Unveiling the Truth: Oregon’s Government Conceals Findings on Alcohol Abuse and Wine Taxes

The Oregon Health Authority has concluded a research in 2021 indicating that heavy drinkers have barely reduced their consumption or have opted for less expensive beverages.

The potential impact of enhanced excise taxes on wine and beer as a measure to limit extreme alcohol intake is currently a hot topic in the Oregon state legislature. However, a 2021 research from an Oregon health agency indicating that increased taxes have a minor role in persuading heavy drinkers to lower their alcohol intake might have been intentionally kept under the wraps.

Local newspapers, when initially reporting about this last week, noted that the Oregon Health Authority (OHA) denies any deliberate intent. Yet, leaders in the local wine industry have expressed their doubts as the research was not presented to the state legislature or a newly formed task force designated to explore this issue.

Jana McKamey, who serves as the executive director of the Oregon Winegrowers Association expressed her concern, “There are indications that the OHA deliberately concealed significant data while pushing for a tax surge that would severely harm sectors that are already grappling with various business and climate-induced challenges”, she voiced to Wine Spectator.

Jonathan Modie, a key communications officer from OHA, admitted his agency’s oversight in not publishing a final report by ECONorthwest until January 25, 2024, following its outing by the media. Despite revealing a preliminary report in November 2021, Modie acknowledges that this delay resulted in a lack of full transparency towards Oregon’s citizens regarding ECONorthwest’s crucial findings and suggestions. OHA wants to express its apologies for this misstep.

Within the report, the research concerns the impact of excessive alcohol consumption within Oregon and looks into the ramifications of increasing excise tax on beer and wine to 20¢ per standard drink. Presently, the levy stands at 67¢ per gallon for table wine and $2.60 for 31 gallons of beer. This modification would mean Oregon’s tax soars from one of the lowest in the country, to one of the highest.

In terms of consumption, the study suggests that a higher tax would lead to an overall reduction by 5 percent. However, the situation with excessive drinkers—who burden the government most with alcohol abuse spending—is predicted to decrease only by around 2 percent. If these excess drinkers switched to less expensive alcohol types—a possibility considered by the researchers—this reduction dips below 1 percent. Regardless, they estimate that the tax hike would significantly increase Oregon’s government revenue to a projected annual figure of between $239 and $245 million.

McKamey, a member of a newly formed task force exploring these issues, said: “In recent legislative sessions, there’s been significant debate about beer and wine tax hikes. However, during the last session, lawmakers weren’t ready to pass a tax increase. Such a move demands a three-fifths majority, and the votes just weren’t there. So, we consented to back the formation of a task force to explore these matters more comprehensively.”

The gathering of a 20-person group took place for the first time in the early part of January, with the forthcoming session scheduled to occur on February 1. This will include a presentation by OHA. Although the upcoming legislative session is on the calendar for February 5, the task force’s report isn’t expected until September. “We can anticipate a bill in the following session,” explained McKamey.

Considering that Oregon does not place a sales tax, wineries are faced with the financial impact of potentially increased taxes or the requirement to revise upwards their prices in a market that is becoming more and more competitive. At the moment, a mere 3 percent of revenue garnered from alcohol taxes is allocated towards mental health and drug addiction interventions. The approach to the use of existing tax funds needs reconsideration, proposed McKamey. “The allocation of funds and their impact seem misaligned.”

Modie and OHA, however, are of the opinion that a rise in tax would serve the interests of the state. “Numerous research bodies suggest that hiking the prices of alcoholic beverages and other similar strategies can effectively curb the excessive consumption of alcohol and consequent negative effects.”

This, unfortunately, does not seem to include the study carried out by OHA.

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About the Author: Chris Lehoux

Meet Chris Lehoux, an experienced wine connoisseur and dedicated blogger with a deep passion for all things wine-related. With years of expertise in the industry, Chris shares insightful wine reviews, valuable wine tasting tips, expert pairing advice, and captivating tales of vineyard visits. Join Chris on a journey through the world of wine, where every sip is an adventure waiting to be savored!