Alcohol Policy and Social Change: Creating Safer Community Environments

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1 Alcohol Policy and Social Change: Creating Safer Community Environments James F. Mosher, JD Alcohol Policy Consultations March 6, 2012 Presentation at the 7 th Annual Summit on Substance Abuse, Mental Health and School Safety/Discipline, Georgia Council on Substance Abuse, Callaway Gardens, Lodge & Spa Conference Center

3 State/Community Challenges: A time of crisis Diminishing public revenues Dismantling of the public health and safety infrastructure

Federal Substance Abuse Prevention Funding levels, 2005-2012

4 Federal Substance Abuse Prevention Funding levels, (Millions of dollars) $1,400 $1,200 $1,000 $800 $600 $400 $200 $0

40 EUDL Program Actual, Inflation Adjusted, Amount Needed for Stable Funding 35 30

5 40 EUDL Program Actual, Inflation Adjusted, Amount Needed for Stable Funding EUDL funding EUDL funding (adjusted) Stable funding

6 Public Health Impact of Excessive Drinking 79,000 deaths and 2.3 million Years of Potential Life Lost (YPLL). Third leading preventable cause of death in the United States. CDC (2010)

7 Excessive Drinking: A Risk Factor for a Wide Range of Health Outcomes Motor Vehicle Crashes Other Unintentional Injuries Suicide Unintended Pregnancy, FASD, STDs, AIDS Excessive Drinking Alcohol Dependence Interpersonal Violence Liver and cardiovascular disease; breast cancer

8 Economic Costs of Excessive Drinking (U.S., 2006) Total Costs $223.5 billion $1.90 per drink Costs to Government $94.2 billion $.80 per drink Bouchery et al. 2011

9 Underage Drinking: A Critical Component of the Alcohol Market Those who begin drinking before age 15 are four times more likely to become heavy consumers than those who wait until age 21. Source: National Research Council/Institute of Medicine (2004); SAMHSA (2010)

10 Underage Drinking: A Critical Component of the Alcohol Market More than one fifth of underage drinkers begin before they are 13 years old. An estimated 2,800 young people ages 12 to 14 initiate alcohol use each day of the year. Source: National Research Council/Institute of Medicine (2004); SAMHSA (2010)

11 Adult Excessive Drinkers: Share of Alcohol Market 1999 data 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% adult drinkers consumption Most excessive Excessive Moderate Foster, JAMA 2003

12 Alcohol Industry unwanted consumption and sales, % 30.4% Underage Adult Excessive $22.5 billion $34.4 billion Unwanted revenue 49.9% Adult Moderate $53.6 billion Foster, JAMA 2003 Consumption Retail Expenditures

14 Diageo: The Innovator of the Distilled Spirits Industry Formed in 1997 when Guinness and Grand Metropolitan merged, becoming the largest distilled spirits company in the world. Determined to expand the U.S. market, which has been dominated by beer.

18 Captain Morgan maintains its relevance with consumers entering the drinking age because they can associate with the icon. Chief Marketer, November 2005

19 Developing Brand Loyalty at an Early Age Diageo rolled out Smirnoff Ice in the US market...it suddenly put the once-stodgy Smirnoff name on the tips of millions of echo boomers tongues (Impact, May 15, 2003) Echo Boomers: Americans born from years old in 2003

22 U.S. Per Capita Consumption By beverage type (14 years+); Gallons of Ethanol Beer Distilled Spirits Wine Source: NIAAA

23 70% 60% 50% 40% 30% 20% 10% 10 Leading Youth Alcohol Brands Percentage use among year olds 5 or more drinks in a row, past 30 days (n=108) 0% A-B brands* Diageo brands** Jack Daniels *Bud Light, Budweiser, Busch, Natural Ice **Smirnoff Ice, Smirnoff Vodka, Captain Morgan s Rum Mike's Bacardi Siegel et al. 2011

24 Smirnoff TV Ads Violating Industry Voluntary 30% Underage Audience Composition, 2005 Smirnoff Ice: 1,318 ads, $1.1 million, 46.4 million youth impressions Smirnoff Vodkas: 337 ads, $463,000, 43.2 million youth impressions The brand with the second most violating ads (behind Corona beer) Source: Center on Marketing and Youth

25 Supersized Alcopops: Binge in a Can

29 African American youth are much more likely to be exposed to alcohol marketing than all youth. African American youth drink less and are more likely to abstain. Colt 45 one of the worst brands for overexposing African American youth. Works Every Time

