Transcript Public Health Concerns about Privatization in Control States

Pamela S. Erickson
President/CEO
Public Action Management
State Regulatory Meeting, July 30, 2012
Silver Spring, Maryland
www.healthyalcoholmarket.com
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CDC estimates 79,000 deaths
occur annually due to alcohol.
Contrast with 6,000 people
lost in two recent wars.
In 2010, 10,228 people died
and 345,000 were injured in
drunk driving crashes.
Underage drinking robs youth
potential. In Maryland, 17%
of youth report binge
drinking.
Once addiction sets in, it is
difficult and expensive to treat.
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Alcohol sold in numerous
“Tied House” saloons
owned by large, out of
state manufacturers. Price
wars resulted in cheap
alcohol.
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Aggressive sales promoted
high volume drinking.
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Social problems: public
disorder, intoxication and
addiction, family wages
squandered, prostitution,
gambling.
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Just look at the United Kingdom
where deregulation has fostered
an alcohol epidemic.
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Underage drinking rates are
twice ours; hospitalization and
disease due to alcohol have
doubled in just 10 years.
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Today alcohol is available in bars,
clubs and grocery stores 24
hours a day, 7 days a week.
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The market is dominated by 4
large grocery chains that
aggressively promote cheap
alcohol.
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Officials estimate that
500,000 Russians die
annually due to alcohol.
Alcohol has cut the life
expectancy for males to
about 60 versus 72 for
women.
One in three males die
before retiring.
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Costco re-wrote 60 pages of state
alcohol laws and gave $22 million to a
campaign to pass a ballot measure in
November 2011 to privatize spirits and
deregulate wine.
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The re-written statutes have increased
availability of spirits from 328 state
stores to over 1,500 outlets (and more
are likely)
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Private system started June 1 and no one
seems happy! Simplistic ideas dealing
with complex problems rarely work.
 Marketing
to frequent customers…for
alcohol…includes underage youth, heavy drinkers
and alcoholics. (Estimates of underage market are 11-18%; 5-20%
drink heavily or above recommended levels.)
 Heavily promoted
sales incentives—such as loss
leaders and volume discounts-- encourage heavy
consumption.
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Marketing to new generations of buyers means
marketing to underage youth
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Availability. Allows alcohol to be sold by the bottle and the drink, but
limits the number, location, types of alcohol products, and hours of
outlets.
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No “Bargain Booze”. Regulations balance prices, control price
competition, and restrict dangerous marketing and promotional
practices.
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Children and Teens. Age restrictions protect young people from the
serious problems of underage drinking.
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Drunk driving. Creates and enforces strict measures against drinking
and driving—sobriety checks, blood alcohol limits, driver’s license
suspension.
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Education and Enforcement. Uses the carrot of education (alcohol
awareness programs, “schools” for offenders) and the stick of
enforcement (fines, community service and jail) when education fails.
Source: Adapted from World Health Organization recommendations.
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Prices set high enough to
keep consumption low, but
not too high to induce
bootlegging.
Uniform price requirements
maintain fairness and reduce
opportunity for cutthroat
competition.
Lack of promotions and
incentives to buy and drink in
high volume.
“…increasing the price of
alcohol will result in
significant reductions in
many of the undesirable
outcomes associated with
drinking.”
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Alexander C. Wagenaar,
PhD, University of Florida
College of Medicine.
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CDC’s Task Force on
Community Preventive
Services recommends limits on
alcohol outlet density “on the
basis of sufficient evidence of a
positive association between
outlet density and excessive
alcohol consumption and related
harms.”
Task Force also recommends
maintaining limits on days and
hours of sale.
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More outlets:
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Increase heavy and frequent
drinking.
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Increase violence and
assaults.
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Increase underage drinking.
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Strain enforcement
resources.
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Several states ban alcohol
energy drinks.
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Some also ban very high
proof products (190) or
have special purchase
procedures.
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Many states require
higher alcohol content
products to be sold only
in liquor stores.
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Advertising rules
Wholesale uniform
prices
Bans on volume
discounts and
coupons
Happy hour rules
Limits on drink
“specials”
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Excise tax and sales taxes.
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Tax collection done by
wholesalers and saves money.
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License fees.
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Special event or extra-privilege
fees.
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Most Americans don’t drink or
drink quite rarely. (CDC
survey)
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Only about 20% drink enough
to be weekly customers.
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Surveys show Americans are
satisfied with the number of
alcohol outlets.
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87% of consumers said they
are satisfied with the variety of
alcohol offered in their
communities. (Center for
Alcohol Policy national survey)
Courts and other public officials sometimes
don’t think our regulations work… or fail to
understand the need for a system which
uses multiple measures of control:
“The court found no “persuasive evidence that the
purpose of any of the challenged restraints was to
promote temperance by raising average beer and wine
prices.” And, the state “could readily achieve that goal
in a manner that does not run afoul of the Sherman
Act. Most obviously the State could adopt higher
excise taxes.” US District Court, Costco v. Hoen
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Few policy-makers understand or
value many of our alcohol
regulations.
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Media makes fun of “antiquated”
regulations or suggests we do not
need a “nanny state.”
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Poor quality “studies” claim
deregulation will create hundreds
of jobs and greatly increase
government revenue.
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National big box grocery chains
want to sell all forms of alcohol
with little or no regulation.
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This isn’t Russia. Democracies require slow
deliberation for wise decision-making. (In
contrast, Russia solved problems with
casinos in 2009 by closing all of them at one
time.)
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The UK has been attempting to “reregulate” for many years…but problems
fester as regulation remains weak while they
deliberate.
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Industry has considerable power while
public health is often silent due to grant
prohibitions on “lobbying”..
”
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It pays to be very careful when considering
deregulation as it will be difficult to revert
back.

“2012 Issue Briefs for States, Brief Explanations of Common Regulatory Issues Facing State
and Local Communities,” www.healthyalcoholmarket.com
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“Alcohol Outlet Density and Public Health”, Alcohol Justice (formerly The Marin Institute):
www.alcoholjustice.org
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“Alcohol Policy Research & Alcoholic Beverage Control Systems: An Annotated Bibliography
& Review,” NABCA, National Alcohol Beverage Control Association.
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“Preventing Excessive Alcohol Consumption,” Guide to Community Preventive Services,
www.thecommunityguide.org
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“The Dangers of Alcohol Deregulation: The United Kingdom Experience: 2012 Update,”
Pamela S. Erickson, www.healthyalcoholmarket.com
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“The High Price of Cheap Alcohol,” Pamela S. Erickson, www.healthyalcoholmarket.com
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Toward Liquor Control, Raymond B. Fosdick and Albert L. Scott, Center for Alcohol Policy,
www.centerforalcoholpolicy.org
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“What are the most effective and cost-effective interventions in alcohol control?” World Health
Organization, February 2004
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“Today’s alcohol demands a closer look,” National Alcohol Beverage Control Association,
www.nabca.org.
Website Highlights:
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Monthly newsletter, educational
pieces, PowerPoint presentations from
conferences. (These are free!)
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Recent updated report on UK, “The
Dangers of Alcohol Deregulation: the
United Kingdom Experience, 2012
Update” can be downloaded from
website.
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Issue Briefs for 2012 has simple
explanations of alcohol regulatory
issues as well as citations for research
and more information.