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Alcohol Control Where Are We Headed?

Alcohol Control Where Are We Headed?. Wednesday, March 12 th , 2008 Arlington, Virginia. Alcohol Control Where Are We Headed? Isn’t That A Mighty Fine Question!. Wednesday, March 12 th , 2008 Arlington, Virginia. Outcome When This Panel Discussion Is Over……….

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Alcohol Control Where Are We Headed?

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  1. Alcohol ControlWhere Are We Headed? Wednesday, March 12th, 2008 Arlington, Virginia

  2. Alcohol ControlWhere Are We Headed?Isn’t That A Mighty Fine Question! Wednesday, March 12th, 2008 Arlington, Virginia

  3. OutcomeWhen This Panel Discussion Is Over……… • Reviewed and discussed “alcohol regulation – emerging trends” • Focused particularly on both legal and structural changes, what do these changes mean? • Asked ourselves, do the totality of the changes suggest that we are moving toward complete deregulation or some new form of prohibition? • Debated what should be done in reaction to these trends? Fight? Embrace? Accelerate?

  4. Format • 75m = Total Session • 15m = “Teeing Up” The Issue • 40m = Panelist Presentations • 10m = Moderator Questions • 10m = Audience Questions

  5. Panelists • We are delighted to welcome a powerful and diverse panel, containing industry experts with very distinct views on where we are headed or more importantly where we should be headed!- Craig Purser, President, NBWA, CAE- Tom Wark, Executive Director, SWRA- Dr. Peter Anderson, MD, PhD, MPH

  6. Craig Purser, CAEPresident, NBWA • Craig A. Purser, CAE is President of the National Beer Wholesalers Association.  • During his more than ten years with NBWA, he has led a number of successful association initiatives and has been instrumental in the strategic positioning of the association to meet today's challenges by promoting competition and leading the effort to strengthen the three-tier system and state-based regulation.  • A veteran of Capitol Hill and numerous statewide political campaigns, Purser served on the staff of former U.S. Senator and Assistant Majority Leader Don Nickles (R-OK) for nearly five years. 

  7. Tom WarkExecutive Director, SWRA • Tom Wark is Executive Director of the Specialty Wine Retailers Association, a national organization of progressive wine merchants who liberalize shipping laws for wine retailers and consumers. • Tom began his tenure in the wine industry in 1990 at the marketing firm of Gracelyn and Burns in Sonoma County, California. • Tom founded his own communications and marketing firm in 1993 that focused on wine-related communications and marketing. • Tom has worked on various wine related political issues through his associations with Matanzas Creek Winery, Coalition for Free Trade, and Family Winemakers of California. • He received his masters degree in Diplomatic History from San Francisco State University. 

  8. Dr. Peter Anderson, MD, PhD, MPH • Dr. Anderson is trained as a general practitioner and specialist in public health medicine at the University of Oxford and the London School of Hygiene and Tropical Medicine. His PhD was on the risk of alcohol, and he is currently a consultant in alcohol policy. He was the regional advisor for both alcohol and tobacco with the European Office of the World Health Organization from 1992 to 2000. • Since 2001, he has been working as an independent consultant, and has been an adviser in the field of addictions to the European Commission, the World Health Organization and several governments. He was the author of a 400 page report for the European Commission on Alcohol in Europe, translating the evidence base and experience of alcohol policy and prevention programmes for policy makers, programme implementers and researchers. • He has an extensive research background in alcohol epidemiology, intervention research, randomized trials, prevention projects and meta-analytical techniques. He has over 120 publications in peer reviewed journals and is the author or editor of 15 books.

