Alcohol Excise Taxation, Tax Share and Revenue in the European Union and the United Kingdom in 2022: An Overview and Modelling Analysis

ABSTRACT

Introduction

Although increases in alcohol excise taxation have been identified as one of the ‘best buys’ of the World Health Organization to reduce alcohol consumption and attributable harm, excise tax shares—the proportion of excise tax included in retail prices of alcoholic beverages—remain low in Europe. Revenue derived from alcohol excise taxation, and how it is affected by changes in alcohol excise taxation, has not yet been widely explored.

Methods

We conducted a search for revenues generated from alcohol excise taxation in all European Union (EU) countries and the United Kingdom between 2017 and 2022. We then calculated the average excise tax share for alcoholic beverages for 2022. Using regression analysis, we predict tax revenue per capita from the tax share, type of alcohol excise taxation, recorded and unrecorded consumption and prevalence of past‐year drinking. To illustrate the potential for revenue increases, we conducted a case study on Germany.

Results

In 2022, average revenue from alcohol excise taxation (119 euros per capita) and excise tax share (17.3%) were low in the EU countries and the United Kingdom, but showed sizable variation. The association between excise tax share and revenue from excise taxation was very high, with a Pearson correlation of 0.888 (0.720–0.958; df = 16; p < 0.0001). In regression analyses, only the excise tax share significantly predicted tax revenue.

Discussion and Conclusions

Marked revenue gains could be achieved in several countries having low tax shares by instituting increases in excise tax share, with only small effects on consumer prices.

1. Introduction

Alcohol consumption has been identified as a major risk factor for the burden of disease and injury [1], incurring high economic costs [2]. Increasing excise taxation on alcoholic beverages—identified as a ‘best practice’ in alcohol control policy [3] or as one of three ‘best buys’ by the World Health Organization (WHO) in its list of most cost‐effective policies [4, 5]—has been shown to be effective in reducing alcohol consumption and harm ([3, 6]). Moreover, increasing excise taxes can bring in additional state revenue, which, in turn, can offset some of the economic costs incurred by alcohol use or be used for other purposes by governments [7]. In fact, dedicated taxes on any market activity that generates negative externalities (i.e., external costs incurred by third parties, including society as a whole, that are not included in the market price) are part of the economic rationale to correct market failures [8].

However, this does not mean that increasing alcohol taxation is controversial. Some stakeholders, often linked to the economic operators of the alcohol and hospitality industries, argue that tax increases not only increase prices and reduce recorded consumption (this part of the argument is fairly uncontroversial), but can actually result in higher unrecorded consumption [9]. Unrecorded consumption here refers to all categories of alcohol not officially registered in the country where they are consumed, such as homebrew (legal or illegal dependent on the jurisdiction), alcohol registered in other jurisdictions, surrogate alcohol such as medicinal alcohol or illicit or smuggled alcohol [10, 11]. As a result, a lower level of recorded consumption is predicted, but similar or even higher levels of total consumption [12] and decreased tax revenue is expected as well [13]. Although there is ample evidence showing that these claims are based on mixed evidence and are often overstated, many governments shy away from increasing alcohol taxes [1], partly out of fear that such measures may be unpopular with voters. For instance, results of a pan‐European survey conducted in 2015 and 2016 showed relatively high objection by the public to alcohol control policies, in general, and taxation specifically [14]. However, such support may depend on how convincingly the arguments for the policies are presented to the public and how the policy debate is conducted in the society linked to the implementation, as well as how the policy is framed ([15]).

This contribution gives a snapshot of the situation of alcohol excise taxation and excise tax revenue in the European Union (EU) and the United Kingdom for 2022. This region can generally be characterised as having high alcohol consumption; 14 of the Top 20 countries with the highest levels of alcohol consumption in 2019 were part of this region and its average alcohol per capita level was nearly double the global average [1]. Despite this high consumption, the region applies comparatively low taxation: the overall excise tax share in the EU was 14% [16], meaning that only 14% of the final price to the consumer was due to alcohol excise taxation [17]. Taxation on wine is especially low, with an average excise tax share of only 4% in the EU and 14 countries applying a zero rate. The low tax share was identified as one of the major impediments to reaching the agreed‐upon objectives in terms of burden from noncommunicable disease mortality [18] and led to a signature initiative of the WHO European Region to increase the tax share [19].

