Alcohol Excessive Consumption: Privatization of Retail Alcohol Sales

Summary of CPSTF Finding

Based on its charge to identify effective disease and injury prevention measures, the Community Preventive Services Task Force (CPSTF) recommends against the further privatization of alcohol sales in settings with current government control of retail sales. This finding is based on strong evidence that privatization results in increased per capita alcohol consumption, a well-established proxy for excessive consumption.


The privatization of retail alcohol sales is the repeal of government (i.e., nation, state, county, city, or other geo-political unit) control over the retail sales of one or more types of alcoholic beverages, thus allowing commercial retailing of those beverages.

The privatization of retail alcohol sales generally applies only to off-premises alcohol outlets places where alcoholic beverages are sold for consumption elsewhere (e.g., liquor stores). Privatization does not generally affect the retail sales of alcoholic beverages at on-premises alcohol outlets places where alcoholic beverages are sold for consumption on-site (e.g., bars, restaurants).

States with government control of alcohol sales are referred to as control states, and states with privatized sale are referred to as license states. Re-monopolization of retail alcohol sales is the re-establishment of government control over the retail sale of one or more types of alcoholic beverage.

CPSTF Finding and Rationale Statement

Read the full CPSTF Finding and Rationale Statement for details including implementation issues, possible added benefits, potential harms, and evidence gaps.

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About The Systematic Review

The CPSTF finding is based on evidence from a systematic review of 18 studies (search period through October 2007).

The review was conducted on behalf of the CPSTF by a team of specialists in systematic review methods, and in research, practice, and policy related to preventing excessive alcohol consumption.

Summary of Results

Detailed results from the systematic review are available in the CPSTF Finding and Rationale Statement.

The systematic review included 18 studies.

  • Seventeen studies assessed the effects of privatization on per capita alcohol sales, a well-established proxy for excessive alcohol consumption and related harms.
    • Overall, there was a 44.4% median increase in per capita sales of privatized alcoholic beverages within the jurisdiction that underwent privatization during the years following privatization of retail alcohol sales (17 studies).
    • During this same time frame, sales of nonprivatized alcoholic beverages within the jurisdiction that underwent privatization decreased by a median of 2.2% (9 studies).
    • One study in Finland assessed the effects of privatization for groups reporting different levels of alcohol consumption. It found privatization increased consumption across all groups.
  • One study in Sweden found that re-monopolizing the sale of medium-strength beer was associated with a general reduction in alcohol-related harms.

Summary of Economic Evidence

An economic review of this intervention was not conducted because the CPSTF recommends against use of the intervention.


Applicability of this intervention across different settings and populations was not assessed because the CPSF recommends against use of the intervention.

Evidence Gaps

The CPSTF identified several areas that have limited information. Additional research and evaluation are needed to answer the following questions and to fill remaining gaps in the evidence base. What are evidence gaps?
  • What is the relationship between privatization and patterns of excessive alcohol consumption (e.g., binge drinking) and alcohol-related harms? Cohort studies in the United States would be especially useful.
  • What would be the impact of increased government control over alcohol sales (e.g., re-monopolization) on excessive alcohol consumption and related harms, were such events to occur in the U.S. or other high-income nations?
  • How do the effects of privatization observed in this review vary by the degree of government regulation and other specific parameters of the privatization?
  • What would the economic impact of privatization be in the United States? The anticipated economic effects of privatization include a large, but short-term, source of revenue to states; a potential increase in healthcare and criminal justice costs; and productivity losses from expected increases in excessive alcohol consumption owing to greater availability and/or lower prices.
  • What are the effects of different specific approaches to privatization on state revenues associated with sales and taxes on alcoholic beverages?

Study Characteristics

  • The effects of 12 distinct privatization events were assessed as well as one instance of remonopolization.
  • The privatization events assessed were in seven U.S. states; two Canadian provinces; and Finland.
  • All studies used alcohol sales data as an index of population-level alcohol consumption except for one study that assessed changes in individual-level consumption.
  • The privatization events assessed in these studies occurred between 1950 and 2000.

