Government plans to impose a minimum price of 40p per unit of alcohol will have "significant impacts" including a 38,900 reduction in hospital admissions, a 1,149 reduction in deaths and a cut in alcohol consumption by 2.4%, says John Appleby, Chief Economist at the King's Fund, in an article published in the British Medical Journal today.
A 50p minimum price would more than double all these effects, while an economic recession has even greater "sobering" effects, he adds.
Price and disposable income are key to determining the demand for alcohol. Over nearly half a century, spending on alcohol in the UK has increased in real terms more than doubling between 1964 and 2004.
These factors can also be used to form the basis of an alcohol "affordability index." Apart from brief periods since 1980 (generally coinciding with economic recessions and lower disposable incomes), alcohol is now much more affordable than 30 years ago.
But over the last five years, spending has fallen by 17% in real terms back to 1996 levels. This is partly due to the recent recession but also partly precedes it. Binge drinking among young men has also seen a sharp decline in recent years accelerating a generally downward trend since 1998.
In 2010 spending increased marginally, with UK households spending around £42.1 billion on alcohol and everyone aged 18 and over spending on average around £17 a week on alcohol.
But do these figures suggest a problem with drinking in the UK, asks Appleby?
Hospital admissions data suggest there is. In England, alcohol-related admissions doubled between 2002 and 2010 to around 265,000. Alcohol-related deaths also follow a similar pattern of constant increase between 2001 and 2008 although they fell slightly in 2009 to 6,584 in England.
"Whether or not this all constitutes a significant problem now given lags in health and other impacts of drinking and recent falls in consumption the impact of various price and non-price interventions to reduce drinking show significant impacts," he concludes.
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