Wednesday, 26 February 2014

Alcohol Healthwatch Is Making Stuff Up, Again

Here's Alcohol Healthwatch in the New Zealand Herald.
Rising economic confidence and "aggressive" marketing techniques are the driving factors behind an 8.9 million litre rise in alcohol availability last year, says one concerned health organisation.
Latest figures from Statistics New Zealand, which compared figures over the last five years, show the total volume of alcohol available in New Zealand rose to 466 million litres last year - the equivalent of 2.1 standard drinks per person aged 18 and over per day.
It represents an increase of almost 9 million litres from 2012, according to Statistics New Zealand.
The total volume of alcohol available for consumption in New Zealand did increase last year. So too did population. We usually look at per capita trends rather than total volumes.

Go to Stats NZ's Infoshare service. I cannot link directly to the data series, because StatsNZ uses session codes that won't allow it. But the series you need is ALC005AA. Copy that into the search bar that I've linked to above. Then select all years all series. This is what you get when you port it into Google Docs to get graphs.

So, what can we see here? Per capita alcohol availability dropped substantially from 1986 to 1988, levelled off, dropped substantially from 1990 through 1996 (recall that the big liberalisation came '89), then bounced around a bit with a mild rise through 2010 followed by a mild fall. The average per capita figure for those aged 15+ was 9.4 litres over the whole period, was 9.2 litres over the period since 2000, and was 9.3 litres for the period 2003-2013. The 2013 figure was 9.2 litres. Eyeballing it, we've had a slight reversion after a substantial decline in consumption, followed by a levelling-off since 2005.

The Herald's citing Alcohol Healthwatch as saying that rising economic confidence and aggressive marketing are behind a rise in alcohol availability, using "total volume of liquid containing alcohol" as the measure. The volume of pure alcohol per capita is basically flat over the last decade, but with a mild decline from 2010 to present: the period coinciding with "rising economic confidence". And if alcohol marketing has gotten more aggressive over the last year, it's had no obvious effect on consumption. If we take Rebecca Williams at her word that the marketing's gotten more aggressive, then I guess we might start worrying less about aggressive marketing.

Let's continue. Here's more from The Herald:
However, there was concern that drinkers were moving to stronger types of alcohol as further analysis of the figures showed the percentage of beer, as a proportion of total volume available, fell from 81 per cent in 1996 to 62 per cent in 2013.
Wine rose from 16 per cent to 23 per cent, and spirits and spirit-based drinks such as RTDs rose from 3 per cent to 15 per cent in the same 17-year period.
Rebecca Williams, director of Alcohol Healthwatch, said the figures appeared to confirm fears around ready-to-drink (RTDs) beverages.
"One of the worries for us has been that the RTDs ... would be exposing those young drinkers to the spirit brands and the heavier spirits, and I think that is happening," she said.
"The spirits component has increased, wine is going up on a fairly steady basis, and the worry about the wine is that it too is actually quite a larger volume of pure alcohol [per drink], so we're seeing a shift to the heavier alcohol products."
Drinks such as wine were being marketed "aggressively" in outlets like supermarkets, as well as campaigns by drinks companies, which were competing heavily with each other, she said.
The figures could show a trend back up to peak levels in 2008.
"Seeing an increase this year, seeing the economy come back on line, all of those things to me will start to signal some concerns that we could be tracking back up again," she said, saying that "when people are feeling better [financially] they spend more on booze".
Williams is right on a couple of points. Beer has taken a declining share of total alcohol over the period since 1986, but with a very recent levelling-off. The StatsNZ series ALC016AA has the total litres of alcohol available per beverage category rather than per capita, but it's still useful for assessing relative market share across the categories. When we port it over to Google Docs, and with a bit of wrangling,* we get this:
Wine seems to have levelled off at a third of total alcohol since 2006 or so, spirits have risen markedly over the last decade, and beer's dropped. So Williams is right about that. But all of that needs to be read against the broad flatlined trend in per capita total consumption. She's painting the shift to potentially higher alcohol products as representing an increase in consumption of alcohol when per capita alcohol availability hasn't changed.

Further, is Williams suggesting that the beer companies don't market aggressively against each other? Didn't we hear a lot of outrage about aggressive beer promotion at the Rugby 7s? We can't just look at a change and blame aggressive marketing for those components that get a category increase when there's pretty similar marketing for the components that get a category decrease. My weekly supermarket flyers have more pages of wine ads than of beer ads, but there are plenty of ads for sales on slabs of beer too.

Because StatsNZ changed category definitions, we can only split out low and high alcohol spirits starting in 1995. Here's category shares from 1995 onwards:
When I look at this, I see pre-mixed, lower-alcohol spirits displacing beer rather than building demand for pure spirits. And, again, per capita consumption hasn't really grown much over the period.