The Council Directive 92/83/EEC of 19 October 1992 [20] has established the framework for harmonising the structures of excise duties on alcohol and alcoholic beverages within the EU, defining categories, tax bases and minimum rates for different types of alcoholic products to ensure uniformity and reduce trade distortions between Member States. Alcohol excise duties must be based on either the volume of the product or the volume of ethyl alcohol it contains. Cider, wine and intermediate products are taxed by volume, while distilled spirits and beer are taxed by alcohol content. Beer is taxed in one of two ways: it is either based directly on its alcohol content or indirectly by its Plato grade, a number assigned to beer related to the amount of its sugar content that is converted to alcohol during the fermentation process.

Not much seems to be known regarding revenue generated from alcohol excise taxes in the EU, despite the above‐mentioned claims made by economic operators [13]. We conducted a systematic search for reviews and individual articles on revenue, alcohol, excise taxation and Europe, and independently for each EU country to find any information in the peer‐reviewed literature, but only a few relevant results were identified (Supporting Information S1 and S2 in Data S1). Manthey et al. [7] examined tax revenue between 2010 and 2020 for five countries and found marked differences in per capita revenue from alcohol excise taxation. Inflation‐adjusted per capita alcohol excise tax revenues declined in Germany (−23%), Poland (−19%) and Estonia (−4%), but increased in Latvia (+57%) and Lithuania (+49%). In periods of no taxation changes, alcohol consumption and tax revenue showed similar trends, but increases in the level of alcohol excise taxation were accompanied by increased revenue and stagnant or decreased consumption. Kukalová et al. [21] established that revenues obtained from alcohol excise taxation in the Czech Republic did not cover the healthcare costs caused by the use of alcohol. Finally, the paper by Österberg [22] draws a general picture of excise taxation for alcoholic beverages in the EU up to 2010, finding overall low and divergent alcohol excise duty rates in its Member States, with an overall decreasing tendency in most EU countries over the decades before 2010. He predicted that increasing alcohol excise duty rates would in most countries lead to lower consumption, improved health and higher revenues.

To increase knowledge on excise taxation, tax share and state revenue, we collected data on revenue from alcohol excise taxation between 2017 and 2022 for the EU, including the United Kingdom (which ceased its EU membership in 2020) to answer the following questions:

1. What is the average per capita revenue of alcohol excise taxation in Europe in 2022 and in the individual countries?

2. Did this revenue change over the past 6 years; especially during the COVID‐19 period?

3. What is the relationship between excise tax share, type of alcohol excise taxation and revenue?

4. What is the potential for countries to increase revenue from alcohol taxation in this region, and what would the possible public health implications be?

2. Methods

2.1. Assessment and Standardisation of Revenues Derived From Alcohol Excise Taxation

Revenues for alcohol excise taxation were systematically searched for on the publicly accessible websites of governmental agencies and institutes for the calendar years 2017–2022, inclusively. We looked for all revenues derived from alcohol excise taxation, either as a summary statistic (as was true for most countries) or by beverage type (beer, wine and spirits). A list of the sources identified can be found in Supporting Information S3 in Data S1. To make them comparable, we divided them by the population 15 years and older in the respective year, using data from the World Population Prospects [23]. Taking inflation into account, all values were standardised to 2022 euros (see Table S1), as the majority of the countries used this currency [24]. Additionally, adjustments were made for purchasing power parity, using the purchasing power parity conversion factor from the World Bank (Table S2) [25].

