By Pamela S. Erickson, M.A., CEO Public Action Management, PLC

Former Director, OLCC Director and Prevention Advocate for Oregon Partnership

August 18, 2010

Strategies that reduce cheap alcohol, curtail promotional practices, and limit availability (location, hours, products) are very effective.

Adding such strategies will complement enforcement efforts and provide a more comprehensive prevention program.

CADCA reported in February 2010: “…only 17% of coalitions report being involved in limiting or restricting location and density of alcohol outlets.”

67% did compliance checks and 64% helped enforce laws.

Because some normal business practices — quite legitimate for other commodities — may produce social harm when alcohol is sold.

Why do we need special regulations for businesses that sell alcohol?

As an illustration, imagine you decide to buy a floral business…

1. Efforts to retain and increase customers who are “frequent buyers” of flowers 2. Discounts and promotions to gain new “flower-loving” customers

3. Advertising to young people to build a future customer base

Your business plan would include:

Your business plan calls for: Marketing to heavy

drinkers and alcoholics. Estimates of underage market are 11-18%; 5-20% drink heavily or above recommended levels.

Use of volume discounts to encourage heavy use.

Marketing to youth to encourage present and future alcohol use.

Market Regulations Prevent this Scenario: Large Quantities of Cheap Alcohol Widely Available and Heavily Promoted

The United Kingdom is an example. Today alcohol is available in bars, clubs and grocery stores 24 hours a day, 7 days a week.

They have high taxes, little regulation, poor enforcement and lots of cheap alcohol.

The also have an alcohol epidemic on their hands.

Source: Statistical handbook 2007 (British Beer and Pub Association

Four large chains control 75% of the market.

Most use alcohol as a “loss leader”.

Drinking at home has increased.

The large chains are locked in price wars.

Large increase in public disorder crimes around bars (vomiting, urination, fights, vandalism).

Serving practices promote rapid intoxication.

“Predrinking” at home increases bar intoxication.

Hospital Admissions have doubled for liver disease and acute intoxication.

Drinking and intoxication of youth 15-16 are at very high rates, according to the European School Survey.

0102030405060708090

100

Use in past 12 months

Use in past 30 days

Drunk in past 12 months

Drunk in past 30 days

UK

US

Percent of 15-16 years olds consuming 5 or more drinks on 3 or more occasions in the past 30 days

Availability. Allows alcohol to be sold by the bottle and the drink, but limits the number, location, types of alcohol products, and hours of outlets. Limits consumption and problems.

No “Bargain Booze”. Regulations balance prices, control price competition, and restrict dangerous marketing and promotional practices. Reduces consumption rates.

Children and Teens. Age restrictions protect young people from the serious problems of underage drinking.

Drunk driving. Creates and enforces strict measures against drinking and driving—sobriety checks, blood alcohol limits, driver’s license suspension.

Education and Enforcement. Uses the carrot of education (alcohol awareness programs, “schools” for offenders) and the stick of enforcement (fines, community service and jail) when education fails. Source: Adapted from World Health Organization

recommendations in “What are the most effective and cost-effective interventio ns in alcohol control?”, WHO, 2004.

US SUPERMARKETS SELL CHEAP ALCOHOL

DEREGULATION BY LAWSUIT, LEGISLATION AND BALLOT

Retailer lawsuits against market regulation e.g. Costco v. Hoen

Legislative efforts to increase retail availability

Ballot measure in Washington State to radically deregulate alcohol…supported by big box chains

How can supermarkets survive?

“To earn a dollar, supermarkets would rather sell a $1 item 100 times, making a penny on each sale, than 10 times with a dime markup.”

Net profit for food retailers is less than two pennies on each dollar of food sales.

Source: Food Marketing Institute

Cheap alcohol in stores (sometimes 50 cents a can for beer).

Increase in advertising and promotion.

Increase in alcohol availability, i.e. more types of alcohol in more places with longer hours.

Education about the value of our regulatory system and the importance of price, promotion and availability.

Survey community environment to assess prices, promotions and availability of alcohol.

Review current regulatory measures that impact price and availability.

Advocate for current and enhanced regulatory systems.

Objectives: 1. Determine

community problems with low prices.

2. Educate local policy-makers about the research on price and problems for underage drinking.

3. Advocate for price balancing policies.

Methods: Survey prices in

stores by reviewing weekly ad circulars.*

Survey bar ad promotional practices.*

Review laws/rules Report findings,

summarize research, and make recommendations.

*Not a scientific determination of average or lowest community prices.

Outlet density impacts problems including underage drinking.

