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A new study from the Sheffield Addictions Research Group (SARG) has found that public health policies which reduce spending on harmful products can actually provide a significant boost to UK jobs and the wider economy.

The research, published this week in the journal Addiction, challenges the long-standing industry argument that curbing the sale of tobacco, gambling or unhealthy foods harms the national economy. To test this, SARG researchers developed a sophisticated new model to track how shifts in consumer spending flow through different sectors of the UK economy.

Reallocating wealth, not losing it

The findings show that when people move away from 'unhealthy commodities', the economy can benefit if that spending is reallocated elsewhere. A common argument against stricter regulations is that these industries are vital for employment, but SARG's modelling shows how valuable each commodity is to the economy, and how the reallocation of spending to other sectors can provide greater value to the UK.

This is because money spent on unhealthy commodities often 'leaks' out of the country – for example, to the global supply chains and international corporate headquarters typical of the tobacco and gambling industries – rather than staying to support the UK economy.

By shifting that spending toward domestic sectors like retail, recreation or trades, money stays within the UK for longer. This increased circulation effectively 'recycles' wealth through the domestic economy, supporting a significantly higher number of UK jobs.

The model highlights that the amount of money needing to be reallocated to see a net economic gain varies significantly by product. The effect is most extreme for tobacco: because so little of the money spent on cigarettes remains in the UK, the study found that reducing consumption would boost the economy even if only 4% of the money saved was reallocated to other goods and services.

Key figures from the research

The study simulated the impact of a 10% reduction in spending across four areas, assuming consumers spent that saved money on a typical mix of other UK products and services:

• Tobacco: A 10% drop in spending would boost the economy by £1.86 billion and create over 31,000 full-time jobs.
• Gambling: A 10% reduction would lead to a £1.25 billion boost and over 22,000 new jobs.
• Confectionery: A 10% reduction would result in a £389 million boost and almost 7,000 new jobs.
• Alcohol: The findings were more nuanced. While spending less on alcohol in supermarkets was a net positive for the economy, spending less in pubs and restaurants had a negative impact, as hospitality is a major employer within the UK.

A conservative estimate of benefit

The researchers emphasise that these figures are likely an underestimate of the true economic benefit. The model currently tracks the 'demand side' of the economy – the direct effect of where money is spent. It does not yet account for the massive secondary gains from a healthier workforce, such as reduced sickness absence and increased productivity.

Dr Damon Morris, Research Fellow at SARG and lead author of the paper, said:

"Industry groups often claim that public health measures will cost jobs and hurt the economy. Our research shows the opposite is true for tobacco, gambling and confectionery. When people stop spending on these harmful products, they buy other things, and that actually supports more jobs and generates more value for the UK than the original products did."

About the model

The 'Commercial Determinants of Health Input–Output (CDOHIO)' model used in this study is the latest addition to SARG's suite of policy models. This new, open-source tool allows researchers to calculate the net effects on the economy when consumer spending patterns change for unhealthy commodities including alcohol, tobacco, food and gambling. 

Further reading

Modelling the economic effects of reducing the consumption of unhealthy commodities – Read the full research paper in the journal Addiction.

The CDOHIO Model on GitHub – Access the open-source framework and underlying R code used in this study.

Alcohol Alert Podcast – Dr Damon Morris talks to the Institute of Alcohol Studies about the study.

Going smoke-free could redirect £11 billion a year into local economies – A related SARG study investigating how tobacco spending can be redirected to boost local growth.

Local Health and Global Profits (LHGP) – A project exploring how corporate interests and global profit extraction impact community health.

The Sheffield Tobacco and Alcohol Policy Modelling Platform (STAPM) – Explore the broader modeling infrastructure used to assess health and economic policy.

The SPECTRUM Consortium – Learn more about our multi-university partnership focused on the commercial determinants of health and health inequalities.

This work was supported by the United Kingdom Prevention Research Partnership (UKPRP) and was conducted as part of the SPECTRUM Consortium.