  9. Teeing Up The Issue

  10. What Do We Know About Where We Are Today?

  11. Alcohol In Society From a public health perspective, the global burden related to alcohol consumption, both in terms of morbidity and mortality, is considerable in most parts of the world. Alcohol consumption has health and social consequences via intoxication (drunkenness), alcohol dependence, and other biochemical effects of alcohol. In addition to chronic diseases that may affect drinkers after many years of heavy use, alcohol contributes to traumatic outcomes that kill or disable at a relatively young age, resulting in the loss of many years of life due to death or disability. There is increasing evidence that besides volume of alcohol, the pattern of the drinking is relevant for the health outcomes. Overall there is a causal relationship between alcohol consumption and more than 60 types of disease and injury. Alcohol is estimated to cause about 20–30% of oesophageal cancer, liver cancer, cirrhosis of the liver, homicide, epileptic seizures, and motor vehicle accidents worldwide (WHO, 2002). Alcohol causes 1.8 million deaths (3.2% of total) and a loss of 58.3 million (4% of total) of Disability-Adjusted Life Years (DALY) (WHO, 2002). Unintentional injuries alone account for about one third of the 1.8 million deaths, while neuro-psychiatric conditions account for close to 40% of the 58.3 million DALYs. The burden is not equally distributed among the countries. Alcohol consumption is the leading risk factor for disease burden in low mortality developing countries and the third largest risk factor in developed countries. In Europe alone, alcohol consumption was responsible for over 55 000 deaths among young people aged 15–29 years in 1999 (Rehm & Eschmann, 2002).Excerpt From 2004 WHO Report On Alcohol

  12. “The cost of alcohol to society does not outweigh the benefit to society, nor can / does it pay for itself through taxation” “In short, society would be better off without alcohol”

  13. Let’s Ban It Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.

  14. Let’s Tax It To Death! Russia: Sweet smell of excess16/06/2006 12:00Written by: Iain O'NeilThe Russian government is taking steps to cut the number of drink-related deaths in the country - by restricting the sale of perfume.Apparently Russian men have taken to buying cheap perfume as an alternative to drinking more expensive alcoholic spirits - like vodka.Perfume, brake fluid, de-icer and methylated spirits make up 20% of alcohol consumed in Russia and are a major factor in many of the 40,000 deaths a year from alcohol poisoning.Moscow cosmetics shop owner Nadezhda Ivanova told the Telegraph: "Just because my husband is fool enough to drink brake fluid, why should I be deprived of the pleasure of wearing Chanel?"

  15. A Serious Problem…….. Alcohol deaths prompt state of emergency in Siberia06 Dec 2006 16:35:00 GMTSource: ReutersMOSCOW, Dec 6 (Reuters) - Russia's eastern Siberian region of Irkutsk declared a state of emergency on Wednesday after 10 people died in a 24-hour period from alcohol poisoning, in some cases after drinking household cleaning products.The deaths were the latest in a wave of fatalities from alcohol poisoning to sweep Russia this winter.Alcohol-related illness is common in Russia, the world's biggest consumer of vodka, but the outbreaks of mass poisoning this year have been of an intensity not seen for years."In total 3,357 people have been diagnosed with toxic hepatitis of various degrees of severity (since mid-October)," he said, citing figures for the Irkutsk region.Some experts have blamed an unusually lethal strain of fake alcohol which has appeared on sale after changes in tax rules made legal drink more expensive.

  16. Not Just Russia…… India: Spurious liquor claims 23 lives in OrissaWednesday, March 22, 2006 (Ganjam ):Twenty three people in Ganjam district in Orissa and ten in the Icchapuram area in Andhra Pradesh have died after consuming spurious liquor over the last five days. According to reports the spurious liquor which was mix of methyl alcohol and urea fertilizer is consumed quite regularly by many people in Ganjam district.200 people had died in the Cuttack hooch tragedy of 1992 and since thenanother 100 people have died in similar tragedies in other districts. But the reports of the judicial probes on these tragedies have notresulted in any concrete action by the government. That also explains why the Opposition has described the announcement fora judicial probe into the Ganjam tragedy only an eyewash.

