Transcript Public Health Concerns about Privatization in Control States

Pamela S. Erickson
President/CEO
Public Action Management
Alcohol Law Symposium, September 12, 2011
Chicago, Illinois
www.healthyalcoholmarket.com
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CDC estimates 79,000 deaths
occur due to alcohol
annually. Contrast with 6,000
people lost in two wars.
Underage drinking robs youth
potential.
Once addiction sets in, it is
difficult and expensive to
treat.
Over 10,000 people die
annually from drunk driving
crashes.
What’s wrong with
the profit motive?
Isn’t that what
makes American
business great?

Alcohol sold primarily in
“Tied House” saloons. Large,
out of state manufacturers
own many retail outlets.

Most common drink was beer,
sold in glasses, kegs and
buckets.

Aggressive sales promoted
high volume drinking.

Social problems: public
disorder, intoxication and
addiction, family wages
squandered, prostitution,
gambling.
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
But deregulation in the
United Kingdom has fostered
an alcohol epidemic.
Today alcohol is available in
bars, clubs and grocery
stores 24 hours a day, 7 days
a week. The market is
dominated by 4 large
grocery chains that
aggressively promote
alcohol.
Underage drinking rates are
twice ours; hospitalization
and disease due to alcohol
have doubled in just 10
years.
 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 use.
 Marketing to new generations
of buyers means marketing to
underage youth

Regulatory
objective:
Prevent Large
Quantities of
Cheap Alcohol
Widely Available
and Heavily
Promoted
•
•
•
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."

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.
•
More outlets:
•
Increase heavy and
frequent drinking.
•
Increase violence and
assaults.
•
Increase underage
drinking.
•
Strain enforcement
resources.

“On average, control states
take in at least $10.00
more per gallon of alcohol
sold compared to license
states. States that control
only sales of spirits receive
nearly $38 more per gallon
than license states.”

Source: National Alcohol Beverage Control
Association. The Effects of Privatization of
Alcohol Control Systems.

Typically, how often would you say you shop
at a State Liquor store?

18%
10%
About once a week
19%
Once a month
Every couple of months
2 to 4 times a year
34%
20%

Once a year

46% of Washington
residents shopped in a
state liquor store in the
past year.
Only 10% of these
consumers shop weekly
for hard liquor.
Stores generally got high
marks from customers.
2/3 said there were the
“right number” of liquor
stores.
Source: Elway Research Inc., “Survey of Customers & Non-customers Satisfaction &
Potential Changes,” December 2010, Washington State Liquor Control Board

“Based on its charge to identify effective disease and
injury prevention measures, the Task Force on
Community Preventive Services recommends
against the further privatization of alcohol
sales in settings with current government control of
retail sales, based on strong evidence that
privatization results in increased per capita alcohol
consumption, a well-established proxy for excessive
consumption.” Centers for Disease Control and Prevention.