2.2. Assessment and Calculation of Alcohol Excise Tax Share

Data on tax shares were collected between July 2022 and June 2023 by the WHO Regional Office for Europe for the biannual Global Report on the Use of Alcohol Taxes [17]. The data are also available on the WHO's Global Health Observatory portal [26]. Prices and taxes of the best‐selling brands of 330 mL beer and 750 mL spirits were collected. In addition, for countries in the WHO European Region, information on the best‐selling brand of 750 mL wine was collected. The data were reported and validated by officials in the Ministry of Health and Ministry of Finance of WHO Member States.

Excise taxes included both specific taxes (based on alcohol content or beverage volume) and ad valorem taxes (based on product value). For specific excise taxes, the tax amount was calculated by multiplying the alcohol content or volume by the corresponding rate. Ad valorem excise taxes were calculated using the applicable base, which varies by country (e.g., producer price, retail price excluding taxes or import value including cost, insurance and freight). Excise taxes were converted into a percentage of the all‐tax‐inclusive retail price to allow for unbiased comparisons between countries, using retail prices and applicable excise tax rates and structures. Other taxes such as value‐added taxes and import duties were recorded, but were only used in the denominator (= total retail price) of the excise tax share. All calculations were performed separately for beer, wine and spirits.

The excise tax share for each country was calculated as a weighted mean of the excise tax shares for beer, wine and spirits, using the relative proportion of each beverage in recorded alcohol consumption (expressed in litres of pure alcohol) as weights. Alcohol consumption data were obtained from harmonised, country‐specific alcohol exposure estimates provided by the WHO Global Monitoring System on Alcohol and Health [27] for the most recently published year (2020). For Czechia and Latvia, due to the absence of excise tax share data for wine, the overall country mean was calculated using only the relative recorded consumption of beer and spirits. In addition, a regional average excise tax share was calculated as a population‐weighted mean of the country‐level averages, using each country's total population in 2022 as weights, including all countries with available data. We included all countries for which there was revenue, except Luxembourg and Malta due to missing data in the Global Report on the Use of Alcohol Taxes [17].

2.3. Statistical Procedures

Descriptive statistical procedures were mainly used. The association between alcohol excise tax share and per capita alcohol excise tax revenue was estimated through linear regression, using the latter as the outcome measure. We tested for linear, quadratic and exponential effects of the excise tax share, but only the linear effect was significant. Other variables, such as excise tax structure by type of beverage and alcohol per capita consumption of adult (15+) population (APC), recorded consumption, unrecorded consumption and prevalence of past‐year drinking in the country, were tested for inclusion in the model one by one, but no significant results were obtained. All alcohol consumption indicators such as APC, recorded consumption, unrecorded consumption and the prevalence of past‐year drinking were obtained from the Global Information System on Alcohol and Health for the latest year available before 2022 [27]. For the final model, since a tax share of 0 means that no excise taxation is applied, the regression line was estimated to pass through the origin.

Statistical significance was set at α = 0.05 and all analyses were conducted using R (version 4.3.2).

2.4. Methodology for the German Case Study

Germany, as the largest country in the EU with a relatively low tax share [19] and high affordability of alcoholic beverages [28], was selected for a case study to assess the potential effects of increased alcohol excise taxes on retail prices, per capita alcohol excise tax revenue and alcohol consumption. We explored three scenarios: (i) an increase by 10 percentage points of the tax share for all beverages; (ii) increases of the retail price of all alcoholic beverages by 5% (2A) or 15% (2B).

The methodology is detailed in the Supporting Information S6 in Data S1. In sum, adjustments in excise taxes were calculated to achieve these scenarios. In the baseline scenario, which corresponds to the 2022 data [17], beer was taxed based on alcohol content (0.787 EUR/hectolitre per degree of Plato), with the excise tax share corresponding to 5.6% of its retail price. Spirits were also taxed based on alcohol content (1303 EUR/hectolitre of pure alcohol), accounting for 40.3% of their retail price. Wine incurred no excise tax; however, a volume‐based tax structure was assumed for alternative scenarios with tax applied per litre of wine. For simplicity, we disregarded taxes on sparkling wine and ‘other alcoholic beverages’ [1].

