ABSTRACT
During the past five years a series of published and unpublished reports have described the problems arising from the large increase in percapita alcohol consumption during the last 20 years. The economic components of this renewed research and policy interest in the effects of alcohol abuse are not inconsiderable and continue to grow. The elasticities may vary for large as opposed to small price and income changes because the slope of the demand curve at differing price levels is unlikely to be constant. The freedom of the British government to fix taxation levels for alcoholic drinks is circumscribed by the Treaty of Rome. The European Community is seeking to create a Common Market in alcoholic drinks by removing internal barriers to trade, and is seeking to harmonise tax levels so that products are treated equally by the tax systems of the ten member countries.