Analytic Framework

Effectiveness Review

Analytic Framework
When starting an effectiveness review, the systematic review team develops an analytic framework. The analytic framework illustrates how the intervention approach is thought to affect public health. It guides the search for evidence and may be used to summarize the evidence collected. The analytic framework often includes intermediate outcomes, potential effect modifiers, potential harms, and potential additional benefits.

Summary Evidence Table

Effectiveness Review

Summary Evidence Table

Included Studies

The number of studies and publications do not always correspond (e.g., a publication may include several studies or one study may be explained in several publications).

Eighteen studies, published in 14 papers, were included in this review

  • Each of 17 studies evaluated one privatization event in one setting.
    • “Events” were instances when the control of retail alcohol sales changed (i.e., privatization or re-monopolization).
    • In some cases, more than one event occurred in the same setting over time (e.g., Iowa privatized wine in 1985 and then privatized spirits in 1987).
  • One study evaluated the effects of alcohol re-monopolization in Sweden.

Many of the papers included more than one study (i.e., they evaluated the effect of two different events in the same location or similar events that occurred in multiple locations). The systematic review team also considered studies that did not meet the review eligibility criteria because their study designs did not support causal inferences. This Secondary Evidence was useful for generating hypotheses and for strengthening or weakening conclusions based on qualifying studies, but it was insufficient alone for assessing intervention effectiveness.

Effectiveness Review

Fitzgerald JL, Mulford HA. Alcohol availability, drinking contexts and drinking problems: the Iowa experience. J Stud Alcohol 1993;54(3):320-5.

Fitzgerald JL, Mulford HA. Consequences of increasing alcohol availability – the Iowa experience revisited. British Journal of Addiction 1992;87(2):267-74.

Fitzgerald JL, Mulford HA. Privatization, price and cross-border liquor purchases. J Stud Alcohol 1993;54(4):462-4.

Holder HD, Wagenaar AC. Effects of the elimination of a state monopoly on distilled spirits’ retail sales: a time-series analysis of Iowa. British Journal of Addiction 1990;85(12):1615-25.

Macdonald S. The impact of increased availability of wine in grocery stores on consumption: four case histories. British Journal of Addiction 1986;81:381-7.

M kel P. Whose drinking does the liberalization of alcohol policy increase? Change in alcohol consumption by the initial level in the Finnish panel survey in 1968 and 1969.Addiction 2002;97(6):701-6.

Mulford HA, Fitzgerald JL. Consequences of increasing off-premise wine outlets in Iowa.British Journal of Addiction 1988;83(11):1271-9.

Mulford HA, Ledolter J, Fitzgerald JL. Alcohol availability and consumption: Iowa sales data revisited. J Stud Alcohol 1992;53(5):487-94.

Ramstedt M. The repeal of medium-strength beer in grocery stores in Sweden–the impact on alcohol-related hospitalizations in different age groups. Finland: Nordic Council for Alcohol and Drug Research (NAD), 2002. No. 42.

Smart RG. The impact on consumption of selling wine in grocery stores. Alcohol 1986;21(3):233-6.

Trolldal B. An investigation of the effect of privatization of retail sales of alcohol on consumption and traffic accidents in Alberta, Canada. Addiction 2005;100(5):662-71.

Wagenaar AC, Holder HD. A change from public to private sale of wine: results from natural experiments in Iowa and West Virginia. J Stud Alcohol 1991;52(2):162-73.

Wagenaar AC, Holder HD. Changes in alcohol consumption resulting from the elimination of retail wine monopolies: results from five U.S. states. J Stud Alcohol 1995;56(5):566-72.

Secondary Evidence Studies

Andreano RL, Yi Li J. Death rates from liver cirrhosis in alcohol monopoly and free-market states. Quarterly J Stud Alcohol 1974;35:649-54.

