Jim Goldberg / Magnum Photos

The Failures of Alcohol Regulation

David Jernigan

December 13, 2023

Increasing product availability comes with real costs.

Increasing product availability comes with real costs.

The United States has an alcohol problem. On average, from 2015 to 2019, the nation lost 140,000 lives per year to alcohol. Despite growing legalization of cannabis, alcohol continues as the No. 1 drug among high school students. Prior to the COVID-19 pandemic, alcohol was annually killing close to 4,000 persons under 21. And during the pandemic, the problem got worse: Indications are that people drank more, and the death toll became even greater.

Many people think of just two harms when it comes to alcohol: addiction and drunk driving. But the latter causes fewer than 10% of alcohol deaths among adults; poisonings, liver disease and alcohol-attributable heart disease and stroke kill far more people. The last available estimate of the former, or severe alcohol use disorder, dates from 2009 to 2011, when just 3.5% of the population qualified for that diagnosis.

In contrast, 21.7% of the population age 12 and above, or 61.2 million people, say they binged on alcohol in the past 30 days. According to the CDC, binge drinking — consuming four or more drinks for women or five or more drinks for men within two hours — is the most common and costly form of alcohol consumption. It is responsible for 77% of the costs and associated with a wide range of health problems, including violence, sexually transmitted diseases and unintended pregnancies, as well as memory and learning problems. The CDC estimates that about 90% of binge drinkers do not meet clinical diagnostic criteria for severe alcohol use disorder, which means they are unlikely ever to seek or receive treatment.

At the national level, with less than half the population 12 and above having consumed alcohol in the past 30 days, these costs clearly fall disproportionately on nondrinkers and include consequences such as more serious injury from intimate partner violence, hit-and-run pedestrian deaths, threats or harassment and family or financial harms

What does this look like at the city level? Estimates of the total health and safety burden of alcohol for individual metropolitan areas are rare. In what we believe is the only published U.S. city-level estimate, in 2013, my colleagues and I used standard cost-of-illness methods to add up the costs of alcohol to the city of Baltimore. There were a total of 276 alcohol-attributable deaths there in that year, and we pegged the total cost of alcohol use to the city at $582.3 million. 

More than 61 million people say they binged on alcohol in the past 30 days.

The bulk of this was productivity losses — to the drinker, persons other than the drinker, and city government itself. Other major categories included health care, criminal justice, property damage and motor vehicle crash costs.

Alcohol damages productivity through at least two key mechanisms. First, over the long term, it tends to kill and disable people earlier in life than other very common substances like tobacco. The CDC estimates it causes the deaths of one in eight persons of working age. 

In the short term, alcohol use hurts productivity through phenomena such as “presenteeism,” in which workers get less done because they are recovering from drinking the night before. A 2006 study based on a randomized national sample of employed adults in the U.S. found that on an average workday, 1.7% of workers are under the direct influence of alcohol, and 9.2% are affected by a hangover. 

What to do?

The good news is that there are well-researched ways to reduce the problem. The World Health Organization has identified three “best buys” — the policies most effective and cost-effective in reducing alcohol-related harm: raising the price of alcohol, usually through tax increases; banning advertising and marketing as much as possible; and restricting how available alcohol is by limiting the number of places people can purchase or consume it and reducing the days and hours of sale.

In contrast, the alcohol industry has successfully held tax increases at bay, to the extent that state beer, wine and spirits taxes actually fell by 66%, 71% and 70% from their inception in 1933 to 2018, and the Trump administration’s alcohol tax cut, made permanent by Congress in 2020, reduced federal taxes by another 16%. Prior to Prohibition, alcohol taxes accounted for 30% or more of the federal budget; today they provide less than two-tenths of a percent

In New York State, alcohol excise tax revenues made up roughly one-eighth of one percent (0.126%) of the total budget in fiscal year 2022-23. New York City’s Independent Budget Office says that the value of the tax here, which is especially light on wine and far lower than in neighboring New Jersey and Connecticut, has “eroded in real terms over the last 30 years.” 

