Alcohol Deregulation Problems

Alcohol Deregulation ProblemsThe 21st amendment returned alcohol policy to where it belonged: state and local governments. Local government is better positioned to determine the needs of its citizens. What works in Las Vegas, Nevada probably doesn’t work in Peoria, Illinois

The Center for Alcohol Policy’s republication of Toward Liquor Control outlines how and why alcohol should be controlled at the local level. Access to and distribution of alcohol is best served (no pun intended) locally. The book, still serving as a guide to alcohol regulation policy, balances public safety and the needs of a changing marketplace.

Alcohol Is a Different Product

Alcohol isn’t like other consumer products – a fact that became exceedingly apparent during Prohibition when the goals of banning alcohol backfired. (See Understanding Alcohol Regulation.) Local acceptance coupled with local enforcement is the key to creating sustainable and sensible policies. States’ rights were fundamental to the creation of the U.S. federal government and, depending on whom you ask, were the source of the Civil War.

Surveys show that 79 percent favor states regulating alcohol sales, and a greater percentage (81%) agree that alcohol is different from other consumer goods. U.S. citizens seem to agree that alcohol should not be deregulated.

Alcohol Deregulation Problems in Other Countries

If there’s a question about the problems that arise with alcohol deregulation, the United Kingdom poses an example of what can go wrong. In the U.K., alcohol has been deregulated to the point where it can be sold anywhere, anytime. Deregulation led to an increase in consumption.

According to The Dangers of Alcohol Deregulation: The United Kingdom Experience 2012 Update by Pamela Erickson, M.A. (CEO, Public Action Management, PLC), during the five decades of alcohol deregulation, consumption by the population as a whole more than doubled, and the type and character of consumption changed as well. Rather than a beer in a pub, drinking involved greater numbers of products typically consumed at home.

New laws allowing 24/7 sales of alcohol in an attempt to curb “last call” issues (with patrons drinking more and leaving simultaneously) appeared to have the opposite effect: the introduction of megabars that encouraged extreme intoxication. Additionally, underage drinking increased with underage drinkers showing up at hospitals with alcohol poisoning, and hospital admissions for alcohol-induced liver disease doubled in ten years.

By the end of the last decade, it was apparent that alcohol deregulation was a mistake, and in attempt to curb consumption, a tax was levied to increase the price hoping to decrease consumption. The effort failed because deregulated market forces prevented the tax increase from being passed along to the consumer. Deregulation also had a negative effect on pubs. Purchase of alcohol for in-home consumption increased as price wars among large grocery chains prevailed. The result has been the closure of pubs – there are 20,000 fewer since 1980 as of 2010.

Deregulation in the U.S.?

Erickson concludes that the U.S. is on a similar path regarding affordability, accessibility and marketing as the U.K. An additional worry is the pressure to treat alcohol like other consumer goods at off-premise retail outlets. While there’s certainly no need to return to Prohibition, most will agree that alcohol is not a typical product and the local and state regulations of it are warranted.

If deregulation would occur, it would take time to revert back to the former state. In the case of Prohibition (see Understanding Alcohol Regulation), it took 13 years to repeal the 18th amendment even though it was readily apparent from the outset that the “noble experiment,” as it was known, didn’t work. Trying to re-establish tougher laws and regulations would be even more difficult, as is the case in the U.K. as it wends its way through plenty of alcohol deregulation problems.