ADAI News

Privatized Liquor Sales May Have Unintended Consequences

An article in the June 1, 2012 Everett Herald warns that the new change in how liquor is sold in Washington state may lead to increased drinking and more related problems.  Today is the first day that private retailers like Costco, Safeway, QFC and many others can sell bottled liquor.  Previously, liquor could only be sold in state-owned or state-licensed liquor stores.

Experts believe sales of spirits will increase significantly with increased availability and convenience in the purchase of alcohol, with possible negative consequences.  

"What impact will convenience have on drinking? There's been real clear research across time," notes Dennis Donovan, director of the UW Alcohol & Drug Abuse Institute and a professor in the UW Department of Psychiatry & Behavioral Sciences. "Privatization of alcohol and ease of access has increased use."

Mary Segawa, alcohol awareness program manager with the Washington State Liquor Control Board, said research on privatized sales shows big shifts in alcohol use.

She points to an scientific study in the April 2012 issue of American Journal of Preventative Medicine which reviewed 17 studies looking at the impact of privatization of alcohol sales on per capita consumption.  Taking those 17 studies together -- they included self-reporting of consumption in U.S. and European markets -- there was an increase of more than 40 percent in sales of privatized alcoholic beverages.

Read the full story online.

Washington Liquor Sales Privatization: Update April 2011

A new budget plan released by Democrats in the Washington State House of Representatives includes a proposal to privatize the wholesale distribution of liquor in the state, while retaining state control of retail sales through its liquor stores. The budget predicts that the state would receive $300 million upfront to help close a deficit of $5.3 billion in the next biennium.

Under the proposal, the state would lease out, for 20 years, the wholesale distribution side of the liquor business in a competitive bidding process. The state would get $300 million up front, then annual payments and profit-sharing after that. Proponents say the increased efficiencies from private sector distribution could actually increase the amount of money coming back to the state through taxes and markup on retail sales, which the state would still control by operating liquor stores.

State Treasurer Jim McIntire is not yet sold on the idea. “That liquor privatization piece looks like a work in progress. What I’ve seen so far doesn’t work,” McIntire told seattlepi.com. “You have to make sure you’re getting a good deal with public-private partnerships.”

We will post updates about the alcohol sales plan on this blog. When two initiatives for liquor privatization were on the state ballot last Fall, ADAI prepared a Resource Brief on Privatization of Alcohol Sales, with links to reports, news items, and literature about the potential health and social impacts of private versus state controlled alcohol sales.

Sources: Treasurer, bars balk at liquor privatization plan (Chris Grygiel, seattpepi.com );  Distribution securitization/privatization hybrid? (Austin Jenkins, NW News Network); House Dems outline plan to close $5 billion state budget shortfall (Andrew Garber, Seattle Times)

Canadian Study Links Private Alcohol Sales to More Deaths

A study led by Tim Stockwell at the University of Victoria in British Columbia found a strong correlation between an increase in private liquor stores and alcohol-related deaths, Reuters reported Jan. 31.

The study was conducted in British Columbia between 2003 and 2008, when the Canadian province's 89 health areas partially privatized alcohol sales and the number of private liquor outlets increased by 40 percent. Researchers looked for relationships between the number of alcohol-related deaths, the density of alcohol outlets, and the proportion that were privately owned. 

The study, "Impact on alcohol-related mortality of a rapid rise in the density of private liquor outlets in British Columbia: a local area multi-level analysis," was published online in the journal Addiction on Jan. 18, 2011.

Source: JoinTogether: Study Links Private Alcohol Sales to More Deaths.

WA State Liquor Initiatives I-1100 and I-1105 Could Cost State and Local Coffers Millions

An article in today's Seattle Times says that the two liquor initiatives on the ballot in WA state next Tuesday would significantly impact the nearly $1 billion per year the state collects from the sale and regulation of beer, wine, and liquor.  The money pays for the liquor itself, 325 state stores, a distribution system, and other board functions, including licensing and enforcement.  Most of the rest goes to state and local government general funds.

The article includes two charts that show where the money comes from, where it goes, and what money would be eliminated if either or both of the initiatives passes.

Read the article here:  http://seattletimes.nwsource.com/html/localnews/2013277083_liquorboard28.html

Times columnist Danny Westneat also wrote this week about the initiatives, arguing that instead of simply giving its liquor business away, Washington State ought to look at ways to sell it, as several other states are doing.  Read more here: http://seattletimes.nwsource.com/html/dannywestneat/2013265256_danny27.html

For more information about Initiatives I-1100 and I-1105, see the ADAI Library's Resource Brief on Alcohol Privatization:  http://lib.adai.washington.edu/resourcebriefs/privatization.pdf

The Latest in News on the WA State Liquor Initiatives (I-1100 and I-1105)

With national and state elections only a week away, information about Washington State's two liquor initiatives (I-1100 and I-1105) continues to emerge in the news and online. 

Recent pieces include:

Initiative 1100 & 1105: The Privatization of Liquor (pdf) - This two-page fact sheet from the Association of Washington Cities describes the impact on local and state revenue, an explanation of tax changes proposed by the initiatives, and what will happen in terms of stores and budgets if one or both of the initiatives pass.  Find out about these initiatives and others on the AWC's "Initiatives" page.

