Alcohol Regulation: “Striking The Right Balance”

Alcohol Regulation: “Striking The Right Balance” Friday, January 5th, 2007 Sanibel, Florida

OutcomeWhen This Panel Discussion Is Over……… • Reviewed and discussed “alcohol, society & regulation” - trends from around the world • Focused particularly on the erosion of the state’s rights to regulate alcohol • Discussed what role “structure” (i.e. 3 tier) plays in the regulatory scheme, if any • Debated what should be done in reaction to the trends? Anything? Nothing?

Format • 90m = Total Session • 15m = “Teeing Up” The Issue • 45m = Panelist Presentations • 15m = Moderator Questions • 15m = Audience Questions

Panelists • In true Sgueo-esque style and a feeble attempt to disorient the moderator we have managed to assemble a panel of “Three Peter’s”- Peter Anderson- Peter Cressy- Peter Lake

Panelists • In true Sgueo-esque style and a feeble attempt to disorient the moderator we have managed to assemble a panel of “Three Peter’s”- Dr. Anderson- Dr. Cressy- Professor Lake

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.

Dr. Peter Cressy • Dr. Peter H. Cressy joined the Distilled Spirits Council as President and Chief Executive Officer in September 1999. A distinguished educator and retired U.S. Navy Rear Admiral, Dr. Cressy has an impressive history of leadership positions. • He came to the Distilled Spirits Council following six years as Chancellor of the University of Massachusetts Dartmouth. • Dr. Cressy's academic career also included two years as President of the Massachusetts Maritime Academy as well as numerous teaching assignments. • His 28 year naval career included key appointments at the State Department, House of Representatives, the Pentagon and several commanding officer positions. His operational assignments included duties in Alaska, Japan, Iceland, Italy, the Mediterranean and shipboard duty off the coast of Vietnam during the evacuation of Saigon and the Mayaguez Rescue. • He concluded his career as Commander, Fleet Air Mediterranean and Commander, NATO Air Mediterranean during Desert Storm. • A 1963 graduate of Yale University, he has a Master's Degree in International Affairs from George Washington University, an MBA from the University of Rhode Island, and a Doctorate in Education from the University of San Francisco. He also graduated with distinction from the Naval War College.

Professor Peter Lake • Peter F. Lake is the Charles A. Dana Chair and Director of the Center for Higher Education Law and Policy at Stetson University College of Law. He teaches and writes in the areas of Torts, Higher Education Law and Policy, Insurance, and Jurisprudence • He co-authored The Rights and Responsibilities of the Modern University (Carolina Academic Press 1999), and has authored numerous law review articles and other publications. • Professor Lake is a highly sought after speaker and futurist, particularly in the field of higher education law and policy, where he has served as a presenter or keynote speaker presenter at more than 100 national and regional meetings. • In recognition of his work, Professor Lake has been appointed to several boards, including the board of editors of the Journal of College and University Law, and the Center for Academic Integrity. • Professor Lake joined Stetson's faculty in 1990. • After graduating from law school, Professor Lake was a law clerk for the Honorable Bruce Selya and then for the Honorable Neil Lynch, Associate Justice of the Massachusetts Supreme Judicial Court. • Before joining Stetson, Professor Lake was a litigation associate with the law firm of Cahill, Gordon & Reindel in New York City, where he was involved in a variety of commercial litigation and First Amendment matters.

Teeing Up The Issue

On The One Hand…..

We Know This Does Not Work 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.

And So To…….. Section 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed. Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use there in of intoxicating liquors, in violation of the laws thereof, is hereby prohibited. Section 3. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by conventions in the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

73 Years Later

8 Year Trend: Annual Bev AL Servings purchases are flat Source: ACNielsen Homescan

Percentage of US Households purchasing Beverage Alcohol is declining Source: ACNielsen Homescan

If it weren’t for Population growth . . . Source: ACNielsen Homescan

Not Perfect But certainly effective enough for us to be very cautious about changing it!