Beard TR, Gant PA, Saba RP. Border-crossing sales, tax avoidance, and state tax policies: an application to alcohol. Southern Economic Journal 1997;64(1):293-306.

Colon I. The influence of state monopoly of alcohol distribution and the frequency of package stores on single motor vehicle fatalities. Am J Drug Alcohol Abuse 1982;9(3):325-31.

Goel RK, Morey MJ. The interdependence of cigarette and liquor demand. Southern Economic Journal 1995;62(2):451-9.

Heien D, Pompelli G. Stress, ethnic and distribution factors in a dichotomous response model of alcohol-abuse. J Stud Alcohol 1987;48(5):450-5.

Hoadley JF, Fuchs BC, Holder HD. The effect of alcohol beverage restrictions on consumption: a 25-year longitudinal analysis. Am J Drug Alcohol Abuse 1984;10(3):375-401.

Kenkel DS. Drinking, driving, and deterrence – the effectiveness and social costs of alternative policies. J Law & Economics 1993;36(2):877-913.

Kenkel DS. New estimates of the optimal tax on alcohol. Economic Inquiry 1996;34(2):296-319.

M kel P, Rossow I, Tryggvesson K. Who drinks more and less when policies change? The evidence from 50 years of Nordic studies. Finland: Nordic Council for Alcohol and Drug Research (NAD), 2002. 42.

McCornac DC, Filante RW. The demand for distilled spirits: an empirical investigation. J Stud Alcohol 1984;45(2):176-8.

Miller T, Snowden C, Birckmayer J, Hendrie D. Retail alcohol monopolies, underage drinking, and youth impaired driving deaths. Accident Analysis and Prevention 2006;38(6):1162-7.

Nelson JP. State monopolies and alcoholic beverage consumption. Journal of Regulatory Economics 1990;2(1):83-98. Ornstein S, Hanssens D. Alcohol control laws and the consumption of distilled spirits and beer. J Consumer Research 1985;12(2):200-13.

Popham RE, Schmidt W, de Lint J. Government control measures to prevent hazardous drinking. In: Ewing JA, Rouse BA, eds. Drinking alcohol in American society: issues and current research. Chicago: Nelson-Hall, 1978:239-66.

Spellman WE, Jorgenson MR. Liquor control and consumption. J Stud Alcohol 1983;44(1):194-7.

Stockwell T, Zhang J, Macdonald S, Pakula B, Gruenewald P, Holder H. Changes in per capita alcohol sales during the partial privatization of British Columbia’s retail alcohol monopoly 2003-2008: a multi-level local area analysis. Addiction 2009;104:1827-36.

Zardkoohi A, Sheer A. Public versus private liquor retailing: an investigation into the behavior of the state governments. Southern Economic Journal 1984;50(4):1058-76.

Search Strategies

The following databases were searched from their inception up to October 2007 to identify studies assessing the impact of changes for all interventions included in the Community Guide series of alcohol reviews: Econlit, PsycInfo, Sociology Abstracts, MEDLINE, Embase, and EtOH (not available after 2003). The Alcohol Epidemiology Program at the University of Minnesota updated the search for evidence through December 2010 using the ISI Web of Knowledge. In addition, the bibliographies of all reviewed articles were used to identify any further literature, and subject matter experts were consulted.

