1. C OMMONWEALTH P REVENTION A LLIANCE Alcohol Outlets in the US: Landscape and trends Alcohol Outlets in the US: Landscape and trends Presented by Steve Schmidt, NABCA Sr. VP. Policy/Communications June 13, 2014

2. Founded in 1938, NABCA is the national association representing the Control State Systems – those jurisdictions that directly control the distribution and sale of beverage alcohol within their borders – such as Pennsylvania ABOUT NABCA

3. “T HE B IG T ENT ” Government Officials / Enforcement Public Health / All Sectors & Tiers of Alcohol Industry Others Interested in Alcohol Issues / International WHO IS NABCA? Membership

4. WHAT WE ARE NOT… We are a beverage alcohol industry organization We are NOT a beverage alcohol industry organization We are NOT an advocacy or lobbying organization &&

5. CONTROL STATE SYSTEMS  Alaska Alabama Idaho Iowa Maine  MD, Montgomery Co.  MD, Worcester Co. Michigan  Minnesota Mississippi Montana New Hampshire North Carolina Ohio Oregon Pennsylvania  South Dakota Utah Vermont Virginia West Virginia Wyoming  Alaska Alabama Idaho Iowa Maine  MD, Montgomery Co.  MD, Worcester Co. Michigan  Minnesota Mississippi Montana New Hampshire North Carolina Ohio Oregon Pennsylvania  South Dakota Utah Vermont Virginia West Virginia Wyoming

6. How history has influenced limits and controls on alcohol today…

7. PRE-PROHIBITION ABUSES Saloons as havens for crime and debauchery Saloons as havens for crime and debauchery Tied-house saloons Tied-house saloons Unfettered Access Unfettered Access Inefficient tax collection Inefficient tax collection Saloons as havens for crime and debauchery Saloons as havens for crime and debauchery Tied-house saloons Tied-house saloons Unfettered Access Unfettered Access Inefficient tax collection Inefficient tax collection

8. Repeal of Prohibition, 1933 THE 21 ST AMENDMENT

10. “TOWARD LIQUOR CONTROL” Commissioned by John D. Rockefeller IV Overwhelming public support needed for prohibition Light wines and beer are not a serious problem

11. “TOWARD LIQUOR CONTROL”, CONT. Recommend eliminating the profit motive Recommend eliminating the profit motive States should control “heavier” alcohol products States should control “heavier” alcohol products Taxation critical with social control as the most important motive Taxation critical with social control as the most important motive Education of public on appropriate use of alcohol critical Education of public on appropriate use of alcohol critical

12. Liquor Stores Liquor and Drug Stores Liquor, Drug & Grocery Stores Liquor, Drug, Grocery & Gas Stations Other RETAIL CHANNELS – SPIRITS

13. Liquor Stores Liquor and Drug Stores Liquor, Drug & Grocery Stores Liquor, Drug, Grocery & Gas Stations Other DRETAIL CHANNELS – WINE

14. Liquor Stores Liquor and Drug Stores Liquor, Drug & Grocery Stores Liquor, Drug, Grocery & Gas Stations Other RETAIL CHANNELS – BEER

15. GROCERY STORE SALES FOR 2014

16. WHY DEREGULATION? (What ultimately leads to increased outlets) Retailers – Big Box, Chain and Grocers Fiscal Distress - State and Local Consumer Focus and Perceptions Dissatisfaction with Government Ideology Alcohol Abuse Apathy

17. BIG BOX, CHAIN & GROCERS

18. FISCAL DISTRESS

19. CONSUMER FOCUS AND PERCEPTIONS

21. DISSASTISFACTION WITH GOVERNMENT Anti-Government Sentiment

22. IDEOLOGY

23. ALCOHOL ABUSE APATHY

24. NEWSPAPER HEADLINES Alcohol’s role in traffic deaths vastly underrreported: Study Binge Drinking in US Seniors ‘Cause for Alarm’

25. How has or might this happen in PA? Do the number and types of outlets matter? A Case Study: Washington State

26. THE WASHINGTON STATE EXPERIENCE NEWSPAPER Voters kick state out of liquor business

27. WHAT HAPPENED IN WASHINGTON Initiative funded primarily by Costco – 22M in 2011, 10M in 2010 Had failed in courts and legislature previously First initiatives in 2010 failed 2011 – Initiative 1183 passes with nearly 57% of the vote Full implementation as of June 1, 2012 First control state to become entirely privatized More importantly – the most sweeping deregulation of a state’s alcohol laws since prohibition.