Rules, regulations and laws are intertwined, forming complex relationshipsPulling the wrong one out at the wrong moment can cause disaster to strikeYou had better know what you are doing before you start messing with the sticks! Punch Lines

We Were Not Alone! • Canada • Britain • Nordic Countries • Russia & Soviet Union • Middle East, North Africa, Central Asia • South AsiaAll have / have had various forms of prohibition or severe restrictions

We Also Know That……Misplaced Policy and Regulation Still Cause Issues Today

Overprice / Overtax It……. 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?"

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.

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.

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.

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.

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.

However! We also know…..

It Ain’t Milk 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

United Kingdom: Forecourt (Gas Stations) drinks sales increase in importance Source: Checkout The growing importance of forecourt retailing to the drinks trade is reflected in the latest initiative on wine in 215 Total UK company-owned forecourt sites in a joint venture with Ernest and Julio Gallo Wine is taking a more prominent role in forecourt stores

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.

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.

Scottish girls among most violent in the world Camillo Fracassini Source: London Sunday Times SCOTTISH girls have been revealed as among the most violent in the world. A new study shows that almost one in three 11- to 15-year-olds was involved in at least one physical fight in the previous year. Only girls from England, Belgium, Lithuania, Estonia and Hungary admitted to being more violent, in the study of 35 developed countries. Rising alcohol and drug use has been blamed on a surge in violent crime

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."

S&N UK slams cheap supermarket booze 31 July, 2006 By Hamish Champ Major players using low-cost beer to drive custom Brewer Scottish & Newcastle UK (S&N UK) has slammed Britain’s supermarket chains for selling its beers on the cheap. In a submission to the Competition Commission, which is looking into claims that the big grocery retailers are squeezing out smaller, independent players, S&N UK said it “viewed with concern the willingness of the major multiples to invest in relatively cheap beer and cider prices to drive ‘footfall’ within this sector”. The group said the sale of alcoholic drinks at low cost – even below cost – was not consistent with the promotion of responsible drinking. “There is now firm anecdotal evidence that drinkers are consuming cheap alcohol at home prior to crossing (Pre gaming) over into the on-trade for a night out and then topping up at pubs and bars,” S&NUK’s submission went on. “Furthermore, with the advent of public place smoking bans now in Scotland and due in England, Wales and Northern Ireland, we expect the demand for this kind of consumption to increase.” The emphasis on low price to drive customers into the store “was an unwelcome feature of the grocery market”, it concluded. Sainsbury’s and Tesco were unavailable for comment.

United Kingdom: Curb on teenage drinkers and smokers Source: Daily Telegraph / (Filed: 14/09/2006) Drastic action to stop the spread of heavy drinking and smoking among young people - including a ban on advertising alcohol on television - is recommended by Government advisers today. Half of British children drink at least once a week. "Of all the drugs, alcohol has shown the most recent growth in uses and causes the most problems among young people today," it adds."It is also the least regulated and the most heavily marketed. The group calls for a progressive increase in the excise duty on alcohol to try to price it out of the range of young people and a ban on television adverts for alcohol and restrictions on cinema advertising to the under-18s. There would also be a reduction in the maximum legal drink-drive limit for drivers under 25 from 80 to 50 mgs of alcohol per 100mls of blood and a prohibition on the sponsorship by drinks companies of sports and music events attended and watched by under-18s. "Of all the psychoactive drug producers, the alcohol industry is at present uniquely able to market its products with all the creativity and resources it can muster," says the report. A Government spokesman said it was "determined" to reduce the harm caused to young people by tobacco, alcohol and illegal drugs but there was no rush to endorse any of the recommendations.

