There has been increasing concern about the harm to health and society caused by alcohol. However the relationship between alcohol and financial inequalities and poverty has not previously been explored. This is the first study in Australia to examine household expenditure on alcohol in relation to financial and demographic factors, residential situation, and financial difficulty. The study uses secondary data from the 2009-10 Australian Household Expenditure Surveys (HES) to investigate the distribution of household spending on alcohol, and the links between alcohol expenditure and the financial difficulties experienced by households. Furthermore, it examines the determinants of alcohol expenditure in order to better inform policies for controlling alcohol consumption and related harms through measures which impact on this behaviour.