1) Alcohol Keywords

  • (Alcoholic drink$ OR alcoholic beverage* OR alcohol OR liquor OR beer OR wine OR spirits OR drunk OR intoxicat$ OR alcoholic binge* OR binge drinking)

2) Keywords for interventions of interest (assume ORs between bullets) {Target intervention}

  • ((day$ or hour$ or sale$) and (limit$ or sale$ or extend$ or restrict$ or trading)) {Restrictions on days and hours of sale}
    • (day OR hour OR “time of day” OR time) AND (sale* OR trading OR commerce) AND (limit OR restrict OR regulate)
  • (tax or taxes or taxation or cost or costs$ or prices or price) {Increased alcohol taxes}
    • (tax*) AND (increase OR raise)
  • (social and (host$ or liability or provider$ or provision)) {Social host liability}
    • (“social host” OR provider* OR provision) AND (liability OR responsibility)
  • ((underage or minor or youth or young or teenage$) and licens$ and (enforcement or fee$ or driver$)) {License suspension/revocation for non-MV alcohol violations among underage drinkers}
    • (underage OR minor OR youth OR adolescent OR teen*) AND (“drivers license” OR) AND (suspension OR revocation OR revoke) AND (“non-mv alcohol violation” OR (“alcohol violation” NOT (driving OR “motor vehicle”))
  • (privatiz$ or monopol$ or ((sale$ or distribut$ or industry) and (ban$ or strike$ or prohibition))) {Government monopolies on off-premise outlets}
    • (“off-premise”) AND (“government monopoly” OR government OR privatiz* OR monopoly) AND (sale* OR distribut* OR industry)
  • (minimum age or drinking age or purchase age or legal age or MDA or MLDA or ((teen$ or adolescen$ or young or college$ or youth$ or student$ or underage$ or minor$) and (enforce$ or deterrence$ or avail$ or access$ or crackdown or ID or identification or compliance))) {Enhanced enforcement of laws prohibiting possession or consumption of alcohol by minors}
    • (underage OR minor OR youth OR adolescent OR teen*) AND (possess* OR consum* OR access*) AND (law* OR regulat* OR enforce* OR deter* OR crackdown OR complia*) AND (“minimum age” OR “drinking age” OR “purchase age” OR “legal age” OR “MDA” OR “MLDA”)
  • (advertis$ or marketing or promotion$ or internet or product placement or billboard$ or sponsorship) {Limiting advertising exposure}
    • (advertis* OR market* OR promotion* OR internet OR www OR World Wide Web OR “product placement” OR billboard* OR sponsor* OR target*) AND (underage OR minor OR youth OR adolescent OR teen*) AND (limit OR reduc* OR restrict* OR regulat*)
  • (compliance check$ or sting$ or decoy$ or purchase attempt or dram shop) {Enhanced enforcement of laws prohibiting provision of alcohol to minors}
    • (“dram shop” OR “on-premise” OR provider) AND (“compliance check*” OR “purchase attempt*” OR enforce*) AND (law* OR regulat* OR prohibit*) AND (underage OR minor OR youth OR adolescent OR teen*)
  • (((manager$ or management or serv$ or clerk$ or seller$) and (liabilit$ or practice$ or training or beverage$)) or liquor liability) {Responsible beverage server programs/Dram shop liability}
    • (provider OR manage* OR serv* OR “dram shop” OR “on-premise” OR sale*) AND ((liabil* OR responsib*) OR (“responsible beverage server program*” OR training OR program*)
  • (gas station or self service or ((outlet$ or store$ or bar or bars or establishment) and (density or densities or on-sale or off-sale or type or types or number$ or location$ or concentration or zoning))) {Outlet density and zoning restrictions}
    • (“gas station” OR store OR bar* OR establishment* OR sale*) AND (zon* OR restriction* OR regulat* OR law*) AND (dens*)
  • (happy hour$ or liquor by the drink or ladies night or (drink$ and (special$ or discount$ or pric$)) { Decreasing promotional pricing}
    • (promot* OR special OR discount OR “happy hour” OR “ladies night”) AND (pric*) AND (decrease OR restrict* OR regulat* OR limit OR reduc*)

3) Exclusionary keywords

  • (air and quality) or pollution
  • methanol or methyl
  • solvent$

Search for (1) AND (2), NOT (3)

Considerations for Implementation

The CPSTF recommends against use of the intervention.