Australian and UK Beer Consumption: An Economic Analysis

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Assessment Task
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Table of Contents
Market for beer..........................................................................................................................................4
1 Rate of beer consumption in Australia and UK..............................................................................4
2 Difference between beer consumption in Australia and UK........................................................5
3 Price elasticity of beer demand in Australia and explain factors affecting them.......................5
4 Explain how excise tax the effect market of beer by demand and supply curve.......................5
5..............................................................................................................................................................6
6 Evaluation of policies other tax for reducing consumption of alcohol.........................................6
Labor market.............................................................................................................................................8
1 Real wage growth..............................................................................................................................8
2 Comparison of real wage growth in Australia vs United States..................................................8
3 Current minimum wage laws and use of demand and supply curve..........................................9
4 Impact of minimum wages for an international student in Australia..........................................10
Reference................................................................................................................................................11
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Market for beer
1 Rate of beer consumption in Australia and UK
In Australia, there are almost 128.8 million glasses of beer consumed by the 11.6 million
drinkers of Australia on an average of 7 day period in the year of 2017. Beer covers a
highest share or can say cover wide area in the market of alcohol in Australia. It was
said on the basis that beer consumption by customers is 44% of all alcohol as
compared it with the consumption of wine which is 32%. In Australia, there was 186
million liters of pure alcohol was available for consume the alcohol in Australia in 2016-
2017 on an approximate made. This is the combination of including 73 million litres of
beer, 71 million litres of wines, 24 million litres of spirits, 11 million litres of RTDs, and 6
million litres of cider. This data is for the year 2016-17, out of the total consumption of
alcohol on an average 9.4 litres is consumed by an every person in Australia whose
aged is 15 years or above. This data is given by the ABS of the department of Director
of Health Statistics. Sydney, the city of Australia has the highest capacity of
consumption of alcohol and after then Hobart and then Brisbane comes into the second
and third number (Livingston, and Dietze, 2016).
From 2002-2017, consumption of beer in the United Kingdom had been decreased after
peaking at an average 93.9 litres per head in the year of 2003. In this country, the
people of the UK consume almost 15000 pints of beer and also consume 32020 bottles
of wine for every minute and they spend an amount of £30,000 in 60 seconds. It was
seen that the New Hemisphere city of UK has the highest rate of consumption of beer
per capita (Amienyo, and Azapagic, 2016).
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The best and effective method of measuring the rate of consumption of beer in both
countries is based on the consumption of beer per head. This is because it shows the
real consuming of beer by each individual who is more than 15 years old.
2 Difference between beer consumption in Australia and UK
The difference between the beer consumption in UK and Australia is because of the
price charged for beer. In Australia the price for the beer is much more than the price in
the UK for beer. Australia has the 23rd rank all over the world who consumes beer while
UK got 25th rank.
3 Price elasticity of beer demand in Australia and explain factors affecting them
Beer has the lowest price elasticity whereas the wine and spirits price are more high
than beer that why these are categories as luxury items of alcohol. In Australia, price
elasticity is more because a large amount of income is spent on this product. The
factors which affect this price level of elasticity are income, nature of commodity,
number of uses, share of expenses, income and price level, availability of substations
and others which affect the level of price elasticity for beer demand in Australia ( Jiang,
et. al., 2016).
4 Explain how excise tax the effect market of beer by demand and supply curve
Tax is the big matter and the biggest cost in the price of beer made in Australia.
Increased in the rate of excise has an impact on the beer retail price because as the
excise tax high it directly affect the retail market of beer as it increased the price due to
increased in tax. As the rate of beer increased it decreased the consumption of beer.
The supply and demand is affected by the increases of excise tax. Increase in the
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excise duty will reduce the quantity demand of items that customer demanded. This is
because increased in tax will make less attractive to the customers.
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Cost and benefit is the tool for making decisions based on the cost and the benefits
occur from it. When taking decision for an individual or society regarding the
consumption of alcohol provide the harmful affect top his body, life and also the other
who are related to him such as his families, relative and other and also effect the
society. This will create a adverse situation to society as well as family also. There is no
long term benefits from the consumption of alcohol and this will incur a lot money in it
and this is not be proviude4 any advantage for long term. There so several impact of
consuming alcohol such as effect liver, decrease reputation in society and other
(Newcomer, et. al., 2015).
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6 Evaluation of policies other tax for reducing consumption of alcohol
The Australian government takes various steps in order to reduce the consumption of
alcohol in Australia. The steps taken by it can show their impact as the now this country
increased it rank and placed in 19th rank from all over the world (Buykx, et. al., 2015).