Summing up, where Williams comes up with marketing- and economy-based explanations for increases in total alcohol availability and for category shifts, and worries that increased consumption of low-alcohol spirits is a gateway to harder spirits, we find instead:
  • No increase in per capita alcohol availability;
  • No plausible story explaining why marketing has been so effective for RTDs and wine and so useless for beer;
  • No plausible story explaining why improved economic conditions helped RTDs and wine but hurt beer;
  • No plausible story explaining why per capita trends in total alcohol availability show a mild decline from 2010 through 2013, the period of economic recovery, when they're using economic recovery to explain changes in total alcohol availability;
  • What looks like roughly constant market share for Beer + RTDs rather than RTDs being a gateway to proper whisky, though it's always possible that RTD drinkers will mature into spirits rather than shift to beer; either way, there's no increase in per capita availability. 
Let's then help the Herald out a bit by re-writing their first couple paragraphs for them.
The total volume of pure alcohol available per person in New Zealand remained constant this year. While there was an 8.9 million litre rise in the total quantity of alcoholic beverages available this past year, this increase is largely explained by a rising population combined with a shift away from spirits-based drinks, which have more alcohol per unit of total liquid, and towards medium-strength beer and wine, which have a lot more water with their alcohol. And, this category change mostly looks like noise given the longer-term trends.
While professional anti-alcohol advocacy groups, whose existence depends on shouting "Monster! Monster!" whenever a new alcohol stat comes out, blamed rising economic confidence and aggressive marketing for the increased total volume of alcoholic beverages, Statistics New Zealand noted that, "the volume of pure alcohol available per person aged 15 years and over (15+) was unchanged from 2012, at 9.2 litres per person." While anti-alcohol activists try to fuel the perception of crises by citing figures on the total amount of alcoholic beverage that's been available for consumption, it's best to look at statistics on per capita pure alcohol availability.
I wish that Monster-Shouting didn't sell papers.

Previously:
Update: Thomas Lumley reached a similar conclusion.

* The period prior to 1995 uses the discontinued series on total wine; from 1996 onward, I use the revised total wine series. It doesn't make much difference but lets me have a longer time series.

12 comments:

  1. Gareth Morgan received his doctorate in economics at the University of Victoria at Wellington a few decades ago.

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  2. Some of this stuff is nuts. I was warned at a large retailer when I purchased an R16 video game recently. The reason I was warned was because I had my son with me. It was the school holidays. I was questioned whether the game was for me or him. I told them it was none of their business and clearly I was buying it not him and that the last time I checked I was 49 years old. The salesperson then said that this time they would sell it to me but maybe not next time!! I said see you later and purchased it elsewhere, where I did not get the moral lecture.

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  3. I agree it's nuts, but that retailer could have been subject to thousands of dollars in fines if he'd been caught selling to a minor. Agree the clerk was a dick, and that all of this pushes us towards buying online. But if they'd hired a nice guy, and if you were some secret censorship agent checking compliance....

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  4. Now, should I blame Morgan or Wellington?

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  5. You're suggesting that it wouldn't make sense for a restaurant to oversupply food to its customers. But portion sizes have increased over time. Did previous generations leave restaurants still famished? If not, then what Herculean labours are making today's restaurant patrons so hungry that the larger sizes make sense.

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  6. Changing costs will change equilibrium portion size, no? Suppose that the fixed costs of delivering a meal to a customer at a restaurant haven't really changed much, but that the raw materials' costs have declined in relative terms. Wouldn't you then expect larger portion sizes? Demand curves slope down and have, by assumption, not changed; cost shock pushes marginal cost of portion sizes down. Optimal portion size increases.

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  7. True, I think his badge said trainee. But I think this is OTT. Buying alcohol or cigarettes I can understand, but video games!! I buy more and more online and out of the USA. I am probably breaking some censorship law with that too.

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  8. You're only breaking the censorship law if you supply an age-restricted game to a child under that age, or if you import a game that is here deemed Objectionable. I think.

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  9. Yes, I'd agree with that, but then I'm unsure what you mean in your post by "satiation", and why a restaurant would not want to serve a portion size larger than a customer's satiation point. Is satiation the point at which he no longer feels hungry? feels full? feels he has gotten value given what he paid for the meal?

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  10. There are two cutpoints. When food is relatively expensive, you reach the end of the food before you hit satiety. A restaurant that's able to increase portion sizing at that point in a way that delivers better overall value to the consumer, like after a cost shock, delivers bigger portions, but not ones that are on average beyond satiation. The evidence out of the soup experiment is that a standard bowl of soup is well below the satiation level of food.

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  11. Games are treated like movies and dvds- all must be classified by the censor-god before we mortals are allowed to see them. So importing an unclassified game would be an offence. Here's another one: reading an academic paper online that describes drug manufacture/cultivation techniques. Since you won't know before reading it whether the paper contains this 'objectionable' material, the censor told me you are supposed to submit a list of URLs of papers you want to read, and they'll decide what you can see. Seriously!

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  12. Well, you can import them without their being rated. But if they're ex post determined to be objectionable, you're the one in the poos.

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