Private liquor sales is the national norm

October 6, 2010

There are currently 18 liquor monopoly states across the country including Washington. These are states that maintain some level of monopoly control over the sale of liquor. Washington is one of 12 states that employ a monopoly over both retail and wholesale liquor sales.

Proponents of government control over liquor sales argue that this monopoly status serves numerous social goals such as reducing underage drinking and improving road safety. The National Alcohol Beverage Control Association argues that privatization would likely have adverse impacts on these social goals:

“There would likely be more underage sales, leading to increased alcohol problems among youth including violence and accidents. There would be higher consumption of alcohol and especially of spirits among the adult population as well, likely resulting in more alcohol-related deaths, accidents and alcohol dependent cases needing treatment.” [1]

A 2009 study comparing national per-capita alcohol consumption, underage drinking rates, underage binge drinking, alcohol related road fatalities and DUI arrests, however, questions the impact monopoly sales have on achieving these social goals:

“Evidence from 48 states over time shows no link between market controls and these social goals. While alcohol consumption in license states is slightly higher than in controlled states, among controlled states, greater levels of control are actually associated with increased consumption rates. Rates of underage drinking and underage binge drinking are virtually identical in license and control states. Similarly, there is no difference in alcohol-related traffic deaths in license versus control states. However, among control states, states with the most controls also exhibit the highest rates of alcohol-related traffic deaths—even after adjusting for differences in enforcement of DUI laws. In short, evidence suggests that control of alcohol markets does not imply control of alcohol consumption.” [2]

Along with Washington, a liquor privatization effort is also currently being debated in another control state, Virginia.  The Virginia proposal is being advocated by Governor Bob McDonnell. According to Governor McDonnell, the goal of liquor privatization is to:

  • “End an outdated government monopoly for distilled spirits sales and distribution, and create a free-market and private-sector delivery of a service, which is not a core-function of state government.”
  • “Treat distilled spirits on a level playing field with wine and beer, which have been sold in private outlets for 76 years.”
  • “Stimulate private sector investment, entrepreneurship and job creation – ensuring businesses of all sizes have an opportunity to participate.” [3]

These are similar to the arguments of Initiative 1100 and 1105 supporters.

Here is a breakdown of the liquor monopoly states (including their Electoral College votes):

Retail & wholesale    

Wholesale only 

Alabama (9)

Iowa (7)

Idaho (4)

Michigan (17)

Maine (4)

Mississippi (6)

New Hampshire (4)

Montana (3)

North Carolina (15)

West Virginia (5)

Ohio (20)

Wyoming (3)

Oregon (7)

 

Pennsylvania (21)

 

Utah (5)

 

Vermont (3)

 

Virginia (13)

 

Washington (11)

 

Based on the share of Electoral College votes, monopoly liquor states account for only 157 out of 538 votes (270 are needed to win the presidency). This means the vast majority of Americans live in states with private liquor sales.




[1] “The Effects of Privatization of Alcohol Control Systems,” National Alcohol Beverage Control Association Brochure

[2] “Government-Run Liquor Stores,” John Pulito & Antony Davies,  Common Wealth Foundation, October 2009, at http://www.commonwealthfoundation.org/docLib/20091029_StateStores%28Pulito%29.pdf

[3] “Proposed ABC Privatization Model, ” Office of Virginia Governor Bob McDonnell, September 8, 2010 at  http://www.reform.virginia.gov/Presentations/docs/ProposedABCPrivatizationModel96.pdf