CDC Task Force Recommends Against Further Privatization of Alcohol Sales

NABCA email, 10:30 am Tuesday, April 12, 2011 

This morning the US Centers for Disease Control (CDC)’s Task Force on Community Preventive Services announced the decision and rationale for recommending against further privatization of alcohol sales. The website states, “Based on its charge to identify effective disease and injury prevention measures, the Task Force on Community Preventive Services  recommends against the further privatization of alcohol sales in settings with current government control of retail sales, based on strong evidence that privatization results in increased per capita alcohol consumption, a well-established proxy for excessive consumption.”  

The Task Force finding, presented on the CDC website, was made in February 2011. It was based on a systematic review of all available studies, conducted on behalf of the Task Force by a team of specialists in systematic review methods, and in research, practice and policy related to excessive alcohol consumption. 

Preventing Excessive Alcohol Consumption: Privatization of Retail Alcohol Sales

Task Force Finding & Rationale Statement

 Definition 

The privatization of retail alcohol sales is the repeal of government (i.e., nation, state, county, city, or other geo-political unit) control over the retail sales of one or more types of alcoholic beverages, thus allowing commercial retailing of those beverages. States with government control of alcohol sales are referred to as control states, and states with privatized sale are referred to as license states. The privatization of retail alcohol sales generally applies only to off-premises alcohol outlets—retail locations, such as liquor stores, where alcoholic beverages are sold for consumption elsewhere. Privatization does not generally affect the retail sales of alcoholic beverages at on-premises alcohol outlets—locations such as bars and restaurants, where alcoholic beverages are sold for consumption on-site. Re-monopolization of retail alcohol sales is the re-establishment of government control over the retail sale of one or more types of alcoholic beverages. 

Task Force Recommendations & Findings 

Based on its charge to identify effective disease and injury prevention measures, the Task Force on Community Preventive Services  recommends against the further privatization of alcohol sales in settings with current government control of retail sales, based on strong evidence that privatization results in increased per capita alcohol consumption, a well-established proxy for excessive consumption.

 Rationale  

The Task Force finding includes evidence from 21 studies that assessed the impact of privatizing alcohol sales on per capita consumption of the privatized beverage. Sixteen of the 21 studies also examined the effects of privatization on per capita consumption of alcoholic beverages that were not privatized. Following privatization, consumption of privatized beverages increased substantially (median relative increase of 48.2%; interquartile interval [IQI]: 0.0% to 136.7%), and there was little effect on per capita consumption of non-privatized beverages (median decrease of 2.0%; IQI: -5.0% to -0.4%), resulting in substantial net increases in per capita alcohol consumption. Most of the reviewed studies assessed the effect of privatization on per capita alcohol consumption as indicated by alcohol sales or tax data.  

According to the Single Distribution Theory, patterns, or “distributions,” of alcohol consumption are similar across many societies, such that most people drink a small or moderate amount and some people drink a large amount. Because of this pattern, when per capita—or average—consumption changes in a society, consumption changes across the board, but mostly among those who drink excessively. There is extensive evidence supporting the Single Distribution Theory, which allows the inference made in this review that when privatization results in substantial per capita increases in consumption, there are at the same time substantial increases in excessive consumption. One study in the body of evidence on privatization exemplifies the single distribution theory: a cohort study in Finland found that, following the privatization of medium-strength beer, there were increases in alcohol consumption at all levels, including excessive consumption. 

Only two studies in the body of evidence on privatization assessed the effects of privatization on alcohol-related harms (i.e., cirrhosis mortality and motor vehicle fatalities). However, these studies had several methodological limitations (e.g., poor exposure measurement, short follow-up time, and weak proxy outcome measures) and yielded mixed, statistically non-significant results. The only available study of re-monopolization assessed the effects of this policy change on medium-strength beer consumption in Sweden and found statistically non-significant decreases in rates of hospitalization for a variety of alcohol-related harms. 

Most of the evidence regarding the effects of privatization is from the Canada and multiple U.S. states. Although the specifics of privatization differ across U.S. states, consistent results across locations indicate that these findings are likely to apply broadly to U.S. control states. 

The privatization of retail alcohol sales may lead to an increase in per capita alcohol consumption by several means. Privatization commonly results in increases in the number of off-premises outlets and of days and hours of sale, all of which have been shown in previous Community Guide reviews to lead to increases in excessive alcohol consumption and related harms. Increased alcohol outlet density is also associated with increases in social harms, including interpersonal violence and vandalism. Privatization may be associated with increased alcohol advertising, increases in the number of brands sold, and more lax enforcement of sales regulations, including enforcement of the minimum legal drinking age. In contrast, privatization also has generally been associated with an increase in the price of privatized beverages, which may be expected to lead to a decrease in consumption.  

Barriers to maintaining government control of retail alcohol sales include commercial interests, consumer interest in greater choice and greater convenience with privatization, and the perception by governments that they may benefit economically from privatization (e.g., through sale of licenses), at least in the short term. We found no peer-reviewed studies evaluating the economic effects of this intervention, including its potential costs.  

In the United States, as of 2010, two states (Utah and Pennsylvania) retained exclusive government control over off-premises wine retail sales. Those states and six others (Washington, Oregon, Montana, Alabama, North Carolina, and Vermont) retain exclusive government control of off-premises retail sales of distilled spirits. Some states (Idaho, Maine, New Hampshire, Ohio, and Virginia) retain government control of off-premises retail sales of distilled spirits above a specified level of alcohol content. 

This Task Force finding is based solely on evidence related to the public health consequences of privatization, which may be one of several factors considered in making decisions on whether to privatize retail alcohol sales. The maintenance of government control of off-premises sale of alcoholic beverages is one of many effective strategies to prevent or reduce excessive consumption which is one of the leading causes of preventable death and disability.

Review Completed: February 2011 

The data presented on this page are preliminary and are subject to change as the systematic review goes through the scientific peer review process. 

• Page last reviewed: April 11, 2011

• Page last updated: April 11, 2011

• Content source: The Guide to Community Preventive Services

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