  17. On Other Continents Too…. In Paraguay 14 die after drinking doctored liquor02 Dec 2006 18:12:43 GMTSource: ReutersASUNCION, Paraguay, Dec 2 (Reuters) - Sugar-cane liquor tainted with methanol killed 14 people in a Paraguayan town, the country's health minister said on Saturday.Health Minister Oscar Martinez said laboratory tests confirmed the presence of the toxic chemical, often used industrially, in the hooch, which investigators suspect was sold on the black market. Nicaragua: Authorities hunt moonshiners as poison liquor toll hits 30 Source: CNN / Sep 9th 2006 LEON, Nicaragua (Reuters) -- Nicaraguan police stepped up moonshine raids Saturday, bursting into seedy bars and liquor stores selling an adulterated cane liquor that the government said has killed at least 30 people. Overnight, about 100 people were admitted to the already overflowing and rundown public hospital in Leon, about 55 miles northwest of the capital, Managua, and the center of the epidemic, raising fears of more deaths.

  18. But Also Closer To Home… • United Kingdom: Potentially fatal vodka on sale Source: BBCSept 12th, 2006Bottles of potentially fatal vodka have been discovered on sale in Lancashire, trading standards officers say. The "Kremlin" spirit contains illegal levels of methanol - 16 times higher than the recommended maximum. It was found in a shop in Burnley. Deemed unfit for human consumption, drinking the vodka in "moderate" amounts could cause blindness or even death, experts warn. Lancashire County Councillor Jean Battle, cabinet member for community planning and partnerships, said: "This problem has been highlighted thanks to the vigilance of a trading standards officer who saw the vodka on sale at an off-licence and was suspicious of its origins.

  19. And About To Get Worse? United Kingdom: Treasury haunted by spectre of fake spirits By: Vanessa Houlder, Financial Times Published: Dec 27, 2006 Criminal gangs are turning to counterfeit alcohol as it becomes harder to smuggle genuine bottles of spirits, according to the Treasury.The "emerging threat" of fake spirits is a sign that fraudsters are adopting new tactics to thwart the crackdown on the alcohol black market, it said.All but the smallest bottles of spirits will have to carry a pink oval duty stamp, unless the retailer has records to show that duty was paid before last October. The industry is concerned that counterfeiters will not only produce fake bottles of spirits but also attach fake duty stamps.Revenue & Customs, which has made several seizures of counterfeit spirits and packaging materials in recent months, fears that such a move could jeopardise the success of its drive against excise fraud. Criminals often recycle genuine bottles to make them appear genuine. Revenue & Customs reported steady progress on reducing levels of spirit fraud since 2000-01, when it was as high as 28 per cent, leading to revenue losses of £1.2bn. Its latest estimate was that the market share of illicit spirits was up to 8 per cent, leading to revenue losses of £300m in 2004-05.

  20. On The Other Hand…..Let’s Deregulate It…..(United Kingdom example)

  21. United Kingdom Deregulation • Shops and bars can sell alcohol 7 / 24 • Virtually any outlet can get a license • Available on every corner • Little to no enforcement of underage purchasing • Internet sales account for 10.0% of sales • Selling below cost is routine and large scale • Manufacturers and retailers not separated

  22. A Little Deregulation Unintended Consequences Atmosphere of Deregulation More Deregulation Complete Deregulation Knee-jerk Reaction Re-Regulation Higher Taxes Worse Than Present

  23. United Kingdom: Supermarkets under fire as child alcohol abuse surges By Sam Coates Source: The Times Supermarkets and off-licences have been identified as serial offenders, with 48 per cent of supermarkets found selling alcohol to under-18s in an undercover operation conducted before the licensing laws changed. The heads of Tesco and Sainsbury have been called to see Charles Clarke, the Home Secretary, to explain their approach to the problem.

  24. United Kingdom: Supermarkets under fire as child alcohol abuse surges By Sam Coates Source: The Times SHOPS that sell alcohol to young people will be targeted by the Government after a record number of children were admitted to hospital with drink-related problems, The Times has learnt. A 20-year restriction on sting operations is being lifted to help to catch retailers selling alcohol to under-18s after the introduction of round-the-clock opening.

