The Case Against Privatization

Robert Solomon (Faculty of Law, University of Western Ontario)

INTRODUCTION:

Lest you all write me off as a cynical, jaded neoprohibitionist, let me assure you that I am not opposed to privatizing alcohol sales. I do not care if alcohol is sold in government or private outlets, because I do not think that this will necessarily increase alcohol-related harms in Ontario. The important issue is not who sells the alcohol, but rather the number of outlets, alcohol prices, how the alcohol is sold, and how rigorously the law is enforced.

The privatization debate has taken on an ideological baggage that masks far more important alcohol policy issues, namely the continued proliferation of outlets and the deregulation of alcohol. In my view, these forces will create a marketplace in which there will be very strong economic incentives to discount the price of alcohol, and sell to underage and intoxicated customers. Unless enforcement resources increase dramatically which is most unlikely, it will be impossible to adequately screen applicants, let alone enforce the existing alcohol law. Those in the trade will argue that lower alcohol taxes, longer hours, more trading days, and less regulatory controls are essential to their economic viability. The competition for alcohol sales will result in young people being bombarded with even more alcohol advertising, promotions and sponsorships than is currently the case.

I am opposed to deregulation and the proliferation of alcohol outlets because everything I have read and seen in the last 20 years suggests that it will increase alcohol-related problems.

SECTION I: THE RHETORIC OF DEREGULATION

Those who advocate alcohol deregulation have generated a warm, fuzzy language all their own. The issue is often phased in terms of modernizing alcohol distribution, down-sizing government and strengthening three arguments that are frequently advanced in support of deregulation.

First, it is argued that Ontario's existing system of alcohol regulation is the legacy of some antiquated Victorian morality. Deregulation is advanced as an essential element in modernizing alcohol policy. Regardless of what the origins of our alcohol laws might have been, the existing regulatory system is more than amply justified on the basis of public health and safety. Alcohol is not regulated because of some fetish with bygone morality, but rather because it is associated with 18,000 deaths a year in Canada.

A modern system of alcohol regulation would reflect the growing body of empirical research on the harms, injuries, illnesses, and social costs attributable to alcohol. That research would support far more rigorous regulation of alcohol and dramatically increased enforcement of the alcohol law. It is important to remember that alcohol is the only intoxicating substance that we allow to be mass-marketed and mass-advertised in our society. Our society would not tolerate the "Pablo Escobar Crack-Cocaine Hundred Yard Dash", and yet we have "Labatt's Monday Night Football" and the "Molson Indy." Along with alcohol's very preferred treatment, must come appropriate regulation.

Second, it is argued that alcohol deregulation will increase government revenue and decrease costs. Even if this is in fact true, we must examine the other half of the equation. There is no net financial benefit to government or society from increased alcohol sales. Even if one ignores the human costs, the simple fact is that society subsides the alcohol trade. While alcohol sales generate considerable government tax revenue, these are more than offset by the financial costs of alcohol-related problems. If the Australian data is any indication, for every dollar coming in the front door in government tax revenue, three dollars flow out the back door in police, criminal justice, health, and other social costs and expenditures. It is extremely difficult to understand why anyone would want to expand a trade that is a net drain on society. To then suggest that increasing this net financial drain is somehow fiscally desirable or prudent is more puzzling still.

Third, it has been argued that alcohol is a beverage like all other beverages and should be marketed and regulated as such. This argument ignores the fact that, unlike other beverages, alcohol generates a staggering toll of deaths, injuries, illnesses, and social costs in our society. Let those who advocate alcohol deregulation show me the milk-related car accidents statistics, the police reports or orange-juice crazed youths running amuck outside of fruit stands and the studies on tea-related hospital costs.

In large measure, the rhetoric of deregulation is based on the image of alcohol as a benign consumer product. It is this issue that I will discuss in the remaining time.

SECTION II: THE IMAGE OF ALCOHOL

I am concerned that alcohol deregulation will further contribute to our society's misleading image of alcohol. We have adopted what I call the "Miami-Vice of Drugs." By that, I mean we have glamorized the drug trade and exaggerated the risks of illicit drugs, while largely ignoring the far greater risks posed by tobacco and alcohol. This view of drugs is not only misleading, but dangerous because it re-enforces the message to young people that alcohol and tobacco are relatively benign.