Liquor Initiatives I-1100 and I-1105 - This web site from the Municipal Research and Services Center of Washington explains the initiatives and provides links to a variety of organizations (both for and against), fiscal impact statements, local government documents related to alcohol privatization, and news articles/editorials.

I-1100 and I-1105: Local Impact of Washington State Liquor Initiatives - Jacinda Howard, Seattle PI, October 23, 2010.  This article breaks down the differences between the two initiatives, and describes the main positions of each campaign.

McDonnell Pulls Back on ABC Privatization Plans - Michael Martz, Richmond Times-Dispatch, October 23, 2010.  This article reports on Virginia Governor Bob McDonnell's recent decision to rescind his proposal to privatize alcohol in his state, describing reasons both for and against the move.

For information and research about the health and social impacts of the two initiatives, see ADAI's Resource Brief on Alcohol Privatization: http://lib.adai.washington.edu/resourcebriefs/privatization.pdf

Join Together on WA Alcohol Privitization Debate

Join Together continues to follow the liquor initiatives in Washington state, with a recent item about the impact of loss of revenue on cities and local communities if the initiatives are passed by voters.   Read more...

The item points to a recent article in The Columbian, citing city officials in several Clark County communities about the impact of the initiatives on decreasing local revenue.

JTO also cites NPR, which reported Oct. 19 that the opposition to the campaign was largely funded by the beer and wine industry and that the primary supporters of the initiatives include Costco and some grocery stores, restaurants, and big retailers.

The Protect Our Communities coalition includes public officials, firefighters, church groups, labor unions, substance abuse prevention groups, and beer and wine distributors.

Washington Liquor Initiatives Could Reduce Cities’ Revenue

According to an article in The Columbian newspaper, passage of Washington state liquor intitiatives 1100 and 1105 could "reduce local cities’ already dwindling revenue streams."  Reporter Melissa Harshman quotes officials in several Clark County communities on the negative impact that losing state and local revenue from the current state system of alcohol sales would have on local services.   Read more...

 

JoinTogether Highlights WA Alcohol Privatization Debate

The recent report from The Marin Institute on privatization of alcohol sales in Washington state and Virginia was highlighted today by JoinTogether.org. Contrary to claims by supporters that I-1100 and I-1105 would boost state revenue, the Marin report predicts privatization would be costly to the states and dangerous to the public's health and safety.

"Marin Institute researchers argue that long-term revenue would drop, stating that "privatization in either state will decrease annual state alcohol revenue by $200-$300 million."

Their report quoted estimates predicting that privatization would increase total alcohol consumption by 7 percent, and that spirit sales would jump 21 percent. They wrote that, "increased consumption in either Virginia or Washington State will cause an estimated $50 million per year in harm paid from state coffers (mostly criminal justice costs), and $1 billion per year in total harm costs."

Similar conclusions were drawn in a study by Dr. Randy J. Koch released by the VCU Institute for Drug and Alcohol Studies at Virginia Commonwealth University.

The Richmond Times-Dispatch reported Sept. 22 that Koch said that making alcohol more broadly available would make consumption rise, and that higher levels of consumption increase "chronic disease, motor vehicle and other accidents, violence, and loss of productivity in the workplace."

Seattle Times: Inside the Liquor Battle (I-1100 and I-1105)

This morning's Seattle Times has a front page article about the two Washington state liquor privatization initiatives:  Inside the liquor battle: Who'd win, who wouldn't. 

According to reporter Melissa Allison, thousands of small players, including wineries, breweries, and liquor store managers, fear for their livelihoods if I-1100 passes in November.  Additionally, about 930 state liquor distribution/store workers are expected to lose their jobs if either initiative passes.

The article says that most small businesses do not care if the state is pushed out of the liquor business; their primary concern is with the massive deregulation built into I-1100.  I-1105 keeps more of the current regulations in place, but could still negatively impact small grocers. 

Read more at the Seattle Times web site:  http://seattletimes.nwsource.com/html/businesstechnology/2012960050_liquor22.html

And find more articles, books, and other resources about the impact of privatization of alcohol in ADAI's Resource Brief on Privatization:  http://lib.adai.washington.edu/resourcebriefs/privatization.pdf

Marin Institute Report on the Dangers of Alcohol Privatization

Alcohol industry watchdog The Marin Institute released a new report "Control State Politics:  How Big Alcohol is Dismantling Regulation State by State."  The efforts of the alcohol industry to privatize sales are called one of the biggest potential threats to public health policy. 

The report describes the likely impact to states that privatize liquor sales, an issue under consideration in Washington and Virginia.  While the states may experience a short-term windfall, the report found that in the longer term, the states' loss of a reliable revenue stream, coupled with the inevitable increase in alcohol outlet density, consumption, and alcohol-related injuries and violence, will result in significant harm to the public's health and economic stability.

The report includes a Q&A about Washington State's two privatization initiatives: I-1100 and I-1105, both on the ballot this November.

Read the report and related documentation, including the Q&A about Washington's situation:  http://www.marininstitute.org/site/index.php?option=com_content&view=article&id=546&Itemid=15