The impact of changes in excise taxation on the level of alcohol consumption, measured as per capita alcohol consumption in litres (L) of pure alcohol among those 15 years and older, was estimated as described by Tran et al. [29], using 2020 data as it was the most recent data available [1]. The consequent impact on mortality was calculated using the approach employed by Shield et al. [30], with updated relative risk functions based on recent literature for liver cirrhosis, diabetes, hypertensive heart disease and atrial fibrillation [31, 32, 33, 34]. Given that the methodology assumes a 10‐year lag between alcohol exposure and cancer outcomes, cancer‐related outcomes were excluded from this analysis, and we focused instead on the immediate effects of reduced alcohol consumption on mortality.

3. Results

3.1. Alcohol Revenue

Overall, we obtained revenue data from 20 of 28 countries (27 current EU Member States and the United Kingdom). Public websites detailing data on tax revenue for alcoholic beverages could not be identified for the remaining countries: Bulgaria, Croatia, Czechia, France, Greece, Hungary, Netherlands and Slovakia.

Table 1 gives the current levels of revenue from excise taxation and the changes since 2017, which served as a reference year to illustrate the changes within the first and last years of our analysis. Overall, there are tremendous differences between the alcohol excise taxation revenue generated between countries, despite the fact that the EU is relatively homogenous in wealth (all EU countries are high‐income) and level of alcohol consumption [1] and the countries share a common EU alcohol tax directive. The differences between the lowest and highest per capita revenues in 2022 were more than tenfold (Romania: 20 euros, or Italy: 29 euro; vs. Finland: 314 euros, or Ireland: 304 euros).

TABLE 1.

Per capita revenue from excise taxation of alcoholic beverages in 2022, and trends since 2017.

Country	2022 per capita revenue (euros)	2022 per capita revenue at PPP ($ Int)	Change between 2017 and the COVID‐19 period (2020/2021) a (euros)	Change between 2017 and 2022 b (euros)
Austria	50	71	−6	−6
Belgium	54	76	−6	−10
Cyprus	37	65	−11	−5
Denmark	106	126	−6	−16
Estonia	218	386	−35	−55
Finland	314	403	30	−11
Germany	44	63	−3	−6
Ireland	304	414	−38	−61
Italy	29	47	−1	0
Latvia	167	348	29	12
Lithuania	188	399	37	18
Luxembourg	131	159	14	12
Malta	50	87	−17	−5
Poland	90	230	−2	−17
Portugal	31	59	−3	3
Romania c	20	56	−2	−2
Slovenia	69	131	−2	−3
Spain	30	53	−7	−3
Sweden	179	226	−4	−29
United Kingdom	264	353	−0	−19
Average	119	188	−2	−10

Note: Green‐highlighted countries belong to the cluster having higher revenues; orange‐highlighted countries to the cluster with lower revenues (see text for further explanation).

Abbreviation: PPP, purchasing power parity.

^a Average per capita revenue of alcohol excise taxation in the calendar years 2020 and 2021 minus per capita revenue of alcohol excise taxation 2017, corrected for inflation.

^b Per capita revenue of alcohol excise taxation in the calendar year 2022 minus per capita revenue of alcohol excise taxation for the year 2017, corrected for inflation.

^c Per capita revenues of alcohol excise taxation for 2017 and 2018 were not available for Romania; the 2019 estimates were carried backward, respectively, and corrected for inflation.

In addition, as also visible in Figure 2, there appear to be two readily identifiable clusters of countries: one cluster with 10 countries and a per capita revenue below 70 euros (Austria, Belgium, Cyprus, Germany, Italy, Malta, Portugal, Romania, Slovenia, Spain; orange‐highlighted) and another cluster of seven countries with a per capita revenue of above 150 euros (Estonia, Finland, Ireland, Latvia, Lithuania, Sweden, United Kingdom; green‐highlighted) and only four countries with per capita revenues falling in between. Adjusting for PPP yielded an even higher variability between countries (Table 1).

