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By Pamela S. Erickson, President/CEO of Public Action Management, PLC OJJDPs 13 th National EUDL Leadership Conference Orlando, Florida August 10, 2011.

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Presentation on theme: "By Pamela S. Erickson, President/CEO of Public Action Management, PLC OJJDPs 13 th National EUDL Leadership Conference Orlando, Florida August 10, 2011."— Presentation transcript:

1 By Pamela S. Erickson, President/CEO of Public Action Management, PLC OJJDPs 13 th National EUDL Leadership Conference Orlando, Florida August 10, 2011

2 Strategies that reduce cheap alcohol, curtail promotional practices, and limit availability (location, hours, products) are very effective. Adding such strategies will complement enforcement efforts and provide a more comprehensive prevention program. CADCA reported in February 2010: …only 17% of coalitions report being involved in limiting or restricting location and density of alcohol outlets. 67% did compliance checks and 64% helped enforce laws.

3 Objectives: Learn about effectiveness of increasing price and limiting availability of alcohol. Learn how to raise awareness about cheap alcohol products in your community. Learn how to work with state and local regulations to limit cheap alcohol products.

4 Very competitive grocery markets bring us lower prices. Since the recession began, people expect and value low prices. But, alcohol is different: Highly competitive, free markets, bring more outlets and heavy promotion. Lower prices increase consumption. Lower prices often require high volume purchase. Continued low prices will eventually lead to serious social problems. Alexander C. Wagenaar, PhD, professor of health outcomes and policy at University of Florida College of Medicine. Our meta-analysis cumulated information from all the published scientific research on this topic over the past half century, and results clearly show increasing the price of alcohol will result in significant reductions in many of the undesirable outcomes associated with drinking."

5 Tilt is 12% alcohol or about 5 drinks; $1.99 or $.40 per drink. Big Flats is $2.50 for 6 pack or $/42 per beer.

6 THIS LOOKS LIKE A LIQUOR STORE/WINE BAR BUT…ITS A BIG BOX GROCERY STORE

7 Walgreens decides to sell alcohol in its nationwide-chain. In Indiana, 183 applications filed and 168 approved as of Jan. 2011, according to ProjectRAD. CDC Task Force recommends policies that limit outlet density based on research showing that increased outlets is associated with excessive alcohol consumption and related harms. thecommunityguide.org

8 The United Kingdom was once a model of regulatory success. Today it is deregulated with all forms of alcohol available in bars, clubs and grocery stores 24 hours a day, 7 days a week. They have high taxes, little regulation, poor enforcement and lots of cheap alcohol. They also have an alcohol epidemic.

9 Source: Statistical handbook 2007 (British Beer and Pub Association

10 Hospital Admissions have doubled for liver disease and acute intoxication.

11 Drinking and intoxication of youth are at very high rates, according to the European School Survey.

12 Finland cut tax on alcohol by 30% and loosened regulations. Alcohol became the leading cause of death for men. Regulations were then strengthened and taxes increased. In Russia, alcohol is a primary cause for drastically reduced life expectancy for men (currently 63 v 74 for Russian women). Recently, they introduced minimum prices in addition to taxes and other measures. New Zealand loosened regulations in 1989 and are now considering stronger measures in the face of problems. Brazil has few business regulations and high rates of homicide, liver cirrhosis and traffic fatalities involving alcohol.

13 Markets evolve toward domination of a few, large corporations (e.g. Intel, Home Depot). Competition becomes fierce with price wars, loss leaders, discounts for volume consumption. Smaller operators are undercut and many go out of business. National or foreign corporations are rarely constrained by community norms; Regulations can be hard to defend against large corporations with major legal and lobbying resources.

14 How can supermarkets survive? To earn a dollar, supermarkets would rather sell a $1 item 100 times, making a penny on each sale, than 10 times with a dime markup. Net profit for food retailers is less than two pennies on each dollar of food sales. Source: Food Marketing Institute

15 Large chain with many big box stores Warehouses Distribution system Ability to buy directly from manufacturer Ability to buy at discount, sell high volume at discount, freely advertise, and offer promotional incentives.

16 UNITED KINGDOM TREND Four large supermarket corporations have 75% market share. Price of alcohol is 70% more affordable. Cheap prices drove increase in drinking at home/pre-loading. Regulation reduced over a 40 year period to a point where there are few restrictions. UNITED STATES TREND Top 10 supermarket chains have 68% of revenue. US alcohol prices also reduced. Sale prices can reduce price to less than $ per drink. US recession and supermarket prices drive drinking and entertaining at home. Increase in off-premise outlets. Reduction in regulation; increase in hours and days of sale.