United Kingdom: Police back call for alcohol tax Source: BBC / Oct 27thPolice chiefs have backed calls by Health Secretary Patricia Hewitt to increase tax on alcohol in an effort to address binge drinking by young people. The Association of Chief Police Officers (ACPO) suggested the revenue raised could tackle problems associated with excessive drinking. Ms Hewitt had urged Chancellor Gordon Brown to "really increase" taxes on drinks such as alcopops. Ms Hewitt said: "We've got enormous numbers of young people, particularly on a Friday and Saturday night, ending up in the casualty department of hospitals because they're drunk." Liberal Democrat health spokesman Steve Webb said Ms Hewitt's proposal was a sign she had accepted defeat in tackling binge drinking. "This is a veiled admission of failure from a minister who has failed miserably to tackle the problem of alcohol abuse." About 23% of men and 9% of women binge drink in the UK UK death rates due to binge drinking have doubled in the last 20 years

United Kingdom: Grogan: let us fight supermarket booze prices02/11/2006 08:11 / Written by: Tony HalsteadAll-Party Parliamentary Beer Group chairman John Grogan has called on more brewers and pub companies to join the fight against rock-bottom supermarket beer prices.Grogan believes the big chains are finally on the defensive as criticism of their "loss-leader" discount policies grows.His comments follow Scottish & Newcastle's recent highlighting of store prices which sees a unit-alcohol price of 30 pence in supermarkets compared to an average pub rate of £1.02.Grogan believes the four big players Tesco, Asda, Sainsbury's and Morrisons are already sweating it out in fear of the current Competition Commission inquiry.For the first time, brewers and have joined pub companies, farmers, small shops and environmentalists in making critical submissions to the Commission"They are united in the complaint that supermarkets are abusing their power at some social and economic cost."He compared supermarket beer promotions to the notorious £10 nightclub entry "drink-for-free" deals."But while on-trade operators have signed up to a robust code outlawing irresponsible promotion, the latter (supermarkets) refuse to confront the issue," he said. "The big stores are effectively showing two fingers to the whole concept of responsible retailing," he said.

Supermarket booze fight gathers pace 24/12/2006 10:32 Morning Advertiser As supermarket tills ring to the tune of Christmas shopping more MPs are adding their support to a call for an end to irresponsible drinks promotions in the off-trade. John Grogan, MP for Selby and chairman of the All-Party Parliamentary Beer Group tabled an early day motion last week which has now got the support of 41 members of Parliament. Grogan’s submission reads: “That this House believes that the substantial price differential between alcohol sold in pubs and that sold in the off-trade is exacerbating the problem of binge drinking; continues to support the pub trade's efforts to curb irresponsible drinking and promotions; and urges supermarkets and off-licences to follow the example of pubs and act to end irresponsible drinks promotions and agree not to use alcohol as a loss leader on their premises.”

Glass half full or half empty?By Andrew BoundsPublished: October 27 2006 12:17 | Last updated: October 27 2006 12:17This week's paper on how Europe can reduce the harm caused by binge drinking was one of the most fiercely resisted of the year in Brussels. Drinks companies lobbied furiously after research commissioned by the European Commission proposed measures such as a ban on advertising and tobacco-style warning labels. There was a chorus of approval from the industry when the much watered-down document was released. Health campaigners were not crying into their cups, however. "We are disappointed. It has the pawprints of industry all over it," said Andrew McNeill of Eurocare, the alcohol health campaign group. "Having said that, at least there is a strategy at European level. If it doesn't work then there will obviously be a review and a need for further action. We know it won't work because we know what does work."Expect the clash of glasses to be heard again before too long.

Alcohol becomes leading killer of Finns The Associated Press / Friday, December 8, 2006 Alcohol has become Finland's leading killer of adult men and women, as consumption reached an all-time high last year, officials said Friday.Last year, Finns drank the equivalent of 55.2 million liters (14.5 million gallons) of pure alcohol - an increase of 2.5 percent on 2004, but 14 percent higher than in 2003 just before alcohol taxes were slashed.The government has traditionally kept a tight control on alcohol consumption with high prices in its Alko monopoly retail outlets, and supermarkets do not sell beer with higher alcohol content.However, in March 2004, it slashed alcohol taxes by more than 40 percent to discourage growing "booze cruises" to Russia and neighboring Estonia, where alcohol is much cheaper.The move caused an outcry from health officials who warned of the negative health effects, and police who reported a growth in public drunkenness and anti-social behavior.Officials reported a 10-percent growth in binge drinking among 17-year-olds in the first six months after the tax cut, and general consumption began to grow, reaching new records.

