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
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 (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 25 20 15 10 EUDL funding EUDL funding (adjusted) Stable funding 5 0 1998 2002 2006 2010
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)
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
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
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)
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)
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
Alcohol Industry unwanted consumption and sales, 1999 19.7% 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
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.
Captain Morgan maintains its relevance with consumers entering the drinking age because they can associate with the icon. Chief Marketer, November 2005
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 1980-1995 8 23 years old in 2003
U.S. Per Capita Consumption By beverage type (14 years+); Gallons of Ethanol 1.6 1.4 1.2 1 0.8 0.6 0.4 Beer Distilled Spirits Wine 0.2 0 Source: NIAAA
70% 60% 50% 40% 30% 20% 10% 10 Leading Youth Alcohol Brands Percentage use among 16-20 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
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
Supersized Alcopops: Binge in a Can
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
Anderson, et al. 2009; Snyder et al. 2006; Pasch et al. 2007 What the Science Tells Us: Youth Exposure to Alcohol Marketing Increased youth exposure Increased intention to drink Earlier initiation/increase in drinking
What the Science Tells Us: Retail Availability Increased alcohol availability Increased alcohol consumption Increased public health/safety problems
What the Science Tells Us Increased alcohol prices/taxes Decreased alcohol consumption Decreased public health/safety problems
State Excise Beer Taxes (Per gallon; January 1, 2010) 9 States $.06 -$.10 6 States, DC $.11- $.15 12 States $.16 - $.20 6 States $.21 - $.31 4 States $.31- $.41 3 States $.41- $.50 3 States $.62 - $.93 3 States $1.00 - $1.07 $1.07 Georgia: $1.01/gallon
$6.00 $5.00 Georgia Beer Excise Tax Rates Actual vs. Inflation-Adjusted 1971-2011; tax per gallon $4.00 $3.00 $2.00 Inflationadjusted Actual $1.00 $0.00 1971 1981 1991 2001
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
Underage Drinking Costs vs. Excise Tax Revenues Texas Economic Costs (2010.) $1.4 billion Alcohol Excise Tax Revenues (2011) $159 million PIRE, 2011; TABC
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). Part 1 Amount increased as part of TARP bailout legislation in 2008 to promote job creation.
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.
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.
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
How the U.S. Taxpayers Subsidize Captain Morgan Rum: Part 5 Estimated value of the deal for Diageo: $2.7 billion
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!
Diageo profits, 2011: $3.73 Billion EUDL budget as a percentage of Diageo s profit:.0014%
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
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
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
Net Financial Wealth Distribution U.S., 2007 10% 7% 11% 29% 43% Top 1% Next 4% Next 5% Next 10% Bottom 80% Wolff 2010
Only the people will save the people.
May 19, 2011 Maryland Raises Alcohol Tax
Voter support for dime-a-drink, Maryland 2010
Voter Turnout 2010 37.8% of eligible citizens 2008 56.8% of eligible voters
. Let us develop a kind of dangerous unselfishness