Alcohol has become so affordable that it is cheaper than bottled water and approaching the price of milk, says a study made public today.

The Otago University research, published in the New Zealand Medical Journal, shows alcohol became increasingly affordable in the 10 years to last year.

The Government says the findings are concerning, and the researchers are using their report to highlight the health and social cost of alcohol misuse - and to push for an increase in the tax on liquor.

"Our analysis suggests alcohol is now probably the cheapest recreational drug in New Zealand and has become increasingly affordable, at the same time as concern about the binge-drinking culture has grown," said Associate Professor Nick Wilson.

He and co-author Dr Fiona Gunasekara found discounted cask wine could cost as little as 62c for a standard drink, discounted beer 64c, discounted bottled wine 65c and spirits 78c. That compared to 67c for a 250ml glass of bottled water and 43c for a glass of milk.

Heavily advertised alcohol discounts - such as in supermarkets - exacerbated the problem.

Professor Wilson said that although the price of alcoholic drinks rose over the decade, the average hourly wage increased more.

The research shows it took 21 minutes in 1999 for a worker on the average hourly wage to afford enough beer to reach the legal driving limit. Last year, it took only 17 minutes.

The researchers said the Government was "shooting itself in the foot" by spending ever-increasing amounts of money on alcohol-related health and crime problems.

Professor Wilson and Dr Gunasekara favoured an increase in the tax on alcohol. They said consideration should also be given to banning loss-leading - selling liquor at below cost to attract shoppers - and advertising alcohol prices.

In August, Justice Minister Simon Power revealed the Government's proposed alcohol law reforms, which adopt in full or in part 126 of the Law Commission's 153 recommendations, made last year, on reducing the harm caused by alcohol.

The reforms have been criticised as not going far enough and missing the chance to make real change, but the Government says they are a starting point for Parliament's discussion on alcohol reform.

Alcohol Action Group spokesman Professor Doug Sellman, from the National Addiction Centre, said the new study made the issue clear-cut.

"No one can say you're talking it up. Lower prices equal harm."

Increasing prices was the easiest and most effective way to curb problem drinking.

A $2 minimum price per standard drink would reduce binge drinking without affecting social drinkers, Professor Sellman said.

Mr Power said: "The fact that this study has found that alcohol is cheaper than bottled water is of concern."

The Government was investigating a minimum pricing scheme by asking retailers to volunteer pricing data during the next year.

PRICE OF DRINKING

43c... milk (250ml glass)

62c... cask wine

64c... beer

65c... bottled wine

67c... bottled water (250ml glass)

78c... spirits

* Price per standard drink

Source: Otago University