FIGURE 2.

Association between per capita revenue from alcohol excise taxation and overall tax share. AUT, Austria; BEL, Belgium; CYP, Cyprus; DEU, Germany; DNK, Denmark; ESP, Spain; EST, Estonia; FIN, Finland; GBR, United Kingdom; IRL, Ireland; ITA, Italy; LVA, Latvia; LTU, Lithuania; POL, Poland; PRT, Portugal; ROU, Romania; SVN, Slovenia; SWE, Sweden.

With regard to purchasing power, countries with relatively lower GDP tend to get relative increases in purchasing‐power‐adjusted revenues. Overall, revenues decreased from 2017. It is worth noting that there were only four exceptions from the general trend of countries indicating revenue growth between 2017 and 2022 (Latvia, Lithuania, Luxembourg and Portugal—the last one in smaller magnitude; Table 1).

3.2. On the Association Between Tax Share and Tax Revenue

Figure 1a is a map depicting the level of excise tax share for the countries that reported these data for 2022. Overall, the tax share in the 25 EU countries and United Kingdom in 2022 was low, with a regional population‐weighted average of 17.3% of the retail price of all alcoholic beverages attributable to alcohol excise taxes. The excise tax share varied markedly across countries, with a clear gradient from south to north, where northern countries had higher tax shares. Figure 1b shows a similar map for the per capita tax revenues, and without any statistical test, the patterns of variation between both indicators look similar.

FIGURE 1.

Alcohol excise tax share (a) and per capita alcohol tax revenue (b) in the European Union and the United Kingdom in 2022.

The association between overall excise tax share and revenue from excise taxation is very high, with a Pearson correlation of 0.888 (0.720–0.958; df = 16; p < 0.0001). In regression analyses, an increase in tax share of 10 percentage points was significantly associated with an increase in the per capita revenue of about 59 euros (β = 586.9; 95% confidence interval [CI] 495.6, 678.1; df: 17, p < 0.0001) (Figure 2). No other characteristic of taxation (such as taxation method) or alcohol indicator (APC, recorded consumption, unrecorded consumption, prevalence of drinking) reached significance (see Supporting Information S5 in Data S1).

3.3. What Would the Impact Be of Increasing Alcohol Excise Taxes in Germany? A Case Study

The most recent data for 2020 shows that on average, an adult (15+) in Germany drinks 11.8 L (95% CI 11.1–12.6 L) of pure alcohol per year, in a country with over 71 million inhabitants aged 15 years and older. In 2022, retail prices for 330 mL of beer, 750 mL of wine and 750 mL of spirits were 0.56, 2.29 and 9.10 euros, respectively. The excise tax shares for these beverages are 5.6% for beer, 0% for wine and 40.3% for spirits.

3.3.1. Scenario 1: Increase Alcohol Excise Tax Share on All Beverages by 10%

In this scenario, increases in excise tax of 10 percentage points (beer from 5.6% to 15.6%, wine from 0% to 10%, spirits from 40.3% to 50.3%) are achieved by increasing excise taxation of beer to 2.53 euros per hectolitre per degree Plato (+221%), of spirits to 2108 euros per hectolitre of pure alcohol (+62%) or by introducing a new excise tax of 0.35 euros per litre of wine. As a result, the retail price of a bottle of beer rises to 0.64 euros, reflecting a 14.6% increase, the retail price of a bottle of wine rises to 2.60 euros, reflecting a 13.5% increase and the retail price of a bottle of spirits increases to 11.79 euros, representing a 29.6% increase. Prices would still be below the EU average. This scenario would yield an additional gain in excise tax revenue amounting to approximately 4.2 billion euros annually. These price increases would result in a reduction in APC to 10.8 L (95% CI 10.7–11.0 L), indicating a reduction of 8.5% (95% CI −9.9% to −7.3%), postponing the deaths of 3426 (95% CI 2961–3946) people in 1 year or about 1.1% of all deaths in the country. In addition to the expected revenue gains, annual direct and indirect attributable‐alcohol costs, estimated at €16.59 and €40.44 billion, respectively [35], would also be reduced.