  25. United Kingdom: Alcohol deaths soaring, new figures show Saturday July 1, 2006 The Guardian A sharp increase in the number of people drinking themselves to death in England was revealed in official figures yesterday. The Salvation Army said: "We are not surprised, as alcohol has never been more easily available in the UK."The government's failure to adequately address binge drinking, and the ill-thought-through 24-hour licensing policy, will do nothing to help the situation."

  26. United Kingdom: Police chief blames drinks industry for Binge Britain by selling alcohol 'cheaper than water‘ Source: Daily Mail Feb 14th, 2008 A police chief lashed out at the drinks industry last night for selling beer 'cheaper than water' and leaving hospitals to pick up the bill in injuries and bloodshed. Danger: Supermarkets stocking up cheap booze have fuelled street violence, anti-crime campaigners say "Why is it we have got huge entertainment and drinks companies marketing alcohol to children?" In the past supermarkets stocked a handful of drinks targeted at youngsters, but "now we have gondolas of them", he said - the term used to describe large display units. He accused parts of the drinks industry of not taking the problems seriously, adding: "We can't allow them to continue to export their negative costs on to the streets, hospitals and into the criminal justice system. It's got to stop." Supermarkets are targeting children with cheap booze, according to claims. Last week the Home Office announced a review of supermarket and off-licence drink sales, with ministers threatening legislation to outlaw ' lossleader' sales at below cost price unless shops heed the warnings and fall into line.

  27. The Most Recent Headlines • United Kingdom: Irresponsible alcohol packaging to be identified • United Kingdom: 'Government to unleash alcohol hit squads to cut booze abuse‘ • Metal detectors will be installed at the entrances to pubs and clubs in a bid to clamp down on knife and gun violence • Clubs switch exclusively to plastic cups • United Kingdom: Call for alcohol ban in supermarkets • United Kingdom: Ban sale of cheap alcohol, Tesco urges Brown • Increase taxes, so on and so on……

  28. A Little Deregulation Unintended Consequences Atmosphere of Deregulation More Deregulation Complete Deregulation Knee-jerk Reaction Re-Regulation Higher Taxes Worse Than Present

  29. What Might One Conclude?

  30. What Might One Conclude? • We are not in the milk or chips business • Banning it does not work • Over taxing it does not work • Lack of access does not work • Deregulating it does not work • Under taxing it is not smart • Easy access is not the answer • Tight control over the supply chain is important • Regulation – legal and structural – is important; makes a difference • Changes in regulations has an impact on alcohol / society and the quality of our lives! • Appropriate regulation and market structure is a very difficult business, “it just ain’t easy” • Expedient, knee jerk politically driven solutions won’t work • Need to seek out and maintain a balance

  31. So, In The United States, Where Are We Today? More Importantly Where Are We Headed?

  32. Regulatory & Structural Trends • Erosion of the three tier system • Direct Shipping • Retailers shipping across state lines • International internet retailing • eBay • Micro distilleries • Availability • Chain power ON & OFF • Sunday sales • Wet votes • Advertising proliferation • My Space / You Tube • Enforcement capabilities • Illegal importation • Refilling and counterfeiting • Gang activity • Rising tide of health claims • Nutritional labeling • Ingredient labeling • Healthy “alcohol” products • “Edgy” products • Lowering of the drinking age • Global pricing • Costco ruling • Dry votes • Product bans • Advertising bans • DUI enforcement • Ignition interlocks • Allergen labeling • Ingredient labeling • State based labeling requirements • Local labeling initiatives • State taxation increases • Local tax initiatives • Smoking bans • Restaurants - menu calories • WHO • Health Advocates • Attorneys General • Governor spouses • Merging ABCs with DEAs

  33. Direct Shipping • Texas' "Bizzaro" Landmark DecisionJanuary 16, 2008Source: Beer Business DailyA fascinating Federal District Court decision handed down by the United States District Court for the Northern District of Texas (in Dallas) on Monday by Judge Sidney Fitzwater (Quick bio: 55 years old, a graduate of Texas Baylor Law [in a dry county] appointed by Reagan in 1986), is considered so bizarre that it has been declared by both wholesalers and out-of-state retailer direct shippers as a great victory. Most importantly, this case was the first that applies the Granholm case to interstate retailers (as opposed to wineries), and was perhaps the most methodically thought out decision for any federal Judge, though perhaps with a gaping hole (more on that later). And it was a mixed decision, to be sure. Does direct shipping, shipping across state lines, increasing access and availability of alcohol and the erosion of the three tier system expose our society to new perils and dangers from alcohol?