United Kingdom: 7 out of 10 would back new laws to tackle alcohol abuse ALISON HARDIE AND LYNDSAY MOSS The Scotsman Jan 2nd Survey reveals 71% are for measures to restrict alcohol availability. Executive admits alcohol is next public-health battleground Scotland's relationship with alcohol is seen as 'out of balance' Key quote: The mood of the general population has changed and I think there is a general realisation that our relationship with alcohol is out of balance. - TOM WOOD, ACTION ON ALCOHOL AND DRUGS Story in full: NEARLY three-quarters of Scots would welcome the introduction of new laws to tackle the nation's problematic relationship with alcohol, according to a poll. An exclusive survey for The Scotsman has found that following the success of the smoking ban, voters are now ready for politicians to take more radical measures to tackle the alcohol abuse and binge drinking that costs the country more than £1 billion a year. The Executive has already said that alcohol will be the new public-health battleground, but MPs and MSPs have traditionally shied away from taking tough action, fearing a backlash from voters and business.

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

Meanwhile Back At Home!

What Are We Debating?(The Forest) A complete change in the way alcoholic beverages are regulated, taxed, distributed and sold in the United States

The 3 tier system Complete de-regulation Complete re-regulation Channels of distribution Direct shipping The internet Taxation Liability laws Advertising Sunday sales Consolidation Globalization Shelf space Product range Credit card fees Roving DUI patrols Legislative “initiatives” Judicial disregard Global warming Energy crisis Balance of power Dram shop Wal*Mart Macro level social issues; i.e. health, binge drinking Underage drinking Drinking age DUI Ignition Interlocks Nutritional labeling Smoking bans Emerging issues What Are We Debating?(The Trees)

200 Sovereign Governments Government agencies World Health Organization World Trade Organization European Union Judiciary Enforcement agencies Federal Trade Commission Fed. Communication Comm. Anti-Alcohol lobby Religious groups Special interest groups Legislators State agencies Taxing authorities Legal profession Educators Health community Trade associations DISCUS NABCA Suppliers Municipalities Manufacturers Brand Owners Wholesalers Retailers Consumers Who Thinks They Should Have The Power“The Players” Who Is Friend? Who Is Foe?

DUI

DOT Releases 2005 State-by-State Data on Alcohol-Related Traffic Fatalities; Statistics Underscore Drunk Driving is Deadliest of Crimes – 12,945 2006/12/22 16:50:00 / Source: Layover.com U.S. Secretary of Transportation Mary E. Peters today released new state-by-state data for 2005 showing that alcohol-impaired driving remains one of the nation's deadliest crimes. Last year, 23 states and Puerto Rico showed a decrease in the fatality rate for crashes where the driver had an illegal alcohol level of at least .08, while the rate in 21 states and the District of Columbia increased and in 6 other states it remained flat. "As a wife, a mother, and a grandmother, I never want to receive a call saying that a loved one will not be coming home because of a crash, especially one caused by alcohol," remarked Peters. "This coordinated air and ground campaign is helping prevent our officers from having to make that dreaded phone call." "Statistics are a vital tool in our battle against drunk driving," said Peters. "But, we must remember that there is a human face behind every one of those numbers - a mother, an uncle, a brother or best friend that lost their lives because someone made a lethal decision. This holiday season, every one should picture their loved ones if they are planning to party. It will help you make responsible decisions."

Alcohol Regulation: “Striking The Right Balance”