The "Miami-Vice" approach is perhaps best illustrated by the Benji Hayward incident On May 13, 1988, 14 year old Benji Hayward drowned in Lake Ontario, following a Pink Floyd concert at Toronto's Exhibition Stadium. When his body wad recovered five days later, there were indications that Benji had consumed LSD and cannabis shortly before the tragedy occurred. Various politicians responded with statements of outrage. There were calls for a prohibition on rock concerts and banner headlines in newspapers across Canada. The incident resulted in the establishment of a well-publicized coroner's inquest and a special legislative task force to examine illicit drug problem. After much fanfare, the provincial government established the Ontario Anti-Drug Secretariat and agave it an annual budge of $39 million and a mandate to address illicit drugs.

During the six-month period of time that this incident made front-page news across Canada, over 90 young people between the ages of 16 and 24 were killed in alcohol-related car accidents in the province of Ontario alone. Yet, there was no public outcry, no banner headlines, no coroner's inquests, no legislative task force, and no government agency established to address these deaths. It almost appears that to politicians, the media and the public, these impaired driving deaths just didn't count.

Tragically, the risks of alcohol are not limited to driving. Last winter, Ontario suffered a record number of alcohol-related snowmobile fatalities. Moreover, approximately half of all drowning in Ontario are alcohol -related. Last spring, for example, two presumably alcohol-related boating accidents claimed the lives of eight young people. Nevertheless, like impaired driving fatalities, these avoidable deaths produced no more than a ripple of media attention and failed to trigger any government action or expression of concern. Moreover, these statistics do not include alcohol-related falls, fires, industrial accidents, overdoses, pedestrian deaths, violence, or suicides.

Consistent with its strategy of normalizing alcohol consumption, the alcohol industry's advertising, sponsorships and promotions are designed to convince the public that alcohol is an essential ingredient of most human relationships and activities. The clear message is that alcohol goes with everything -- relaxing after work, sports, dancing, partying, and athletic and sexual success. As I am fond of saying, "I haven't had as much fun in my entire life as the people in a 30-second beer commercial." Alcohol is marketed as portable fun. It's just like the American Express Card - don't leave home without it.

Nowhere has the industry been more successful than in making alcohol a central feature of youth culture. The industry owns and or sponsors radio stations, music programs, recording artists, and most types of sporting activities. A large percentage of all youth figures work for or are sponsored by the alcohol industry, or come festooned with alcohol logos and brand names. You simply cannot watch sports on television or go to a professional sporting event without being inundated directly or indirectly by alcohol advertising. The much heralded SkyDome apparently has 136 drinking outlets. We give young people very clear and powerful messages that alcohol is positive, fun and at the core of "the good life", so say their icons and leaders.

Lost in this barrage of successful marketing, strategies, is the fact that alcohol is a potentially toxic drug with know intoxicating and dependence-producing properties. Tragically, young people are dramatically over-represented in all forms of alcohol-related accident death and violence. Accidents are the largest single cause of death among young people and approximately 50% of these are alcohol-related. Alcohol deregulation will re-enforce the already persuasive, misleading and dangerous message that our society gives to young people about alcohol.

If we are committed to advancing public health and safety, we must ensure that the image of alcohol is consistent with the risks that it poses. This would entail strengthening the regulations governing alcohol advertising, sponsorships, promotions and marketing, limiting the number of alcohol outlets, and more rigorously enforcing the existing alcohol laws. Alcohol deregulation is a giant step in exactly the wrong direction.

CONCLUSION:

I do not believe in the "Chicken Little Theory" of alcohol related harm. That is, I do not believe that Ontario's current patterns of alcohol-related harms just fall from the sky. Rather, these harms are the direct result of our current alcohol policies. If we are willing to change these policies, we can dramatically reduce the adverse consequences that they generate. The research done by many of the people in the room today provide powerful evidence of what will be effective and also what will not.

Given the importance of alcohol policy, turning a blind eye to the continued deregulation of alcohol would be not only imprudent, but also irresponsible. I, for one, would prefer to risk being criticized today for speaking out, than condemned tomorrow for ignoring opportunities to reduce alcohol-related harm in Ontario. At a minimum, I owe this to Ontario's next generation of youth.

This speech was delivered at the Information Symposium on Alcohol Privatization/Deregulation, November 20, 1995.