Retail Alcohol Monopolies: Future of Alcohol Monopolies and Regulation

The Future of Alcohol Monopolies and Regulation

Alcohol monopolies are likely to face continued pressure from economic interests. An emerging example involves concessions being contemplated by the World Trade Organization (WTO) to reduce or eliminate the regulation of domestic alcohol retail and distribution markets (Grieshaber-Otto & Schacter, 2002).  Governments should, however, have an interest in preserving and even strengthening existing alcohol monopolies because they are uniquely positioned to prevent alcohol problems, provide customer service in a responsible way, and maintain tax revenue. Through regulation, controlling availability, establishing minimum prices and refusing to serve minors and intoxicated persons, monopolies are able to address public health concerns, while still providing alcohol in a way that is convenient to consumers.

The evidence is clear that, other factors being equal, increasing alcohol availability and accessibility will increase alcohol consumption, which in turn will increase alcohol-related morbidity and mortality, as well as alcohol-related social problems (e.g., Edwards et al., 1994; Norström, 2001; Babor et al., 2003).  These relationships provide a sound scientific basis from which to propose and evaluate potential policy initiatives, including those that affect the sale and distribution of alcohol.

Because alcohol monopolies have a mandate to control the sale and distribution of alcohol, they offer an effective means for controlling accessibility for health purposes while providing customer service. However, alcohol monopolies may be losing sight of some aspects of their public health function and instead may be primarily oriented to generating revenue for governments or as protectors of the interests of the alcohol producers (e.g., Becker, 1983; Sloan et al., 2000). Recent developments in alcohol promotion in Ontario would also suggest that commercial and market interests have outweighed public health and safety interests in influencing the decisions of regulatory agencies.

The evidence summarized above supports the position that retail alcohol monopolies with a strong regulation mandate are an important mechanism for the control of alcohol problems in society. The evidence also indicates that relinquishing those controls will lead to increases in alcohol-related morbidity, mortality, and social problems.  Thus, alcohol monopolies provide an effective means to reduce alcohol problems in society and must be maintained.  However, if their mandates of controlling consumption and reducing drinking-related risk and harm are eroded, the justification for a monopoly system is similarly eroded (Romanus, 1992). While modernization is occurring in monopolies, it is especially important for them to focus on an essential aspects of their function: reducing drinking-related harm through control of per capita consumption rates and promoting other alcohol policy measures that will reduce risks and harm associated with alcohol consumption.

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