Opinion piece first published on online health news blog Croakey on March 25, 2011.

When The Age reported that a retail beer war, with alleged plans to sell cheap booze at less than cost price, ‘could raise social issues’, it was spot on.

Stepping back from the stoush between the retailers the incident should raise some questions more broadly about how we regulate the alcohol industry and how the community is engaged in the process of regulation.

There is no doubt most people like to have a drink, but many Victorians would find the idea of selling beer cheaper than water fanciful and certainly not good for the health of the community.

This latest example (which is hotly contested by the retail giant protagonists) is particularly worrying because there is good evidence to show that when the price of alcohol drops, the incidence of hazardous drinking increases.

Even the Australian Hotels Association (NSW) agree that alcohol is no ordinary commodity. A carton of beer is not the same as a carton of milk or a box of eggs. Alcohol causes harm.

We have laws that regulate the access and availability of alcohol, but we have very little capacity for the community to voice its concern about the business activities of those in the industry - such as “loss leading” by retailers.

Currently, if a local community decided they disagreed with the sale of cheap alcohol, they would have little power to stop this from happening. The onus is on the community to complain about the activities of the industry.

We assume however that because people like to drink alcohol, they are supportive of the business practices in the alcohol industry. This is misleading.

Asking what people think about alcohol and not what they think about the alcohol industry, is comparable to asking people what they think of money but not asking them what they think of banks.

The only reason we became aware of this issue is because the alcohol producer didn’t want their product devalued. What this recent incident illustrates is that the community should have better mechanisms to engage with the activities of the alcohol industry.

Alcohol is responsible, at a conservative estimate, for $15.3 billion a year in health and societal costs – and causes more than 60 medical conditions, including cancer. That’s not counting the individual damage alcohol causes so many Australian families who right now are coping with the illness and violence caused by alcohol.

This incident occurs within the context of Governments and communities becoming increasingly concerned about the impact of alcohol. The alcohol industry’s self regulatory system is illogical and time and time again, it fails to adequately protect the community.

Increasingly, governments are acting to put limits on the alcohol industry. Not so long ago, the Federal alcopops tax was introduced and the Victorian Government has committed itself to allow local communities a greater voice about packaged liquor licenses. This signals that governments want to limit the activities of the alcohol industry and for communities to have their voices heard.

There is an opportunity now to rethink how that community voice gets heard. Currently it is up to the community to complain about the activities of the alcohol industry. What if the onus was put on the alcohol industry to justify its business activities. For example, what if liquor licences were required to disclose the nature of their business activity and were obliged to get the consent from the local community in order to conduct their business.

There are precedents in Victoria, Australia and internationally for industries that do damage as part of their business, to seek consent from the community to conduct its business. Mining companies must get community support when planning mining activities. This is embedded in legislation and could be a viable policy option for the alcohol industry. Industries in this situation must seek a “social licence” from the community, to conduct their business.

This is an opportunity for us to place the responsibility on the alcohol industry to fully inform the community and then to seek the community’s consent for its activities.

Embedding a social licence process into the regulation of the alcohol industry would be an excellent way to bring the alcohol industry in line with community expectations.

VicHealth’s Associate Professor John Fitzgerald is a leading academic in the field of drug and alcohol research and policy making. In 2008 he was recognised for his research and policy work on alcohol consumption among AFL footballers.