In advertising, alcohol companies spend billions per year, and are apparently doing so even more efficiently as they take advantage of the algorithms of digital and social media to target their messages to their best customers. For a half-century, they were shy about marketing hard liquor on TV. No more.

New York Gov. Kathy Hochul recently signed into law a package of measures to 'improve' the state’s alcoholic beverage laws. There appears to have been no public health input into these changes.

Regarding the final “best buy,” control of availability, trends appear to be going upward: Massachusetts, for example, increased the number of licenses to sell alcohol by 63% from 2011 to 2019. The pandemic brought even more increases in alcohol availability, as most states termed alcohol sales “essential” and permitted more home delivery, carryout cocktails and the spread of bars and restaurants into adjacent sidewalks and parking lots.

The likely public health effects of these changes have been largely absent from this policy conversation. New York State is typical: Gov. Kathy Hochul recently signed into law a package of measures to “improve” the state’s alcoholic beverage laws. Provisions included an expansion of hours and days of sale of alcohol.

This is troubling. The CDC-sponsored Task Force on Community Preventive Services reviewed the research literature behind hours and days of sale, and concluded that any increase of two hours or more would have a predictable and significant impact on health and safety. Yet there appears to have been no public health input into New York’s changes, framed entirely as good for business and consumers.

To know how substantial these potential health harms may be, one would have to begin with good baseline data on the cost of alcohol to the state of New York. The CDC has an estimate for the state, but the last time it was updated was based on 2010 data. 

At that time, alcohol problems were estimated to cost the state $16.3 billion per year. Simply using the Bureau of Labor Statistics’ inflation calculator to adjust for inflation, that amount would have been $22.86 billion in 2023. The CDC estimates deaths attributable to alcohol use every five years. On average, from 2015-2019, that put annual deaths in New York State from alcohol at 6,701, with the largest categories of mortality being poisonings, hypertension, and alcoholic liver disease.

Following the passage of those alcohol law liberalizations she championed, Hochul claimed that the state’s “breweries, distilleries and other alcoholic beverage businesses are creating jobs and expanding economic opportunity.” There was no mention of the additional costs this expansion will levy on the state and people of New York. 

Alcohol tax revenues are now far from covering the product’s costs. New York State collected $277.5 million in alcohol excise taxes in 2022, or roughly $14.10 per person. In contrast, the CDC estimated alcohol cost the state $843 per capita in 2010, of which governments paid out $358 per person.

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The United States now has three legal drug industries. The tobacco industry has been strongly curtailed, particularly through higher taxes and limits on advertising. The alcohol industry, with 283 reported lobbyists and $29 million in lobbying expenditures at the federal level alone, has the regulatory world it wants: few limits on advertising, low taxes and increasing product availability. 

The third legal drug industry is cannabis. This industry is growing rapidly, and has attracted significant investments from both tobacco and alcohol producers. If policymakers have failed to bring the lessons from tobacco control into alcohol policy, they are arguably doing even worse with applying lessons from both tobacco and alcohol to the burgeoning legal cannabis marketplace, as a recent report from the de Beaumont Foundation has documented.

One possible reason for this failure regarding alcohol lies in the structure of consumption. In the U.S., those with the highest incomes and non-Hispanic whites consume more drinks annually than any other group. This group, and especially white males, also dominates U.S. policymaking, making alcohol the drug of choice of many of the people who write the laws in the U.S. 

Another reason lies in alcohol’s status as a frequent contributing cause of bad health outcomes. While the connection between tobacco use and harms is often clear, we still don’t routinely think about alcohol as playing a significant role in non-alcohol poisonings, homicide, suicide, drownings, falls and hypothermia — all conditions for which CDC attributes anywhere from 29% to 47% of deaths to alcohol use.

We all pay, literally and in human terms, for the failure of our governments to use the very tools that have been so effective in tobacco to keep alcohol use in check. Yes, the U.S. has an alcohol problem, and it has an alcohol policy problem that is apparently getting worse, not better.