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18 WEVE FORGOTTEN WHY WE HAVE ALCOHOL REGULATION FREE MARKET ADVOCATES CRY FOR DEREGULATION

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20 THREATS Identify Problems with Cheap Alcohol in Your Community Document the high price of underage drinking and other alcohol problems. Build Community Awareness about Problems and Educate policy makers about the effectiveness of regulation. Work with local and state regulatory systems to make needed changes. ACTIONS Lawsuits--Retailers and manufacturers challenge marketplace regulations. Since 2005, over half the states have been sued in federal court. Legislation--Retailers challenge retail regulations. (Proposals to sell more forms of alcohol in more locations and extension of hours and days of sale are common.) Ballot measures--Large corporations finance ballot measure signature gathering and campaigns. Budget reductions--prevent regular enforcement.

21 Survey the alcohol retail environment in your community. Take photos of cheap products and those attractive to youth. Check prices in grocery circulars to find cheapest price. Note examples of inducements to buy in volume.

22 Jeremiah Weed Spiked Cola Jeremiah Weed Tea Hard Cider Smirnoff Mixed Drinks (blueberry lemonade and cranberry and lime) New flavors/sizes for beer

23 Purpose is to get an idea of prices for typical alcohol products that are readily available. Purpose is not a scientific survey. Method is to review weekly newspaper ad circulars for major grocery and/or liquor store chains that feature price reductions to increase sales. Track products that kids are likely to drink: beer (not micro- brews) 19%, liquor 44%, alcopops 17% and wine/wine coolers (7%), according to a study by Michael Siegel et al.

24 40 shots of vodka ($.25 per drink) or 18 Light Beers ($.55 per drink)

25 What is a drink size? Beer: 12 oz= 1 drink 5% alcohol) Wine: 750 ml= 5 drinks 12% alcohol ) Spirits: 750 ml= 17 drinks alcohol or 80 proof) Calculations: 30 pack of plus 8% tax=$17.27/30 or $.58. Low end 9.99 plus 8% tax=$10.79/17 or $.64 Two-buck 2.00 plus 8 % tax=$2.16/5 or $.43 Large jug 9.99 plus 8% tax=$10.79/20 or $.53 (large bottle is 3 liters which contains 20 drinks) Example: Week of July 5-11, Phoenix Metro area Store 1 (Albertsons): Cheapest Beer: $.67 for 18 pack Cheapest Wine: $.51 for 6 bottles of 1.5L wine $.57 for 3 Cheapest Spirit: $.23 for 1.75L vodka for 6 or $.26 for one Store 2 (Safeway): Cheapest Beer: $.78 for 18 pack Cheapest Wine: $1.80 for 6 bottles Cheapest Spirits: $.46 for 1.75 L; $.42 for 6 bottles Store 3 (Bashas): Cheapest Beer: $.56 for 30 pack

26 Prepare brief, easy-to- understand report Ask to speak to city council, service clubs Issue press release Seek support of allies: MADD, public health groups, law enforcement, local small business

27 POLICY Ban dangerous products such as alcohol caffeinated energy drinks. Sell alcopops and high alcohol content products in liquor stores. Enact comprehensive price policies: wholesale uniform prices, volume discount bans, ban on retail sale below cost, limit high volume drink specials, reasonable taxes. Limit outlets and days/hours of sale RESOURCE Alcohol Justice (formerly Marin Institute) reports and model legislation Montana alcohol definitions Healthyalcoholmarket.com newsletter, June 2011 Issue When is a beer a beer? Alcohol definitions are critical de- regulation issues. CDC Community Guides

28 Each year alcohol claims 79,000 lives. Alcohol is related to crime and other social problems. While underage drinking has dropped to the lowest level in years, 27% of 12 graders reported being drunk in the past 30 days. Alcohol abuse robs our youths potential. A balanced alcohol marketplace protects the public by keeping prices reasonable, outlets and availability limited and prevents aggressive sales practices. Problems with alcohol touch many Americans. When asked in a Gallup poll, Has drinking ever been a cause of trouble in your family? 31% said yes.

29 2011 Issue Briefs for States, Brief Explanations of Common Regulatory Issues Facing State and Local Communities, Alcoholic beverage preferences and associated drinking patterns and risk behaviors among high school youth, Siegel MD, et al.. Am J Prev Med 40(4), Alcohol Outlet Density and Public Health and other materials, Alcohol Justice (formerly The Marin Institute): Alcohol Policy Research & Alcoholic Beverage Control Systems: An Annotated Bibliography & Review, NABCA, National Alcohol Beverage Control Association, 2008 Competition and Profit, Food Marketing Institute Website (PDF about grocery business today) Effects of alcohol tax and price policies on morbidity and mortality: a systematic review, Wagenaar, A, et al, American Journal of Public Health Preventing Excessive Alcohol Consumption, Guide to Community Preventive Services, The Dangers of Alcohol Deregulation: The United Kingdom Experience, Pamela S. Erickson, The High Price of Cheap Alcohol, Pamela S. Erickson, Toward Liquor Control, Raymond B. Fosdick and Albert L. Scott, Center for Alcohol Policy, What are the most effective and cost- effective interventions in alcohol control? World Health Organization, February 2004

30 for Healthy Alcohol Marketplace newsletter and resource material


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