  34. International Internet Retailers Does the specter of offshore retailing who do not pay US tax nor comply with US regulation pose a health threat? Unfair competition? Provide youth access?

  35. EBay Retailing Does the arrival of professional, organized retailing on eBay deprive states of tax revenue? Constitute a new threat to underage consumption? Amazon.com?

  36. Counterfeiting United Kingdom: Fake vodka could blind youSource: Watford ObserverJan 30th, 2008 Trading Standards chiefs in Hertfordshire are warning residents to be wary of buying counterfeit Glen's Vodka which could cause blindness.Cheap "knock-off" 70cl bottles of the spirit, which has not been through the company's strict distilling process, has been found at five locations in neighbouring Buckinghamshire.It has sparked a national investigation. As regulations affecting the structure of the market change, loosening controls on the supply chain. What impact will all this have on the safety and security enjoyed today?

  37. Enforcement Capability WINE AND SPIRITS TRADE GROUP URGES IOWA ACTION IN UNDERAGE ALCOHOL SHIPPING CASESource: WSWAMarch 23rd, 2007Washington, D.C. (March 23, 2007)-The Wine and Spirits Wholesalers of America, Inc. (WSWA) today requested that the Iowa Alcoholic Beverages Division investigate and take enforcement action against an online retailer who shipped alcohol illegally into Iowa recently.A UPS spokesman was quoted in the article saying that the giant carrier was not a "police" agency. "We don't expect to be, and we don't want to be." He further claimed that UPS was not responsible for enforcing the law. READ: I want the profits but the not the responsibility."It is hard to understand how UPS can be entrusted to deliver alcohol in Iowa-or anywhere else for that matter-when it disavows any legal responsibility to ensure its deliveries are in compliance with the law," Wolf said. "We hope the Iowa ABC looks into the conduct of UPS in this case as well." As a practical matter, what enforcement capability do we really have? If none, why have the regulations? New Hampshire thinks differently?

  38. Supreme Court Agrees! WSWA: SUPREME COURT REJECTION OF CARRIER AGE VERIFICATION CALLS INTO QUESTION STATE DIRECT SHIPPING LAWS Source: WSWA Feb 21st Washington, D.C. (February 21, 2008)-The Wine & Spirits Wholesalers of America (WSWA) urged states to conduct a careful and broad re-evaluation of direct shipping regulations in the wake of a troubling Supreme Court decision handed down Wednesday. In unanimously striking down a Maine law regarding the direct shipment of tobacco products to consumers, the Supreme Court found that the state cannot legally compel carriers to verify that recipients of packages containing tobacco are of legal age. The case was closely watched by the beverage alcohol community because of the potential ramifications for unregulated home delivery of alcohol, a product which also carries a minimum age requirement for purchase. As a practical matter, what enforcement capability do we really have? If none, why have the regulations?

  39. Micro Distilleries Washington: Distillers may get lift from the state By Andrew Garber Jan 21stSeattle Times Olympia bureau OLYMPIA - Don Poffenroth can show you how he makes whiskey from Washington-grown grains at his new Dry Fly distillery in Spokane. But he can't sell you a bottle or even offer a nip.Customers who want a taste have to walk to a pub next door to buy a drink. If they want to purchase a bottle, Poffenroth says, he has to "draw them a map to a liquor store."The reason: Only state liquor stores can sell bottles of booze, a holdover from the end of Prohibition in 1933. But that's likely to change soon. Do micro distilleries open the door to more and yet larger manufacturers selling direct to consumers? What defines a “distillery’? Do they threaten the Control State System?