• More outlets: • Increase heavy

and frequent drinking.

• Increase violence and assaults.

• Increase underage drinking.

• Strain enforcement resources.

Objectives: 1. Identify problem

areas with high outlet density and alcohol problems.

2. Ensure safe “entertainment districts”

2. Educate policy-makers about outlet density and alcohol problems.

3. Advocate for policies that provide good balance of outlets for communities and neighborhoods.

Methods: Identify a likely problem

area by blocks or census tracts.

Count outlets and display on map.

Obtain crime location data from police and array on map.

Develop report for educational use.

Advocate for local control over community outlets.

Deregulation is incremental and occurs slowly over time. Reversal is difficult.

The original purpose and safeguards of retail stores systems should be recognized as valuable.

Any regulatory change should be carefully evaluated based on likely change in price, promotion, or availability and resultant increase in consumption.

Increase in outlets should also be evaluated based on impact on enforcement resources.

“Alcohol Policy Research & Alcoholic Beverage Control Systems: An Annotated Bibliography & Review,” NABCA, National Alcohol Beverage Control Association, 2008

“What are the most effective and cost- effective interventions in alcohol control?” World Health Organization, February 2004

“Competition and Profit,” Food Marketing Institute Website (PDF about grocery business today)

“The Dangers of Alcohol Deregulation: The United Kingdom Experience,” by Pamela S. Erickson, available on-line at www.healthyalcoholmarket.com .

 “What are the most effective and cost-effective interventions in alcohol control?” World Health Organization, February 2004.

  

“Alcohol Outlet Density and Public Health,” Marin Institute, www.MarinInstitute.org.

 “Fact Sheet: Alcohol Outlet Density,” Alcohol Issues Committee, Capitol Neighborhood, Inc., Madison, Wisconsin.

 “More Alcohol Sales Sites Mean More Neighborhood Violence, New Research Finds,” Science Daily, February 22, 2010.

 “How Alcohol Outlets Affect Neighborhood Violence,” Kathryn Steward, Pacific Institute for Research and Evaluation.

 “The relationship of alcohol outlet density to heavy and frequent drink and drinking –related problems among college students at eight universities,” E.R. Weitzman, et al, Harvard School of Public Health, Health and Place, www.elsevier.com.

 “Why do alcohol outlets matter anyway: A look into the future,” Paul Gruenewald, Prevention Resource Center, Berkeley CA, Editorial, Addiction, 2008.

 

Purpose is to get an idea of prices for typical alcohol products that are readily available. Purpose is not a scientific survey.

Method is to review weekly ad circulars for major grocery and/or liquor store chains that sell major quantities of product on sale. The best method would be weekly tracking for 52 weeks and identify change over time. Prices are seasonal, so expect some ups and downs; for some weeks alcohol may not on be on sale or advertised in a circular.

Track products that kids are likely to drink: beer (not micro-brews), low end spirits, usually vodka, and cheap wine. (Remember that girls and boys drink different products)

Don’t need to decide exactly how cheap is too cheap. There is no standard in the US. Some Canadian provinces have “social reference pricing” which is basically a minimum price.

Don’t make it too complicated. This is an informal survey not a scientific analysis. But, it does answer the question about how cheaply you can get alcohol in your community.

What is a drink size? Beer: 12 oz= 1 drink (@ 5% alcohol) Wine: 750 ml= 5 drinks (@ 12% alcohol ) Spirits: 750 ml= 17 drinks (@40% alcohol or 80 proof)

Calculations: 30 pack of beer @ 15.99 plus 8% tax=$17.27/30 or $.58. Low end vodka @ 9.99 plus 8% tax=$10.79/17 or $.64 Two-buck Chuck @ 2.00 plus 8 % tax=$2.16/5 or $.43 Large jug wine @ 9.99 plus 8% tax=$10.79/20 or $.53 (large bottle is 3 liters

which contains 20 drinks)

Example: Week of July 5-11, Phoenix Metro area Store 1 (Albertsons): Cheapest Beer: $.67 for 18 pack Cheapest Wine: $.51 for 6 bottles of 1.5L wine’ $.57 for 3 Cheapest Spirit: $.23 for 1.75L vodka for 6 or $.26 for one Store 2 (Safeway): Cheapest Beer: $.78 for 18 pack Cheapest Wine: $1.80 for 6 bottles Cheapest Spirits: $.46 for 1.75 L; $.42 for 6 bottles Store 3 (Bashas): Cheapest Beer: $.56 for 30 pack

www.healthyalcoholmarket.com for Healthy Alcohol Marketplace newsletter and resource material