Big Alcohols Attempt to Dismantle Regulation State by State A
Marin Institute Report Control State Politics September 2010
Slide 2
U.S. Alcohol Control System Two models try to protect public
health and maintain a three-tier system 1 - Control Model state has
direct role in alcohol sales 2 - License Model state agency
licenses private businesses to sell alcohol Privatization
eliminates government control in favor of license model Producer
(Distilleries, Breweries, Wineries) Distributor/Wholesaler Retailer
(Bars/Restaurants, Liquor Stores, Grocery Stores) Drinker
Slide 3
Whats Going On Now? State control is important to public health
Control provides states with a significant and stable source of
income Big Alcohol and big box retailers are using their power to
eliminate state control of alcohol
Slide 4
Many Benefits of State Control Consumption lower rates of
drinking and binge drinking Availability fewer stores with fewer
hours of operation Accessibility state employees better trained and
motivated to keep alcohol out of the hands of underage drinkers
Harm reduced violence, suicide, homicide, assaults Money control
generates hundreds of millions in revenue to states; lowers the
costs due to alcohol-related harm
Slide 5
Where Control Eroded = More Harm Privatization increases outlet
density, which is associated with increased consumption and
alcohol-related harm Studies from Iowa, West Virginia, British
Columbia and Alberta Canada, United Kingdom, and most recently from
Sweden all support need for control.
Slide 6
Erosion of Three-Tier System Concentration of power vertical
integration Industry influence on lawmakers, lobbying,
contributions Spirits v. Beer & Wine spirits manufacturers want
to normalize their product Big Guys v. Little Guys Big Alcohol
wants a level playing field, small breweries, wineries, and
distilleries dont want to get edged out
Slide 7
Erosion Through Court Challenges Granholm v. Heald: narrow
ruling on constitutionality of direct shipping laws Litigation has
expanded Granholm to further deregulate alcohol House Resolution
5034 would protect the states authority to regulate alcoholic
beverages
Slide 8
Battleground: Washington State Currently State Liquor Control
Board controls the distribution and retail of spirits Initiative
1100 the Costco Initiative would dismantle three-tier system
Initiative 1105 a distributor-backed initiative to privatize the
sale of spirits
Slide 9
Washington: Privatization Pushers Costco based in Issaquah, WA.
Wants to buy spirits direct from supplier (volume discounts) as
other products ($70 billion in annual sales)
Slide 10
Washington: Initiative 1100 Privatizes the sale of distilled
spirits Deregulates the sale of beer and wine Demolishes 3-tier
system Costco has opposed state control in courts, legislature
Costco has contributed more than $1 million in cash and in-kind to
I-1100
Slide 11
Washington: Initiative 1105 Privatizes distilled spirits sales;
allows volume discounts Maintains three tier system, most other
controls Privatizes spirits sales, results: increased availability,
higher outlet density Youngs and Odom-Southern contributions =
$2,244,000
Slide 12
Washington State: Control Allies Protect Our Communities
Coalition health care, firefighters, police, parents, teachers,
churches, wholesalers, social services Small Alcohol small
wineries, breweries, distillers that dont want to be shut out of
the market Governor Christine Gregoire protectourcommunities.com
Also making major donations to the No campaign: Beer Institute,
National Beer Wholesalers of America ($2 million each) and the
Washington Beer and Wine Wholesalers ($975,000)
Slide 13
Battleground: Virginia Governor Bob McDonnell used
privatization as a campaign platform Promises (without basis) a
huge cash windfall to fund the transportation Claims that selling
alcohol is not governments job
Virginia: Control Allies McDonnells faces opposition from
skeptical legislators Local Virginia governments concerned about
impact Law enforcement officials Small breweries, wineries,
distilleries Faith coalition, including Virginia Interfaith Center
for Public Policy and Baptist General Association of VA
(yourvaluesyourvoice.com)
Slide 16
Recommendations Politicians Stop using alcohol regulation as a
bully pulpit to call for smaller government. Alcohol is regulated
because it is potentially harmful to residents of (and voters in)
your states. Governors, legislators, and staff Get a history lesson
in the horrible conditions that led to Prohibition, and why 18
states chose to control alcohol sales to protect health and safety.
State regulatory agencies Understand why your jobs are so important
and play a more vocal role in defending state alcohol control and
protecting the public. Voters In Washington State, vote No on both
initiatives there. In Virginia and in every control state, tell
your political leaders to protect the public interest over
corporate profits.
Slide 17
Recommendations National trade orgs for state alcohol
regulators Distance yourselves from industry influence and do more
to stop state alcohol control erosion efforts. Federal government
Help strengthen state role in alcohol regulation; stop undermining
state authority. Public health groups A single-issue focus (e.g.
drunk driving, underage drinking) is not sufficient. Support state
control and regulation of alcohol sales. Alcohol control allies
Alert state residents to the harm and cost privatization will bring
to their states. Urge them to vote down any privatization
initiatives, and tell lawmakers to do the same.
Slide 18
For more information You can download the full text of the
report, Control State Politics: Big Alcohols Attempt to Dismantle
Regulation State by State along with fact sheets and other
resources: MarinInstitute.org Report Authors Sarah Mart &
Michele Simon Contact (415) 456-5692 [email protected]