How Control systems address Public Health Concerns

1. How Control systems address Public Health Concerns Pamela S. Erickson President/CEO Public Action Management Alcohol Law Symposium, September 12, 2011 Chicago, Illinois www.healthyalcoholmarket.com

2. Importance of effective alcohol regulation for Public Health and safety • 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.

3. Let’s Start at the beginning in 1933:“The private profit motive by which sales are artificially stimulated is the greatest single contributing cause of the evils of excess. It can be eliminated most effectively by state control.” Fosdick and Scott, p.58 What’s wrong with the profit motive? Isn’t that what makes American business great?

4. Look what happened in the retail sector before Prohibition: • 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.

5. The saloon system is ancient history. It can’t happen today. • 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.

6. The fact is that some common business practices can create problems when selling alcohol • 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

7. Control system Benefit: Keep Prices from Increasing consumption • 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.

8. Control system Benefit: reduce availability by limiting outlets and days/hours of sale • 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.

9. Control systems Provide greater revenue to offset high cost of alcohol abuse • “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.

10. Source: Elway Research Inc., “Survey of Customers & Non-customers Satisfaction & Potential Changes,” December 2010, Washington State Liquor Control Board Control states serve customers • 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.

11. Research conclusion: • “Based on its charge to identify effective disease and injury prevention measures, the Task Force on Community Preventive Servicesrecommends against the further privatization of alcohol salesin 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.