3.3.2. Scenario 2A: Increase Retail Price of All Beverages by 5%

In Scenario 2A, increases in excise taxation would lead to increases in the retail prices if all alcoholic beverages were increased by 5% (i.e., increasing the price for a bottle of beer to 0.59 euros, a bottle of wine to 2.40 euros, or a bottle of spirits to 9.55 euros). This is based on increasing excise taxation of beer to 1.38 euros per hectolitre per degree Plato (+76%), of spirits to 1439 euros per hectolitre of pure alcohol (+10%) and introducing a new excise tax of 0.13 euros per litre of wine. The excise tax share for wine increases from 0% to 4%; for beer it increases from 5.6% to 9.3%; and for spirits, it increases from 40.3% to 42.4%. This scenario would generate an additional gain in excise tax revenue of 20.90 euros per capita approximately, translating to 1.5 billion euros annually. The APC in this scenario decreases to 11.6 L (95% CI 11.5–11.6 L), representing a reduction of 2.1% (95% CI −2.5% to −1.8%). Such a reduction would represent the postponing of 861 (95% CI 744–990) deaths due to alcohol consumption in 1 year, which represents 0.3% of all deaths in the country, while also gaining the benefits of lowered alcohol‐attributable healthcare and savings garnered from reduced productivity losses and legal costs.

3.3.3. Scenario 2B: Increase Retail Price of All Beverages by 15%

In Scenario 2B, the retail prices of all alcoholic beverages are increased by 15% via increases of excise taxation, based on increasing excise taxation of beer to 2.57 euros per hectolitre per degree Plato (+227%), of spirits to 1711 euros per hectolitre of pure alcohol (+31%) and introducing a new excise tax of 0.38 euros per litre of wine. Consequently, the retail price of a bottle of beer rises to 0.65 euros, the retail price of a bottle of wine rises to 2.63 euros, and the retail price of a bottle of spirits increases to 10.46 euros. The excise tax share for wine increases to 11.0%, for beer it increases to 15.8%, and for spirits, it increases to 46.0%. This scenario would generate an additional gain in excise tax revenue of approximately 4.1 billion euros annually, 57.33 euros per capita. The APC in this scenario decreases to 11.1 L (95% CI 11.0–11.2 L), representing a reduction of 6.4% (95% CI −7.4% to −5.5%), postponing the deaths of 2578 (95% CI 2221–2970) people in 1 year, about 0.8% of all deaths in the country, and gaining the benefits of lowered alcohol‐attributable healthcare and savings from decreases in productivity and legal costs.

4. Discussion

Based on data from 2022, the overall revenue from alcohol excise taxation was low in the EU and United Kingdom, but with relatively high variability. Based on regression analysis, the only significant determinant for revenue was tax share: the lower the tax share, the lower the revenue. However, it should be noted that the regression analysis was based on cross‐sectional data of 20 countries. The overall association between tax share and revenue was high, with a Pearson correlation coefficient of 0.888 (0.720–0.958; df = 16; p < 0.0001).

The high correlation between tax share and revenue corroborates previous findings from five countries which showed that increases in excise taxation (and thus tax share) were linked to increases in tax revenues [7]. Together, these findings contradict the arguments of economic operators of the alcohol and hospitality industry, who contend that excise taxation on alcoholic beverages should be set at a low rate in order to maintain higher revenues. A case study conducted on Germany alone showed that relatively minor increases in excise tax shares (+10 percentage points) or retail prices (+5%; +15%) through increased excise tax would be associated with revenue increases of 1.4 (5% price increase), 4.0 (15% price increase) and 4.2 billion euros (10% tax share increase) annually. Thus, billions of euros could be gained by even moderate increases in the current excise tax share; however, even with these increases in taxation, tax revenues would not cover the costs of the high externalities of alcohol consumption (see below for Germany; for other case studies, see [21, 36]; for level of externalities, see [2]).