30 Anderson, et al. 2009; Snyder et al. 2006; Pasch et al What the Science Tells Us: Youth Exposure to Alcohol Marketing Increased youth exposure Increased intention to drink Earlier initiation/increase in drinking

31 What the Science Tells Us: Retail Availability Increased alcohol availability Increased alcohol consumption Increased public health/safety problems

32 What the Science Tells Us Increased alcohol prices/taxes Decreased alcohol consumption Decreased public health/safety problems

33 State Excise Beer Taxes (Per gallon; January 1, 2010) 9 States $.06 -$.10 6 States, DC $.11- $ States $.16 - $.20 6 States $.21 - $.31 4 States $.31- $.41 3 States $.41- $.50 3 States $.62 - $.93 3 States $ $1.07 $1.07 Georgia: $1.01/gallon

34 $6.00 $5.00 Georgia Beer Excise Tax Rates Actual vs. Inflation-Adjusted ; tax per gallon $4.00 $3.00 $2.00 Inflationadjusted Actual $1.00 $

35 Georgia Alcohol Excise Taxes CURRENT INFLATION - ADJUSTED Per gallon Per Drink Per Gallon Per Drink Beer $1.01* $.10 $5.65 $.56 Wine $1.51 $.06 $8.45 $.34 Distilled Spirits $2.40 $.04 $13.43 $.22 *Includes $.53/gallon local beer tax

36 Underage Drinking Costs vs. Excise Tax Revenues Texas Economic Costs (2010.) $1.4 billion Alcohol Excise Tax Revenues (2011) $159 million PIRE, 2011; TABC

37 Underage Drinking Costs and Costs: Revenue per Drink ( Georgia) $.44/drink Revenues: $.05/drink PIRE, 2011

How the U.S. Taxpayers Subsidize Captain Morgan Rum: U.S. gives back alcohol excise taxes generated by Puerto Rico and Virgin Island ($192 million in 2009).

38 How the U.S. Taxpayers Subsidize Captain Morgan Rum: U.S. gives back alcohol excise taxes generated by Puerto Rico and Virgin Island ($192 million in 2009). Part 1 Amount increased as part of TARP bailout legislation in 2008 to promote job creation.

39 How the U.S. Taxpayers Subsidize Captain Morgan Rum: Part 2 To increase its share of the give back, the Virgin Islands encouraged Diageo to move the Captain Morgan s Rum distillery from Puerto Rico.

40 How the U.S. Taxpayers Subsidize Captain Morgan Rum: Part 3 Diageo agreed to move its operations to VI, negotiating 46% share of VI s give back alcohol excise tax fund.

41 How the U.S. Taxpayers Subsidize Captain Morgan Rum: Part 4 Incentives include: A new $165 million distillery which VI will build and give to Diageo $70 million/year marketing subsidy ($2.1 billion over 30 years) 90% income tax break and exemption from property taxes

42 How the U.S. Taxpayers Subsidize Captain Morgan Rum: Part 5 Estimated value of the deal for Diageo: $2.7 billion

43 How the U.S. Taxpayers Subsidize Captain Morgan Rum: Part 6 Jobs in PR Distillery: 160 Jobs in new VI distillery: 40* *[estimated] THE RESULT: 120 LOST JOBS!

45 Diageo profits, 2011: $3.73 Billion EUDL budget as a percentage of Diageo s profit:.0014%

46 Diageo s CEO Paul Walsh Diageo chief executive sees salary package hit 3.5m [$5.45 million] as 900 lose jobs 2009 news headline Salary the following year: $9.4 million

47 The Creators of Colt 45 Blast Evan and Daren Metropoulos We want to win. We want to blow these brands out, explode them, and make everyone lots of money. Evan Metropolous

48 The $52 billion Beer Industry Merger: The Payoff August Busch III: $103 million August Busch IV: $106 million Patrick Stokes:* $141 million At least 2,000 U.S. jobs cut (6% of work force) *CEO, current Chair of the Board

49 Net Financial Wealth Distribution U.S., % 7% 11% 29% 43% Top 1% Next 4% Next 5% Next 10% Bottom 80% Wolff 2010

50 Only the people will save the people.

51 May 19, 2011 Maryland Raises Alcohol Tax

52 Voter support for dime-a-drink, Maryland 2010

53 Voter Turnout % of eligible citizens % of eligible voters

55 . Let us develop a kind of dangerous unselfishness

Alcohol Policy and Social Change: Creating Safer Community Environments James F. Mosher, JD Alcohol Policy Consultations

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