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Report on I-1100 and I-1105: Costco Bad, State-Run Liquor Good
The alcohol industry watchdog Marin Institute, whose mission (drafted, I think, by the Lady's Temperance League in 1923) is to "monitor and expose the alcohol industry’s harmful actions related to products, promotions and social influence, and support communities in their efforts to reject these damaging activities," has released a report on the effects of privatizing liquor sales in both Washington State and Virginia (where Republican Governor Bob McDonnell has led the charge for private liquor sales in a proposal to the state legislature). Surprise! They don’t like the idea much.
The report takes a look at statewide ballot initiatives I-1100 and I-1105. Both would privatize liquor sales. Proponents of the initiative campaigns argue that the sate-run monopoly comes from prohibition-era controls, and that free market competition will lower liquor prices for Washingtonians. Opponents decry the lack of regulation that either initiative would leave in its wake.
The largest contributors to 1100 are Costco, Safeway, and Wal-Mart. I-1100 scraps the barriers between manufacturer, distributor, and retailer—which is quite an incentive for businesses like Costco.
I-1100 also ices the rule forbidding bulk discounts between retailer and distributor and distributor and manufacturer, another potential (profit) boon for the Costcos and Wal-Marts, buying in bulk from manufacturers and selling as distributors at the regular rate.)
The only contributors to 1105 are Odom’s Southern Holdings and Young’s Market Company (two liquor distributors).
Marin Institute’s distaste for privatization has three main components: public safety, decreased state revenue, and also, Costco is evil. (The report documents Costco's talking points: Costco claims that privatization would benefit the public, offering drinkers greater selection at a lower price while making alcohol sales more efficient than under the current system." But the report seems to doubt Costco's benevolence, instead tying their motivations to the massive sales that Costco would receive from hard liquor. And Marin also offers the thinly-veiled suggestion that Costco is fearmongering: "Playing on widespread public concern about the economy, ")
Obviously, since the report comes from a quasi-prohibitionist group, they've got an inherent bias. But their data is solid—they aren’t just pulling numbers out of a hat. Marin argues that a lot more people will be tippling if liquor is privatized: “Based on comparisons with privatized state systems, spirits consumption in Washington could increase as much as 15 percent in future years," they say, citing the Washington State Auditor’s report on the privatization of alcohol, which indicated that we could have as many as 3,300 private outlets selling booze.
The scary stats make sense given that far more stores will be authorized to sell alcohol. That doesn't necessarily mean that there are 3,300 brand new liquor stores coming to a neighborhood near you—more likely, that's the number of Costcos and Safeways and Wal-Marts all over the state (which already sell beer and wine). But regardless: more locations where you can buy hard alcohol means more drinking, and more drinking means “more alcohol-related problems,” according to a study cited in the report.
And that line about "more alcohol-related problems"? It comes from Alexander Wagenaar, an epidemiologist at the University of Florida. So, they’ve done their homework. Mostly.
And more: the Marin Institute has compiled data which says the average state which controls liquor sales has "14.5 percent fewer high school students reporting drinking alcohol in the last 30 days." States that control alcohol sales also have 9.3 percent fewer deaths of underage people killed in impaired driving situations.
But the bottom line of their report is money. When it comes down to it, the health risks tie back to state revenue loss: “Increased consumption, in either 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. Privatization will also decrease annual state alcohol revenue by $200-300 million.”
The Yes on 1100 campaign dismissed the report and its authors at the Marin Institute, saying "This is not a group living in reality." Additionally, the 1100 campaign points out that the No On 1100 & 1105 camps have pointed to this report, which takes on "big alcohol," but most of their contributions come from Beer and Wine lobbies.
Read the full report for yourself here.
The report takes a look at statewide ballot initiatives I-1100 and I-1105. Both would privatize liquor sales. Proponents of the initiative campaigns argue that the sate-run monopoly comes from prohibition-era controls, and that free market competition will lower liquor prices for Washingtonians. Opponents decry the lack of regulation that either initiative would leave in its wake.
The largest contributors to 1100 are Costco, Safeway, and Wal-Mart. I-1100 scraps the barriers between manufacturer, distributor, and retailer—which is quite an incentive for businesses like Costco.
I-1100 also ices the rule forbidding bulk discounts between retailer and distributor and distributor and manufacturer, another potential (profit) boon for the Costcos and Wal-Marts, buying in bulk from manufacturers and selling as distributors at the regular rate.)
The only contributors to 1105 are Odom’s Southern Holdings and Young’s Market Company (two liquor distributors).
Marin Institute’s distaste for privatization has three main components: public safety, decreased state revenue, and also, Costco is evil. (The report documents Costco's talking points: Costco claims that privatization would benefit the public, offering drinkers greater selection at a lower price while making alcohol sales more efficient than under the current system." But the report seems to doubt Costco's benevolence, instead tying their motivations to the massive sales that Costco would receive from hard liquor. And Marin also offers the thinly-veiled suggestion that Costco is fearmongering: "Playing on widespread public concern about the economy, ")
Obviously, since the report comes from a quasi-prohibitionist group, they've got an inherent bias. But their data is solid—they aren’t just pulling numbers out of a hat. Marin argues that a lot more people will be tippling if liquor is privatized: “Based on comparisons with privatized state systems, spirits consumption in Washington could increase as much as 15 percent in future years," they say, citing the Washington State Auditor’s report on the privatization of alcohol, which indicated that we could have as many as 3,300 private outlets selling booze.
The scary stats make sense given that far more stores will be authorized to sell alcohol. That doesn't necessarily mean that there are 3,300 brand new liquor stores coming to a neighborhood near you—more likely, that's the number of Costcos and Safeways and Wal-Marts all over the state (which already sell beer and wine). But regardless: more locations where you can buy hard alcohol means more drinking, and more drinking means “more alcohol-related problems,” according to a study cited in the report.
And that line about "more alcohol-related problems"? It comes from Alexander Wagenaar, an epidemiologist at the University of Florida. So, they’ve done their homework. Mostly.
And more: the Marin Institute has compiled data which says the average state which controls liquor sales has "14.5 percent fewer high school students reporting drinking alcohol in the last 30 days." States that control alcohol sales also have 9.3 percent fewer deaths of underage people killed in impaired driving situations.
But the bottom line of their report is money. When it comes down to it, the health risks tie back to state revenue loss: “Increased consumption, in either 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. Privatization will also decrease annual state alcohol revenue by $200-300 million.”
The Yes on 1100 campaign dismissed the report and its authors at the Marin Institute, saying "This is not a group living in reality." Additionally, the 1100 campaign points out that the No On 1100 & 1105 camps have pointed to this report, which takes on "big alcohol," but most of their contributions come from Beer and Wine lobbies.
Read the full report for yourself here.
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