A Public Health Partner

Public discussion about control states usually centers around money and efficiency – are taxes too high or too low, should stores be open more hours, is privatization an option? But agencies aren’t just merchants, they’re also regulators charged with ensuring public health.

“Public health as a concept in the control system means creating an environment where responsible alcohol consumption can happen,” says Steve Schmidt, Senior VP of Public Policy and Communications at NABCA.

Immediately after Prohibition ended, citizens in many states opted for government control to prevent a return to excess consumption. “They were concerned about the return of open saloons, and one way to avoid that is have the state take ownership and be involved as an operator,” Schmidt says. “Yes, they would ensure taxes were collected. But ultimately it was really about public health and safety, to prevent the excesses that led to Prohibition in the first place.”

In the decades since those decisions were made, there’s been a lot of research around the relationship between public health and safety and the control systems. One resource is the “Guide to Community Preventive Services,” a systematic review of decades of research put together by the Community Preventive Services Taskforce.

“They’re an independent panel of experts managed by the CDC, which assessed the veracity of alcohol-related research to make sure its methodology was sound and it met muster for scientific inquiry,” Schmidt says. “Specifically, they detailed what happens in a private versus control system, and how to measure the health and safety value of control state policies.”

The report’s conclusion was, “there is strong evidence that privatization of retail alcohol sales leads to increases in excessive alcohol consumption.”

Another resource is “Preventing Alcohol-Related Problems,” published by the American Public Health Association. It includes two chapters that speak about control states specifically, which include the following excerpts.

 

Alcohol Retailing Systems: Private Versus Government Control

By William C. Kerr and Sarah Beth L. Barnett

The US Experience with Privatizations

Privatizations have occurred in a variety of ways in the U.S., including through local and state legislative action and through ballot initiatives. Stakeholders such as retail stores, the alcohol industry and governments have interests in shaping the aspects of the policy for their benefit. Although policymakers may consult with or review public health and safety evidence, privatizations have been crafted to balance the desires of businesses and revenue to the government rather than mitigating potential harms.

Areas and Needs for Future Research

In the U.S., there are no studies on costs of privatization such as health care costs, law enforcement costs or public safety costs. Understanding impacts of government control functions such as product choices and rejections, access to shelf space, consistent mark-up procedures, consistently trained retail employees, store locations, marketing and other aspects is especially needed. For example, no studies have addressed sales to intoxicated patrons comparing government and private stores.

 

Alcohol Control Systems: Taking Action to Prevent Alcohol-Related Harm

By Steven L. Schmidt, Margaret Barchine and Chris Naylor

Conclusion

All control jurisdictions have a unique advantage of deriving revenues from the distribution of alcohol that go toward funding state and local government operations. Control system revenues support essential agency education programs to further promote messaging, trainings and programs aimed at eliminating dangerous alcohol consumption. It is through leadership roles in alcohol prevention initiatives that government agencies in control jurisdictions are able to work together with law enforcement officials, public health and safety organizations and the community at large to coordinate among the many important stakeholders to work toward reducing alcohol-related harms. It is for these reasons control systems play an integral and valuable role in society and are effective models in protecting public health.

 

Tying Research and Regulations

Pamela Erickson is the former Executive Director of the Oregon Liquor Commission. Following her tenure, which ended in 2003, she worked at a nonprofit that prevents underage consumption. After realizing how inaccessible research into alcohol regulations was at the time, she set out to create resources that explained regulations in simple terms. I spoke to Erickson about her work at Public Action Management and the available research regarding control systems and public health.

StateWays: Is there enough research being done in this area, and is it looking at the right data points to determine the impact of regulations on public health?

Pamela Erickson: I think researchers always struggle with inadequate funding. There’s more than there used to be, and we now know a fair amount about what works to curb alcohol-related problems. It’s often difficult to find the political will to adopt or strengthen measures, but we do know what works. What we lack is an understanding of how regulations work in combination. Typically we’ve tested one regulation to see if it’s effective, but in our complex system all these regulations work together. We don’t know what happens when you remove one, or when you add several together. We’re still learning about what’s most effective.

SW: Are there certain commonalities among the control states that are shown to be particularly effective?

PE: After Prohibition the responsibility for alcohol regulation was given to the states, but they had no experience in that area. John D. Rockerfeller sponsored a study of alcohol regulation around the world and created “Toward Liquor Control,” a book that recommended the control system. The experience during Prohibition was that profit-making was the primary motive for alcohol sales, and it produced many problems like heavy consumption and social disruption. The authors said that a license system wouldn’t be able to cure those problems on its own. Since then, the original control system has been modified dramatically to fit the unique characteristics of each state. In Oregon, we recognized in the mid-80’s that it was expensive for state employees to run liquor stores, and in some cases it’s better to have the private sector operate retail locations under a contract store system.

SW: There’s always a balancing act between increasing tax revenue and controlling consumption. Are control states today finding the right balance?

PE: That’s the central task for regulators, and it will always be a challenge. The private sector is very creative and always finding new ways to sell products. But what does the research say? There’s a book called “Alcohol: No Ordinary Commodity,” which basically follows the four P’s of sales: product, price, promotion and place, and how they relate to alcohol control.

Keeping price balanced is important – it needs to be high enough to discourage over-consumption, but not high enough to induce bootlegging. Price is probably the strongest tool available to regulators to assert control, since they have pricing authority. For place, there’s considerable research that shows more availability leads to more consumption, so it’s important to limit access. It’s not just about where alcohol is sold, but also the hours of sale and licensee diligence regarding minors and intoxicated customers. Every state has some type of regulation curtailing certain promotions. In Oregon at the time I was there, we didn’t allow liquor stores to advertise. The idea is not to promote over-consumption, but you have to strike a balance because of how important new products are to the industry. For product, we have the listing process where agencies can refuse to list certain products. So there are a lot of tools at regulators’ disposal.

SW: What are the most common misconceptions around the country about the control system?

PE: There’s a complete misunderstanding in some cases – people wonder why the government is in a business where it’s enforcing regulations and selling product. People don’t understand why the state is given that responsibility. But the experience now with marijuana is helpful and reminds people why the system was created, because they recognize that a regulated product needs to be monitored to curtail excess consumption and keep it out of kids’ hands.

After Prohibition the primary drink was hard liquor, and regulating that was the original rationale for the control system. Initially the control states had very tight control, but as the system evolved and found more ways to safely involve the private sector while also maintaining regulations, those were loosened. Unfortunately states haven’t adopted that model for marijuana yet, but they’re learning a lot from that process.

 

Further Reading

Toward Liquor Control

By Raymond Fosdick and Albert Scott

Originally published in 1933, Re-released by the Center for Alcohol Policy

 

Alcohol: No Ordinary Commodity

Oxford University Press

Released 2010

 

Preventing Alcohol-Related Problems

Textbook from the American Public Health Association

Released in 2017

 

Guide to Community Preventive Services

Published by the Community Preventive Services Taskforce

Summary available in the “American Journal of Preventive Medicine,” 2012

 

Public Action Management

Pamela Erickson

www.HealthyAlcoholMarket.com

 

For further resources in the area of control states and public health, visit www.nabca.org.

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