Md. should consider health and social costs of alcohol industry, not just economics

With barely half of Maryland adults (55 percent) reporting consuming alcohol in the past 30 days, Comptroller Peter Franchot’s focus on increasing alcohol production, sales and consumption without review of the health consequences and costs is misguided.

Segments of the alcohol industry have welcomed Mr. Franchot’s initiative, “Reform on Tap,” but the complete lack of public health and safety input into his recommendations has left the interests of the rest of Maryland out of the picture.

Alcohol-related deaths in Maryland have been rising steadily since 2010 and nearly doubled from 2015 to 2016, from 310 to 582, according to the Maryland Department of Health. This increase is occurring across the state, in all age groups and races/ethnicities, and in both men and women. The Centers for Disease Control and Prevention estimated the economic costs of excessive alcohol use — including health care, lost productivity, crime and motor vehicle crashes — reached almost $5 billion in 2010 in Maryland, or about $2.22 per drink. That the state collects only about $310 million in alcohol taxes annually leaves a gap that is largely covered by taxpayers, both drinkers and non-drinkers.

Americans want regulators and policy makers to put public safety first when it comes to alcohol laws. A recent national poll commissioned by the Center for Alcohol Policy found the most important factors respondents wanted lawmakers to consider are:

  • Reducing drunk driving (77 percent );
  • Protecting health and public safety (70 percent);
  • Reducing underage drinking (62 percent);
  • Encouraging moderation (52 percent);
  • Creating more jobs (48 percent);
  • Increasing economic development (42 percent);
  • Giving consumers more choices (28 percent);
  • Lowering prices (22 percent);
  • And allowing more businesses to produce and sell alcoholic products (19 percent).

The recommendations rolled out last week threaten to whittle away at an important system set in place to promote public safety around a product that, while enjoyed by many, is also an addictive drug and a toxin needing appropriate controls to create a healthy marketplace.

Alcohol law reform task forces claiming needed “modernization” have cropped up across the country, opening the door for vertical integration of a long-standing and effective regulatory structure for alcohol. This system, in place since the repeal of Prohibition, has separated producers from wholesalers and wholesalers from retailers, to prevent the widespread abuses caused by the industry’s vertical integration more than a century ago. Today’s reformers would in effect cut out the middle tier, permitting a concentration of power as huge, foreign-owned producers like AB-InBev and Diageo buy up successful small, local producers.

Such a concentration of power is indeed on its way. The fastest growing craft brewers in the nation, according to trade publication Beer Marketer’s Insights, are those that have already been bought up by the alcohol transnationals.

We need only look to the United Kingdom to see how this deregulation story will end. Since 2003, when the U.K. deregulated much of its alcohol distribution system, four large chains have captured 75 percent of the market. Their aggressive sales practices and price wars have driven up consumption and harms including violent crime, emergency room admissions and death.

Given the potential harms that deregulation of the alcohol trade can bring about, we urge Maryland lawmakers to consider the following as they seek to support small, local craft brewers:

  1. Ensure that new laws make clear that privileges granted to small operators are not extended to the large producer if later purchased. Exemptions, such as volume limits, should be structured so benefits accrue to the start-up producers for which they are intended.
  2. Consider the increased burden on law enforcement. More alcohol licenses create the conditions for more alcohol-related crime, noise and nuisance in our neighborhoods. Brewpubs are alcohol retailers and should be treated as such, with their licensing subject to the same parameters as others.
  3. Inquire how new products will be tested to ensure product safety. The federal Tax and Trade Bureau, the primary agency responsible for testing alcohol product safety, has limited capacity and only tests a fraction of new products that hit the market.
  4. There are changes in the marketplace that warrant regulators’ attention. New and higher-alcohol products and home/web-based delivery systems are two examples of “innovations” that pose potential threats to health and safety. But regulators should move slowly on reform, because of the potential to unintentionally cause harm.

The Maryland Public Health Association is one of many health-related organizations that would be willing to participate in a process that more fully addresses not only the economics of Maryland’s changing alcohol industry in Maryland, but also its health and social costs.

Raimee Eck (President@MdPHA.org) is president of the Maryland Public Health Association.

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