If Pennsylvania privatizes alcohol, will drinking increase?

Posted: April 25, 2013

It's a simple, critical, and sobering question at the heart of the debate over privatizing state liquor stores: Will Pennsylvanians drink more booze if sales are wrested from government control?

Advocates say liquor privatization would mean more convenience, better selection, and lower prices.

But public-health experts say reducing the government's role in alcohol sales comes with a potentially harmful downside - people buy more of the alcoholic beverage that is privatized.

In 2011, the Community Preventive Services Task Force, an independent group appointed by the federal Centers for Disease Control and Prevention, recommended against privatization "based on strong evidence that privatization results in increased per-capita alcohol consumption."

In a review of 17 studies on the subject, the task force found that limiting government's role in sales of beer, wine, and spirits was associated with a median increase of 44.4 percent in per-capita sales for the alcoholic beverage that had been privatized without a corresponding decrease in consumption for other types of booze.

"The common theme here is that if alcohol is more available, people tend to drink more," said Robert Brewer, who leads the alcohol program in the National Center for Chronic Disease Prevention and Health Promotion at the CDC. "So then the question is, where does privatization fit into that?"

The scientific studies reviewed by the task force - covering privatization of beer, wine, or liquor in seven states, two Canadian provinces, and Finland - found that privatizing sales generally results in more outlets for buying alcohol, Brewer said.

A separate study in Sweden, where the government took back control of sales of some types of beer, showed alcohol-related hospital admissions down across all groups, and the number of beer outlets down from 11,550 to 300.

Private stores also may have longer hours than state-owned stores, and may not be as aggressive about checking IDs, leading to increased drinking, said University of Victoria researcher Timothy Stockwell. Increased marketing is also a factor cited by researchers.

Pennsylvania Gov. Gifford Pinchot preached about such results when, at the end of Prohibition in 1933, he set up a State Store system focused on making buying liquor "as inconvenient and expensive as possible."

Stockwell's studies, which tracked alcohol consumption before and after privatization in British Columbia, suggest that for every 10 new liquor stores, there are one additional alcohol-related death and two hospitalizations.

It's simple economics, say Stockwell and others.

"The easier you make it, the more consumption you're going to get," said Robert Nash Parker, a sociologist at the University of California, Riverside, and coauthor of Alcohol and Violence: The Nature of the Relationship and the Promise of Prevention.

But the research also turns simple economics on its head. Most of the studies found that prices tended to increase, not decrease. Also, the increased sales of deregulated wine sales in West Virginia and Iowa, for instance, were not countered by a corresponding change in sales in bordering states.

But Antony Davies, an associate professor of economics at Duquesne University who has studied privatization, says the evidence is not strong enough to support the task force's conclusion.

Pennsylvania, for example, has a high rate of binge drinking relative to other states.

Davies compared states that have government sales against those with privatized systems and found that state control does not correlate with lower rates of alcohol-related problems.

"The question we really want to ask is, 'Does state control lead to better outcomes?' " Davies said. "That research shows no significant relationship."

Stockwell argues that Davies' method fails to account for the many factors that influence alcohol consumption and associated problems, such as the age of the population.

Like Davies, Gov. Corbett's administration questions whether state sales keep the lid on alcohol-related problems.

The current privatization bill would also limit where liquor could be sold. Convenience stores could not sell alcohol, for example, and grocery stores could sell only wine unless they added a restaurant area with seating.

Corbett's proposal also calls for increased enforcement and higher penalties for businesses that sell alcohol to minors, he added.

"We don't believe necessarily that privatization will result in increased problems, but our plan does have some safeguards in effect to make sure that Pennsylvania is better off moving forward," Corbett spokesman Eric Shirk said.

A privatization bill passed the House of Representatives last month, mostly along partisan lines. Democrats, backed by organized labor concerned about losing thousands of union jobs, unanimously opposed the bill, but were not joined by enough Republicans to defeat it.

Although the vote was historic - no privatization measure had ever moved that far - the bill now goes to the Senate, where its future is uncertain. Top Republican leaders there have raised concerns about selling off the state's 600-plus Wine and Spirits Sores, and some have said they would prefer to modernize the existing state system rather than turn it over to the private sector. Senate hearings begin Tuesday.

State Sen. Vincent Hughes (D., Phila.) worries that privatization and ready availability of booze would damage parts of Philadelphia that already have high rates of addiction and crime.

"In distressed communities, the thing you don't need is more folks walking around inebriated," Hughes said.

Villanova University economist David Fiorenza said he believes limits in the bill, along with local zoning, could help communities prevent that. He also noted that private stores would be phased in over time, slowing the rate of new outlets.

The University of California's Parker, however, said privatization leads to lobbying that eventually wears down such safeguards.

Mary Dougherty, director of the Community Services Division at CORA Services, which provides education and counseling for families facing addiction and other problems, said she fears that privatization will lead to more underage drinking and will create more challenges for people trying to stop drinking, especially when government funding for treatment is shrinking.

"You're going to have increased access, and then you're going to come and ask for help and there is none," said Dougherty, whose organization is based in Fox Chase.

She also worries about increases in binge drinking, which is defined as five or more drinks for a man and four or more for a woman on one occasion, or in a short period of time.

The CDC's Brewer says excessive drinking kills about 80,000 people a year and costs $224 billion.

"Excessive drinking is a huge public health problem," Brewer said.

The Community Preventive Services Task Force cited evidence that privatization increases excessive drinking as one of its reasons for maintaining government control.


 

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