28. Inform continued policymaking in Washington Inform continued policymaking in Washington Multiple other states currently debating similar changes (includng Oregon) RESEARCH IS TAKING PLACE 28 JULIA DILLEY Ph.D MES, SENIOR RESEARCH SCIENTIST Program Design & Evaluation Services Multnomah County/Oregon Health Authority FUNDED BY THE ROBERT WOOD JOHNSON FOUNDATION JULIA DILLEY Ph.D MES, SENIOR RESEARCH SCIENTIST Program Design & Evaluation Services Multnomah County/Oregon Health Authority FUNDED BY THE ROBERT WOOD JOHNSON FOUNDATION Applying rigorous research methods to understand the impacts Additional research funded by NIAAA

29. ALCOHOL DISTRIBUTION SYSTEM More places and times to buy liquor Pre-1183 State system 328 stores, with 73 maximum hours per week 328 stores, with 73 maximum hours per week Pre-1183 State system 328 stores, with 73 maximum hours per week 328 stores, with 73 maximum hours per week Post-1183 Private System 1,415 stores, with 140 maximum hours per week 1,415 stores, with 140 maximum hours per week 269 former state/contract stores still have active licenses (18% no longer licensed) 269 former state/contract stores still have active licenses (18% no longer licensed) Post-1183 Private System 1,415 stores, with 140 maximum hours per week 1,415 stores, with 140 maximum hours per week 269 former state/contract stores still have active licenses (18% no longer licensed) 269 former state/contract stores still have active licenses (18% no longer licensed) Similar resources for enforcement at LCB Similar compliance check violation rate 90% + compliance for spirits purchase attempts Similar compliance check violation rate 90% + compliance for spirits purchase attempts Similar resources for enforcement at LCB Similar compliance check violation rate 90% + compliance for spirits purchase attempts Similar compliance check violation rate 90% + compliance for spirits purchase attempts

30. Fewer 8 th graders, and 10 th /12 th grade girls, personally believe use is “very wrong” Fewer 8 th, 10 th and 12 th graders (both genders) believe their parents think alcohol use is “very wrong” for them Fewer 8 th, 10 th and 12 th graders (both genders) believe their peers think alcohol use is “very wrong” Data source: established statewide Healthy Youth Survey YOUTH ATTITUDES & BELIEFS Significant increases in pro-alcohol attitudes in among youth

31. Data source: established statewide Healthy Youth Survey YOUTH ATTITUDES & BELIEFS Significant increases in older youths’ perceived access to alcohol More 12 th grade youth think it’s “easy to get” alcoholMore 12 th grade youth think it’s “easy to get” alcohol

32. EMERGENCY DEPARTMENT VISITS Data source: King County (all residents) and Medicaid (minors) to examine trends in Emergency Department (ED) visits pre- and post-law (June 12) Significant increases in ED visits for alcohol-related conditions post-privatization Minors (teens and young adults <21) Minors (teens and young adults <21) Men and women ages 40+ Men and women ages 40+ Significant increases in ED visits for alcohol-related conditions post-privatization Minors (teens and young adults <21) Minors (teens and young adults <21) Men and women ages 40+ Men and women ages 40+ Increases in frequency of drinking for older boys Significant increases in ED visits for alcohol-related conditions post-privatization Significant increases in ED visits for alcohol-related conditions post-privatization Increases in frequency of drinking for older boys Significant increases in ED visits for alcohol-related conditions post-privatization Significant increases in ED visits for alcohol-related conditions post-privatization

33. ALCOHOL THEFTS 33 MEDIA STORY ANALYSIS Themes: Dramatic increase from low theft rate pre-1183; “it’s easy to steal”; organized thefts for resale; some danger for store staff; teens stealing for distribution Themes: Dramatic increase from low theft rate pre-1183; “it’s easy to steal”; organized thefts for resale; some danger for store staff; teens stealing for distribution Nearly $250,000 in specific thefts reported through September 2013 (most news stories did not report amounts) Nearly $250,000 in specific thefts reported through September 2013 (most news stories did not report amounts) Themes: Dramatic increase from low theft rate pre-1183; “it’s easy to steal”; organized thefts for resale; some danger for store staff; teens stealing for distribution Themes: Dramatic increase from low theft rate pre-1183; “it’s easy to steal”; organized thefts for resale; some danger for store staff; teens stealing for distribution Nearly $250,000 in specific thefts reported through September 2013 (most news stories did not report amounts) Nearly $250,000 in specific thefts reported through September 2013 (most news stories did not report amounts) POLICEREPORTS Dramatic increases in alcohol thefts reported by multiple depts (e.g. from 5 in 7.5 years to 83 in 10 months), many by juveniles Dramatic increases in alcohol thefts reported by multiple depts (e.g. from 5 in 7.5 years to 83 in 10 months), many by juveniles

34. WHAT TO WATCH FOR Language Language Opinion Editorials Opinion Editorials Litigation Litigation Initiative/Referendum/Legislation Initiative/Referendum/Legislation Opportunities to criticize the system – scandals, ethics, revenue shortfalls, customer dissatisfaction Opportunities to criticize the system – scandals, ethics, revenue shortfalls, customer dissatisfaction

35. WHAT NEEDS TO BE DONE Keep alcohol concern and harm in public eye Know the science and data – reach out to the experts Learn about your regulatory system and the players Interact with the regulatory agency Support alcohol law enforcement Know other organization positions and when they may be allies Be a savvy and engaged media consumer – know the authors, their motivations, and respond when appropriate Legislative interaction when possible – especially local

36. THANK YOU. Steve Schmidt, Sr. VP Policy/Communications steve.schmidt@nabca.org703-578-4200