Following are the steps which are taken by this county government to reduce alcohol
consumption.
 Put in writing on the wrapper about its harmful effects
 Increased amount of alcoholic products
 Fixed age who can consume alcohol
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Labor market
1 Real wage growth
The term real wage can be understand as an amount of wages that can be adjusted for
inflation or equal, wages in terms of the accounts (amount) of goods and services that a
person can be purchased. The term real wages is against the nominal wages or can say
in unadjusted wages because in nominal wages inflation cannot be considered. Real
wage growth is the rate of growth in real wage after taking inflation into the account of
real wage so that a purchasing power of an individual can be ascertains (Bishop, and
Cassidy, 2017).
2 Comparison of real wage growth in Australia vs United States
According to the WPI (wages price index), the real wage growth level in Australia is
0.5% which is juts little increased over this percentage in the last three months to march
which is still record low till now. This figure is released by ABS (Australian Bureau of
Statistics). The annual grow3th in wages has fixed at 2.3% but the RBA has see and
want to be increased 2.4% in the year to June. Annual wage growth in the Western part
of Australia and Victoria have a range between 1.6% which is as to high as 2.7%
respectively (Chatterjee, et. al., 2016).
In the United States, between June 2016 and 2017 wages had been grown up by 2.5%
by the inflation factor and it was seen that this level of growth is near to close 1% growth
for the period. In 2019, wages has been risen 5.2% over the same month as in the last
year,. From 1960 to till 2019, averaged wage growth in the US is 6.21% reaching all
time more of 13.78% in the month of January in 1979 and in march of the year of 2009 it
has been recorded as low growth in wage of -5.88%.
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3 Current minimum wage laws and use of demand and supply curve
The minimum wage is the amount at minimum which is paid by an employer to his
employees which is absolutely lower wage rate. In Australia, the current minimum wage
laws are $740.80 for 1 week which is equal to minimum hourly rate of $19.49. The hour
rate in a week that employees work is 38 hours in a week.
When demand for labor and supply for labor is same then this is the situation of market
is in equilibrium at the point where both intersection is meet. When the minimum wages
are implementing or imposed then it create a situation of increase unemployment in the
economy (Healy, 2016.).
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4 Impact of minimum wages for an international student in Australia
For an international student work in Australia as a student, he or she can with an
average income of 20-30 dollars for an hour basis. This rate is applicable to those
whose age is between 20-30 years and having previous any work experience who is
living and studying in Australia on a student visa. The student is able to work only 20
hours per week and for this he can earn 20-30 dollars for 20 hours in a week. The
impact of minimum wage on international student is that he or she can work in Australia
up to 20 hours in a week only in case if a student having a legal student visa and this is
the highest payment made by any country all over world to the student (Marks, 2017).
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Reference
 Amienyo, D. and Azapagic, A., 2016. Life cycle environmental impacts and costs
of beer production and consumption in the UK. The international journal of life
cycle assessment, 21(4), pp.492-509.
 Bishop, J. and Cassidy, N., 2017. Insights into low wage growth in Australia. RBA
Bulletin, March, pp.13-20.
 Buykx, P., Gilligan, C., Ward, B., Kippen, R. and Chapman, K., 2015. Public
support for alcohol policies associated with knowledge of cancer
risk. International Journal of Drug Policy, 26(4), pp.371-379.
 Chatterjee, A., Singh, A. and Stone, T., 2016. Understanding wage inequality in
Australia. Economic Record, 92(298), pp.348-360.
 Healy, J., 2016. The Australian labour market in 2015. Journal of Industrial
Relations, 58(3), pp.308-323.
 Jiang, H., Livingston, M., Room, R. and Callinan, S., 2016. Price elasticity of on-
and off-premises demand for alcoholic drinks: A Tobit analysis. Drug and alcohol
dependence, 163, pp.222-228.
 Livingston, M. and Dietze, P., 2016. National survey data can be used to
measure trends in population alcohol consumption in Australia. Australian and
New Zealand journal of public health, 40(3), pp.233-235.
 Marks, G.N., 2017. University and vocational education, and youth labour market
outcomes in Australia. Journal of Education and Work, 30(8), pp.868-880.
 Newcomer, K.E., Hatry, H.P. and Wholey, J.S., 2015. Cost-effectiveness and
cost-benefit analysis. Handbook of practical program evaluation, p.636.
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