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Regulating in a Climate of Deregulation. Steven Schmidt National Alcohol Beverage Control Association Pamela Erickson Public Action Management Rob Schellhorn Alcohol and Tobacco Tax and Trade Bureau. Lessons from a Regulation Road Warrior. Pamela S. Erickson, M.A.
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Regulating in a Climate of Deregulation Steven Schmidt National Alcohol Beverage Control Association Pamela Erickson Public Action Management Rob Schellhorn Alcohol and Tobacco Tax and Trade Bureau
Lessons from a Regulation Road Warrior Pamela S. Erickson, M.A. Public Action Management Former Executive Director, Oregon Liquor Control Commission Symposium 21, Des Moines, IA, October 3, 2013
Hot Issues • Liquor Stores v. Big Box Grocers—Same rules for all? • More outlets to make more money, sell more alcohol—No consequences? • Three tier issues—buying vertical integration, wholesale regulation enforcement • Late night entertainment districts—more money, more work for law enforcement • Anti-trust—sleeping beauty awakens
Liquor Stores v. Big Box Grocers • Indiana: Sunday sales, cold beer and “same rules for all.” • Kentucky: Maxwell Pic-Pac case. Equal protection for drug stores and grocery stores! Is there a 21st Amendment? • Pennsylvania: Beer wars…beer specialty stores v. taverns v. grocers • Washington State: Market advantages shift to big box stores. • Alcohol specialty stores are safest venues for selling alcohol.
Let’s make more money, create more jobs! • Connecticut governor wants to expand alcohol sales • New licenses created to sell alcohol in non-traditional spaces • Dry jurisdictions go wet • Sunday sales expands • Alcohol is a “legal product” so should be treated like any other legal product • Small changes have no consequences but create jobs and bring in more tax dollars
Three tier system challenges • Illinois: Prohibits manufacturer from owning any part of a wholesaler • Other states adopt franchise protection laws • Arizona: Extensive three-tier violations uncovered • Washington: I-1183 and other efforts weakened, but did not destroy, three-tier system. • Wholesale price restrictions rated as highly effective.
“Vibrant Night Life” • Revitalize inner cities • Create jobs, more money, more tax revenue by selling more alcohol • Law enforcement impact • Problems with public disorder, DUI, underage drinking • The “pre-drinking issue” • Is it cost/effective?
Anti-trust…asleep no more? US DOJ files lawsuit over Anheuser-Busch/Modelo merger DOJ requires notification when ABI intends to buy wholesaler Mexican Federal Competition Commission limits exclusive arrangements of beer duopoly (Grupo Modelo/ABI and FEMSA/Heineken have 98% market share) Craft beer implications
Resources for these issues • www.healthyalcoholmarket.com for legal expert reports from Kentucky Maxwell Pic-Pac lawsuit; for affidavit on vertical integration filed in ABI Illinois case. • www.alcohollawreview.org for Indiana briefs , USDOJ lawsuit against ABI and many other recent cases. • For rating of 47 alcohol policies including wholesale price policies, see: “Efficacy and the Strength of Evidence of U.S. Alcohol Control Policies,” 2013 American Journal of Preventive Medicine, Nelson et al / Am J Prev Med 2013 3;45(1):19 – 28, www.ajpmonline.org • Nightlife issues: “Dealing with alcohol-related harm and the night-time economy,” Executive Summary, Monograph Series No. 43, Australian National Drug Strategy; Responsible Hospitality Institute for best practices and case studieswww.rhiweb.org.
