant portion of alcohol consumption untaxed. This is largely due to the European Union (EU) alcohol excise duty directive, last updated in 1992, which still permits a minimum tax of zero on wine. While most countries in the Region impose alcohol content-based excise taxes on beer and spirits (63% and 90%, respectively), only 2 countries do so for wine. Overall, excise taxes contribute an average of 37% to the price of spirits, 16% to beer and just 14% to wine – figures that drop even further in the EU, where wine taxes average a mere 4%.

Low tax policies make alcohol significantly more affordable over time, especially in higher-income countries. The report shows that people in EU countries can now buy 46% more beer, 76% more wine and 37% more spirits with their income than the regional average. Wine remains the cheapest form of alcohol, costing just Int$ 1.13 per 10 grams of pure alcohol – and even less in the EU, at Int$ 0.77.

Why tax alcohol? A financial literacy moment

The WHO toolkit helps to demystify the economic logic behind alcohol taxation.

·         Affordability is a key metric – if alcohol becomes easier to afford because of higher incomes, consumption of alcohol is likely to increase and harms will follow.

·         General taxes, such as value-added tax, are typically applied uniformly across a wide range of goods and services. Although these taxes can increase the overall cost of alcohol, they do not significantly discourage alcohol consumption as they do not affect alcohol prices relative to other goods and services. Their primary purpose is not to influence consumer behaviour, but rather to fund public services.

·         Excise taxes are imposed on the production, distribution or sales of specific products, such as tobacco or alcoholic beverages, that are harmful to individuals and the wider society, and can be set to compensate for these consequences. These can be specific (based on ethanol content or total volume of the beverage) or ad valorem (based on the price of the beverage), and both can be adjusted over time. Excise taxes based on alcohol content are considered the most cost–effective government tool for public health outcomes.

·         In addition to taxation, minimum pricing can ensure that the cheapest and strongest alcohol is not sold at rock-bottom prices.

Low prices mean higher consumption, particularly among young people and heavy drinkers, yet many governments hesitate to act, concerned about the lack of public support or potential increases in unrecorded alcohol. However, the WHO/Europe report finds no direct link between higher taxes and unrecorded alcohol consumption. With proper safeguards, such as improved monitoring and modern tracking systems, countries can prevent illegal markets while reaping the benefits of higher taxes.

Importantly, alcohol taxation is not just about health – it’s about revenue and reinvestment. Because alcohol demand is relatively inelastic, raising taxes typically increases government revenues, even as consumption declines. These funds can be earmarked for health programmes or social services, maximizing the return on investment. The new WHO toolkit offers simple guidance on how to do this, using examples from countries that have successfully introduced or scaled up alcohol taxes.

Countries that lead – and lessons they offer

Case studies in the report show what is possible. In Georgia, Germany and Portugal, 2 simulated taxation scenarios – one with a 10% increase in retail prices and another with a 10 percentage-point rise in tax share – led to national consumption declines of 4.0–8.5% and mortality reductions of up to 2.5%. These gains do not even account for long-term reductions in alcohol-attributable cancers and other chronic conditions.

The Nordic countries (Finland, Iceland, Norway, Sweden and the Faroe Islands) also provide strong real-life examples, with their state-run alcohol monopolies that regulate both prices and access. These systems have helped to maintain higher prices and lower the harm. Another great example is Lithuania, where following a major increase in alcohol excise taxes in 2017, recorded per capita alcohol consumption decreased by 7% compared to the previous year, while revenue from alcohol excise taxation increased by 27%.

Time to act

Alcohol taxation is one of WHO’s best buys for noncommunicable disease (NCD) prevention, but it is also one of the most underused. Even modest tax increases can reduce consumption and save lives, while boosting public budgets. However, despite the evidence and international commitments, including the WHO Global Alcohol Action Plan 2022–2030 and Europe’s Beating Cancer Plan, policy change has been slow. The EU’s outdated directive remains unreformed.

“We know what works. Alcohol taxation is on WHO/Europe’s list of quick buys – high-impact policies that are inexpensive to implement and deliver results within 5 years. Alcohol taxation is a single policy lever that reduces harm, increases revenue and promotes health equity,” said Dr Carina Ferreira-Borges, Regional Adviser for Alcohol, Illicit Drugs and Prison Health at WHO/Europe. “With these new tools, countries can act decisively and protect future generations from harm.”

As Europe struggles with rising health-care costs and increasing burden of NCDs, alcohol taxation offers a rare opportunity: a policy that pays for itself while saving lives. In the lead-up to the 4th High-level Meeting of the United Nations General Assembly on the prevention and control of NCDs in 2025, WHO/Europe and its Member States need to make every week count to achieve the internationally agreed NCD-related SDG targets, saving lives. The tools are available – what’s needed is the political will to use them.

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Alcohol taxes, prices, and affordability in the WHO European Region in 2022: https://iris.who.int/handle/10665/381233

Alcohol taxation and pricing policies implementation toolkit: https://iris.who.int/handle/10665/381218