Before we discuss the implications further, we would like to highlight potential limitations of our work. We were not able to find revenues for eight of the 28 countries, nor to establish the tax share for three of the countries. The missing values in these countries might have changed the data, but not the conclusions, since we see no systematic way that the reporting of revenue on governmental or other websites, or missing responses on tax share by WHO counterparts, could possibly affect the association between these two indicators. Moreover, the tax shares of the countries with missing revenue data ranged from 8.0% in Croatia to 20.3% in Hungary—values that fall within the overall range observed across countries and close to the mean for all EU countries. Second, the procedure to select the retail prices in the countries based on the most sold brand may have introduced bias. However, this methodology has been established in the tobacco field for some years as part of monitoring progress in the implementation of the WHO Framework Convention on Tobacco Control [37], and has been the basis for many recommendations to various governments to administer tobacco taxes and attain recommendations for tax shares in the field [38]. With respect to applying this methodology to alcohol, the WHO European Region is currently planning to undertake a validity study. Third, the main conclusions are based on a cross‐sectional snapshot of 2022, and this does not allow us to draw firm conclusions about causality [39]. More direct evaluations on the impact of taxation increases on revenue [7, 40] corroborate our findings, however. Fourth, tax structures in the EU were similar for the study period, so we could only examine the impact of different taxation structures on tax share and revenue in a limited way. There was a more recent change in the tax structure in the United Kingdom in 2023 (after leaving the EU) towards a more strength‐based taxation system. In general, taxation systems based on alcoholic strength are predicted to have a positive impact on health [41]. The potential impact of this move is predicted to be positive for mortality and hospitalisations [42], but is unclear in terms of government revenue from taxation. Fifth, our modelling for Germany did not consider cross‐elasticities. For the scenario regarding tax‐share increases, this may have led to bias. Cross‐elasticities are potentially important to consider, and, as with beverage preference, they seem to vary by country and culture. Knowledge about cross‐price elasticities will be important for any government planning changes in alcohol excise taxation. Relatedly, the potential of industry to selectively pass through taxation increases on different products based on price may be important. Often, taxation increases are overshifted, meaning the retail price of a product increases by more than the amount of the tax increase. This practice has been especially noted to affect higher priced beverages. For cheaper beverages, tax increases may first be undershifted, and the increase may only be fully affecting the retail price after a time lag [43]. Finally, the most recent years encompass not only a portion of the period of the COVID‐19 pandemic (2020–2021), but also the beginning of another period of geopolitical (and economic) instability due to the Russian invasion into Ukraine. This event led to substantial changes in population statistics in smaller neighbouring countries, as well as to economic consequences, and this may have impacted inflation.

However, these limitations did not seem to affect the general conclusion of our analysis. Tax revenue is low in the EU and does not seem to have substantially increased since 2017; the revenue depends mainly on the level of excise tax share being applied. Neither the type of taxation nor the APC or other alcohol indicators had a significant impact over and above the excise tax share. The lack of impact from APC is likely due to the overall high level of alcohol consumption in the EU, with relatively minor variation between countries. Of note, as well, is the lack of association with unrecorded consumption in the regression analysis. Despite inconclusive evidence [9], the alcohol industry has consistently argued that higher taxation, and thus tax share, will be associated with high levels of unrecorded consumption ([44]).

