Campaign for a Healthy Alcohol Marketplace

UPDATE: The August presentation from Orlando is now posted here.

The High Cost of Cheap Alcohol
Each year alcohol claims 79,000 lives. It is the third leading lifestyle-related cause of death. In 2005, 1.6 million hospitalizations and 4 million emergency room visits occurred due to alcohol. To put these figures in perspective, almost 6,000 military personnel have lost their lives in the Iraq and Afghanistan wars and an estimated 3,000 people die each year due to food borne illness.

Alcohol is related to crime, disease and other social problems. It threatens to rob the potential of our youth who continue to drink at high levels. Problems with alcohol touch many Americans. When asked in a Gallup poll, “Has drinking ever been a cause of trouble in your family?” 31% said “Yes.”

Clearly the cost of alcohol misuse is very high. This suggests we need to do whatever we can to minimize the devastating impact the figures imply. A substantial body of research points to the effectiveness of restricting “affordability, availability and accessibility.”

But regulations that embody these principles are being eroded as alcohol price policies are changed, alcohol outlets are allowed to sell more types of products, hours and days of sale are increased, and the total number of alcohol outlets is increased beyond the need for population growth. Eroding these policies is often sold to the public on the basis of increasing tax revenue and improving customer convenience. However, the only way this would work is if a lot more people buy and drink a lot more alcohol. While surveys usually find public support for alcohol policies to be high, the public doesn’t always understand the impact of changes to single regulations.

This report is designed to educate the public about the alcohol regulatory system and how it works. It focuses on one of the most powerful tools available to control alcohol problems: price. Time and again, research has shown that when prices go up, alcohol consumption and its attendant social problems go down. To be effective, pricing policies must impact the entire marketplace and be related to availability. The reason is that cheap alcohol is primarily a problem when large quantities of inexpensive products flood the marketplace; a few cheap bottles in a remote location do not lead to overall social harm. Our regulatory systems were originally designed with great care by people who knew the dangers of an unregulated marketplace.

For easy reading, the report will answer these questions in separate sections:

What did Prohibition teach us?

What Happened When Alcohol Became Legal Again?

How Did the Current Three-Tiered Regulatory System Change America’s Drinking Habits?

What Has the Balanced Alcohol Marketplace Accomplished So Far?

What Happens When Regulations Are Relaxed?

How Has Globalization Affected Alcohol Use?

What Dangers Lie Ahead?

Click to download the PDF report: The High Cost of Cheap Alcohol

ISSUE BRIEFS: NEW TOOL FOR ALCOHOL POLICY MAKERS

The “Issue Briefs” is a package of short papers that address alcohol regulation issues that often arise during state legislative sessions or local community meetings. It is designed for legislators and other policy-makers who need a short, straightforward explanation of a given issue. For each brief, research citations are given where appropriate. The outline also includes further resources for each topic if any are available.

Alcohol problems are very complex and result from many social factors, some of which we don’t yet fully understand. For example, drinking tends to be more prevalent and to cause greater social problems in northern countries and in northern states within the US. But, no one has adequately explained why people drink more in colder climates. On the other hand, some religions appear to play a role in lowering consumption. The Mormon Church’s presence in Utah and the Muslim religion in several countries likely contribute to low drinking rates. Other socio-economic factors also come into play as young people, males and some ethnic groups drink at higher rates than other groups do.

A complex social problem generally requires a comprehensive system of regulation to address all its facets. Alcohol regulations form a comprehensive system, so changing a single regulation can change the workings of the entire system. For example, removing a ban on volume discount sales for alcohol may seem like a simple change and one that could lower prices for consumers, but it also makes alcohol more available to problem drinkers. In addition, this one change could allow large retailers to drive some smaller stores out of business.

The primary purpose of the alcohol regulatory system and its individual regulations is to protect public health and safety. Whenever a change is proposed, the first question should be: How will this change affect public health and safety?

The “Briefs” can be downloaded from this website and used without modification as an educational tool. Click here to download.


What is this campaign? This campaign is designed to stop efforts to de-regulate the sale and marketing of alcohol. Because alcohol is not an ordinary commodity such as tires or mayonnaise, it must be sold with care and restraint. Examples in other parts of the world demonstrate that alcohol and the "free marketplace" are a bad mix because they produce major social problems. Subscribe to receive e-newsletters
	Why do we need it? Since the 1980's de-regulation of business has become a popular by-word. It is seen as a way to envigorate business and facilitate the benefits of a nationalized or globalized marketplace. However, as we have seen with the recent mortgage meltdown, an unregulated marketplace is not without problems. Such problems are even greater with alcohol, as increased purchasing and consumption can produce a great deal of social harm. Nevertheless, there are very active efforts to deregulate the sale and marketing of alcohol. Deregulation advocates claim that our current marketplace regulations are "antiquated" and should be eliminated.
What business practices can produce social harm? Several normal business practices-legitimate for other commodities-can be harmful with the sale of alcohol. Marketing to frequent buyers to get them to increase purchases: A major portion of frequent purchases of alcohol are alcoholics, heavy drinkers and underage youth. Efforts to market to this population will likely increase addiction, heavy use and underage drinking. Volume discounts, coupons and price incentives: These techniques are usually used to gain new customers or encourage current customers to enter the "frequent buyer" category. With alcohol, this could induce people to become heavy users or addicts. Marketing for future customers: Forward looking businesses often try to capture the hearts of young people as future customers. However, with alcohol that would mean marketing to an underage audience where alcohol is already a major problem.
	What do marketplace regulations do? The overarching goal is to prevent large quantities of cheap alcohol marketed to vulnerable populations. This is accomplished by regulations which keep prices reasonable, prevent marketing to youth and heavy consumers and to prevent marketplace domination. Marketplace domination can result in lower prices, heavy promotion and efforts to push others out of business. Those who are pushed may be tempted to violate rules in order to survive.