  40. Chain Power ON / OFF How stores pile alcohol high and sell it cheap Last updated at 00:52am on 15th February 2008 Supermarkets are selling alcohol at a loss to pull in customers. They are offering shoppers savings worth millions, particularly around the time of sporting events and national holidays. Evidence supplied to a Competition Commission inquiry suggests the big four - Tesco, Asda, Sainsbury's and Morrisons - sold an estimated £100 million worth of beer, wines and spirits below cost at the time of the World Cup in 2006. Recent promotions of cheap lager and cider have brought down the cost of alcohol to below the prices charged for some bottled water. What threat do very large and powerful retailers pose to society as it relates to alcohol? Should their economic interest in alcohol sales be constrained?

  41. Chain Power ON / OFF DUI suit settled for $21 million. Man in crash that killed 3 drank at T.G.I. Friday's By GREGORY A. HALL The Courier-Journal BY SAM UPSHAW JR., THE COURIER-JOURNALThe company that owns the T.G.I. Friday's restaurant that served alcohol to a Prospect, Ky man before he drove his truck into a car carrying two 16-year-old sweethearts — killing all three — has paid $21 million to settle a lawsuit filed by the teens' parents. Direct quote from ON Premise Chain Operator: “I do not understand why my buyers cannot receive gifts from alcohol vendors like they get from food vendors” Can large chain ON premise operators be relied upon to promote alcohol responsibly? How long before they want to buy direct? What impact will that have on drinks prices?

  42. Global Pricing • Sovereign and state trade rules and regulations are eliminated • Chains grow into international and global groups • Prices are compared across countries Tesco Takes On US Shoppers The company hopes to keep prices low by selling big volumes of those few chosen items and relying on trusted suppliers, some of which it brought from Britain to the U.S. What will the convergence of these trends mean for alcohol prices? Are prices likely to go up or go down? In turn, how will this impact alcohol consumption in the US?

  43. Advertising • Cable companies are becoming increasingly lenient with spirits advertising… Radio Stations Accepting Spirits Ads Cable Markets Accepting Spirits Ads Local TV Accepting Spirits Ads What is the long term impact of this trend?

  44. Social Media(You Tube / My Space) What impact do new trends like You Tube, Face Book, My Space have on the role of alcohol in society?

  45. Gang Activity Mesa 'party crew' arrested for hosting underage drinking Reported by: EastValleyTribune.com Last Update: 1/27 9:23 pm “Police! Get down on the ground!” officers yell as they race to the front of the restaurant.Typically made up of gang members or their friends, party crews are highly organized groups of older teens who throw large parties, where for $3 to $10, underage kids come in and drink. Their proceeds often fund more parties, announced over cell phone text messages or in some cases, on MySpace.com, an Internet “social” site popular with teens.But it isn’t just the underage drinking that worries police — it’s the violence that often comes with it. What is driving this? Increasingly liberal or conservative attitudes to alcohol? Increasing pressure on youth? Drinking age? Society in general?

  46. Nutritional Labeling Labels on Alcoholic Drinks Should Include Calories, Ingredients & Alcohol Content • In 2003, CSPI, the National Consumer League, and others called on TTB to develop an easy-to-read, standardized Alcohol Facts label, similar to the popular Nutrition Facts labels on packaged foods. In 2007, TTB responded by proposing a “Serving Facts” label which would include calories, fat, carbs, and protein, but which would let manufacturers disclose alcohol content elsewhere, and presumably in much smaller print, on the label. The TTB proposal also would not require disclosure of ingredients, nor would it require a statement communicating the government’s advice on moderate drinking. • In fact, one of the TTB’s proposed Serving Facts label is eerily similar to a 2005 Diageo advertisement in USA Today for Seagram’s 7 whiskey, neatly illustrating the industry’s influence over the bureau, says CSPI. What message will this send to society about alcohol? What type of new products will this give rise to? What long term impact on consumption will this have?

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