An increase in excise tax share seems to be necessary for many of the countries, particularly, those that have an overall excise tax share below 20%. The result would be a win‐win‐win situation: first, the governments would reap substantial benefits for the country in the form of revenue. Second, such an increase in excise tax share would lead to significant reductions in mortality and other indicators of burden of disease [19]. And third, it would result in additional financial benefits by reducing the indirect and direct costs of alcohol consumption, especially by reducing losses in productivity, alcohol‐attributable morbidity and resulting hospitalisations [45]. Overall, increasing alcohol excise taxes would be expected to narrow the so‐called alcohol deficit [36].

When considering which excise taxation rates to increase first in the region, wine is the obvious choice. In the EU, the minimal value of excise tax for wine is currently 0 [46]. Consequently, 14 of the 27 present‐day EU countries do not put an excise tax on wine, and six of these are among the nine countries in the cluster of alcohol excise tax revenue rates at or below 70€ per capita. From a public health perspective, there is no justification for this as ethanol from wine causes the same health consequences as any other alcoholic beverage [47]. Moreover, there are additional special rules for taxing wine, such as high exemptions for personal use among producers [48] or subsidies provided to Member States to remove wine from their markets [49]. The taxation of wine could easily be achieved if the EU simply increased the minimal excise taxation above zero.

However, there is also room to increase the excise taxation and consequently the tax shares of beer and spirits. The total tax share on alcohol is considerably lower than it is on tobacco, for which the EU almost reaches the WHO's goal of a 75% tax share [19]. Considering that alcohol has an average excise tax share of 14% in the EU, this leaves us with a large amount of room for improvement. Even increases of 10 percentage points will not cover the externalities alcohol causes: take again the example of Germany, where, for 2022, we would expect externalities (based on the review of Manthey et al. [2]) that would be over 10 times higher than the expected tax revenue generated following an increase of 10 percentage points in tax share.

5. Conclusion

Overall, in the EU, taxation levels and thus tax shares are low, with many countries having overall excise tax shares of lower than 10%. Levels of excise taxation can be changed by the governments of the respective countries, but the EU also has the ability to change these levels. As indicated above, from a public health perspective, the current minimal excise taxation rate of 0 for wine, a carcinogenic substance, is hard to justify. This is true especially in light of Europe's Beating Cancer Plan, a campaign aimed at tackling the entire disease pathway, which explicitly emphasises prevention as one of its four key action areas. Increases in the minimal levels of taxation currently in place would not only improve public health but would also increase the revenue required to set off some of the enormous economic costs caused by alcohol use in this region.

Author Contributions

J.R. conceptualised the study, obtained funding and wrote the first draft of the manuscript. He and D.C. also took the lead on the revision. A.S.H. and K.D.S. collected data and helped with the analyses. D.C. and P.R. led the analysis and conducted the case study. D.C. undertook all the analyses for the revision. All authors wrote parts of the manuscript, read and approved the final manuscript.

Disclosure

The authors alone are responsible for the views expressed in this publication, and the content does not reflect official positions of the National Institute on Alcohol Abuse and Alcoholism or the National Institutes of Health. Carina Ferreira‐Borges and Maria Neufeld are staff members of the World Health Organization; Daniela Correia is a WHO consultant, but the views expressed herein do not necessarily represent the decisions or the stated policy of the World Health Organization.

Ethics Statement

The study was conducted according to the guidelines of the Declaration of Helsinki. The study protocols were approved by the Research Ethics Board of the Centre for Addiction and Mental Health, Toronto, Canada on 17 April 2020, and renewed every year (REB decision letter no. 050/2020). There were no individual participants in the study; thus, consent to participate is not applicable.

Consent

The authors have nothing to report.

Conflicts of Interest

The authors declare no conflicts of interest.

Supporting information

Data S1: Supporting Information.

Rehm J., Correia D., Hassan A. S., et al., “Alcohol Excise Taxation, Tax Share and Revenue in the European Union and the United Kingdom in 2022: An Overview and Modelling Analysis,” Drug and Alcohol Review 44, no. 7 (2025): 2003–2012, 10.1111/dar.70028.

Data Availability Statement

The data that supports the findings of this study are available in the Supporting Information of this article.