Should a brewery company account for the social costs created by alcohol abuse?

Darwin Brewery (DB) expects more profit growth this year, helped by markedly lower malt costs, after a 5.25% increase in full year net profit of $9.5M. The Darwin-based, unlisted company’s performance was driven by a 29.25% increase in interstate sales. Total revenue rose from $84.3M to $102.5M in the year to June 30. Its national sales volumes rose 16.9% in an overall domestic market that slipped 1% over the year, as Australia’s third largest brewer continued to outpoint its larger rivals.

Managing director Tony Stark said sales in the first half of this financial year were about 20% ahead of the previous first half. He said DB was benefiting from lower malt costs, as barley prices dropped from about $695 a tonne in 2010-11 to about $520 a tonne this financial year. “The very high price of barley took more than $2M of our bottom line,” Dr. Stark said. “It was a very encouraging result in the circumstances and this year’s result should be quite a bit better.”
The strong growth in sales beyond its Darwin base where sales grew 10.5% had resulted largely from the 75% investment in the Premium Brands joint venture with American Beverage Distributors, which began trading in March 2010 and had enhanced national distribution.
Higher export sales, up 14.2%, had been gain in Britain, the United States and New Zealand, although they accounted for only about 2% of the total revenue.
However, DB did not have everything its own way, with its business in home brewing kits suffering a 12.8% fall in sales volumes as Foster’s CUB and Lion Nathan entered the mature market.
Dr. Stark said the home-brew market had been in ‘gradual decline’ since the mid-2000s but still accounted for about 20% of revenue. “The entry of Lion Nathan in 2010 and then CUB last year did hurt us but we’re holding our own,” he said.

Required:
a) Why do you think counting profits ignores the social impacts of a corporation’s products? (5 marks)
b) How would a brewery company account for the social costs created by alcohol abuse? (5 marks )

c) Should a brewery company account for the social costs created by alcohol abuse? (5 marks )
d) Would GDP be positively or negatively affected by costs that arise from alcohol abuse? (Such cost might include those that arise from alcohol-related accidents, alcohol-related crime and so forth)?

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