State Alcohol Controls

Following the end of prohibition in the U.S. in 1933, states were allowed to establish either "monopoly" or "license" systems to regulate alcohol production, distribution and sales. Monopoly systems monopolized some aspects of the alcohol trade. License systems licensed production, distribution and sales through commercial establishments. No pure monopoly system was established in any state, but partial monopolies were established, most often monopolizing retail sales of one beverage (usually liquor) or another. As a general rule, monopoly states also had more restrictions on licensed aspects of the alcohol trade while license states had more liberal policies.1,2 Each state's regulatory apparatus must be studied separately to be understood.

After 1933, alcohol policy in the U.S. has been characterized by successive waves of deregulation (MLDA laws are an unusual exception in this regard). Beginning in the 1980s there was a broad movement among states to privatize aspects of alcohol monopolies, reduce government involvement in alcohol sales, and increase state revenues through alcohol taxes. Early work by Canadian researchers suggested that privatization led to increases in use and related problems. This early work was given a substantial boost in the U.S. when Holder and Blose3 demonstrated that privatized sales of liquor-by-the-drink led to greater use and problems in North Carolina. This work was followed by a landmark series of studies by Holder and colleagues4,5,6 demonstrating similar impacts of different privatization steps across five additional states. The privatization of alcohol sales has continued in Canada and the U.S. despite evidence of negative public health effects. Returning to Canada, recent PRC studies of a recent privatization of off-premise sales in British Columbia demonstrated increases in use and problems and reductions in beverage prices.7,8,9

References cited:

  1. Gruenewald, P.J. and Janes, K. The role of formal law in alcohol control systems: A comparison among states. The American Journal of Drug and Alcohol Abuse, 17(2): 199-214, 1991. PMID: 1862793
  2. Gruenewald, P.J.; Madden, P.; and Janes, K. Alcohol availability and the formal power and resources of state alcohol beverage control agencies. Alcoholism: Clinical and Experimental Research 16:591-597, 1992. PMID: 1626661
  3. Holder, H.D. and Blose, J.O. Impact of changes in distilled spirits availability on apparent consumption: A time series analysis of liquor-by-the-drink, British Journal of Addiction, 82:623-631, 1987.
  4. Holder, H. D. and Wagenaar, A. C. Effects of the elimination of a state monopoly on distilled spirits' retail sales: A time-series analysis of Iowa. British Journal of Addiction, 85, 1615-1625, 1990. PMID:2289062
  5. Wagenaar, A. C., and Holder, H. D. A change from public to private sale of wine: Results from natural experiments in Iowa and West Virginia. Journal of Studies on Alcohol, 52:162-173, 1991. PMID:2016877
  6. Wagenaar, A. C., and Holder, H. D. Changes in alcohol consumption resulting from elimination of retail wine monopolies: Results from five U.S. states. Journal of Studies on Alcohol, 56:566-572, 1995. PMID:7475038
  7. Stockwell, T. and Chikritzhs, T. Do relaxed trading hours for bars and clubs mean more relaxed drinking? A review of international research on impacts of changes to permitted hours of drinking. Crime Prevention and Community Safety 11:153-170, 2009.
  8. Stockwell, T.; Zhao, J.; Macdonald, S.; Vallance, K.; Gruenewald, P.J.; Ponicki, W.R.; Holder, H.D.; and Treno, A. (2011). Impact on alcohol-related mortality of a rapid rise in the density of private liquor outlets in British Columbia: A local area multi-level analysis. Addiction, 106(4):768-776, 2011 PMID: 21244541
  9. Treno, A.J.; Ponicki, W.R.; Stockwell, T.; MacDonald, S.; Gruenewald, P.J., Zhao, J.; Martin, G. and Greer, A. Alcohol outlet densities and alcohol price: The British Columbia experiment in the partial privatization of alcohol sales off-premise. Alcoholism: Clinical and Experimental Research, 37, 854-859, 2013. PMCID: PMC4204796.