Alcohol Monopoly – a government monopoly

Alcohol Monopoly – a government monopoly

Alcohol monopoly systems defy neat classification. An alcohol monopoly is a government monopoly on manufacturing and/or retailing of some or all alcoholic beverages, such as beer, wine, and spirits. Each state has a historical trajectory shaped by influential events and persons, resulting in a diverse mix of policies and practices that can be fully appreciated only by painting each state’s unique portrait. It can be used as an alternative for a total prohibition of alcohol. Impacts of the privatization scenarios on pricing, outlet density, trading hours, advertising, and marketing were estimated based on Swedish expert opinion and published evidence. They exist in all Nordic countries except Denmark proper (only on the Faroe Islands), and in all provinces and territories in Canada except Alberta (which privatized its monopoly in 1993). Elsewhere, these monopolies are being dismantled with evidence of increased consumption and harm. The methods employed can be applied in other jurisdictions and for other policy changes.

An alcohol monopoly is a government monopoly on manufacturing and/or retailing of some or all alcoholic beverages, such as beer, wine, and spirits. Government commodity monopolies are in general threatened by negotiations to eliminate trade barriers through trade agreements and common markets.

Alcohol consumption is the leading risk factor for disease burden in low mortality developing countries, and the third-largest risk factor in developed countries. Government alcohol monopolies were created in North America and Scandinavia to limit health and social problems. In the United States, there are some alcoholic beverage control states, where alcohol wholesale is controlled by a state government operation and retail sales are offered by either state or private retailers. Impacts of the privatization scenarios on pricing, outlet density, trading hours, advertising, and marketing were estimated based on Swedish expert opinion and published evidence. The term ‘alcohol policy’ in itself had its roots in the Nordic countries and has progressively spread in use and importance since the 1960s.

There are currently 18 government alcohol monopoly states or “control states” in the U.S. The term “control state” is popular but misleading. That’s because all states control and regulate the sale of alcohol. Therefore every state is a control state. An alcohol monopoly also formerly existed in Taiwan between 1947 and 2002, which uniquely did not actually serve as a form of reducing alcohol abuse as was the case in the Nordic countries, Canada, and the U.S., but was rather a post-colonial hangover from a system inherited from Japanese rule. In spite of their efforts to be responsive to their customers, there have been growing efforts to privatize them, and U.S. monopolies, in particular, feel under siege. Their main protection has been their enormous profitability for the state.

Government commodity monopolies are in general threatened by negotiations to eliminate trade barriers through trade agreements and common markets. The Taiwanese market was gradually opened to overseas brands starting from 1987, with full liberalization achieved in 2002, the year when Taiwan was admitted to the WTO.