Changing Alcohol Prices: Legal Or Illegal?

Alcohol pricing is a highly regulated area, with laws and policies in place to control how much alcohol is sold for and to whom. The price of alcohol is linked to demand, with higher prices leading to reduced consumption and fewer alcohol-related problems. As such, many countries have implemented policies to increase alcohol prices, such as minimum unit pricing, which raises the price of the cheapest alcohol, and excise taxes, which are based on the volume of alcohol sold. These policies are particularly effective in reducing alcohol consumption among youth and young adults, as well as drinking and driving, alcohol-related illnesses, injuries, and deaths. On the other hand, decreasing alcohol prices or offering promotions can be illegal in some places, as it encourages excessive consumption and can lead to negative consequences.

Minimum unit pricing policies

While it is not explicitly illegal to change the price of alcohol, there are laws and regulations that govern the pricing of alcoholic beverages. One such regulation is the minimum unit pricing policy (MUP).

There are two main types of minimum pricing policies for alcohol: minimum unit pricing and minimum pricing. Minimum unit pricing sets a price per unit of alcohol, such as 14 grams of pure alcohol. On the other hand, minimum pricing sets prices based on the container size and type of alcohol, such as a liter of beer or liquor, without considering the alcohol content.

Minimum pricing policies are more commonly used in other countries, such as parts of Europe and Canada, than in the United States. However, some US states, like Oregon, are starting to implement these policies. The World Health Organization (WHO) recommends the use of minimum pricing policies as a way to reduce alcohol-related harm and morbidity.

While alcohol taxes are the most common way to adjust alcohol prices in the US, they have not kept up with inflation, making alcohol relatively cheaper over time. By using minimum pricing policies in conjunction with alcohol taxes, public health organizations and state agencies can better control alcohol prices and potentially reduce alcohol-related problems.

Dram shop laws

The laws are intended to protect the public from the dangers of serving alcohol to minors and intoxicated patrons by holding establishments liable for their actions. Proponents of dram shop laws argue that they reduce alcohol-related crashes and decrease excessive and illegal alcohol consumption. They also provide an incentive for businesses to train their employees on how to identify and refuse service to visibly intoxicated individuals or minors, although proving liability can be challenging in some cases.

Administrative laws

Registration and Licensing:

Retail dealers of alcoholic beverages are typically required to obtain licenses and registrations before commencing operations. This involves filing the necessary paperwork, such as Form TTB F 5630.5d, with the relevant authorities, such as the Alcohol and Tobacco Tax and Trade Bureau (TTB). Changes in ownership, business location, or discontinuation of business must also be reported.

Price Posting and Pricing Practices:

Some jurisdictions require alcoholic beverage wholesalers to post their prices to retailers, with variations in frequency and timing. For example, Connecticut, Delaware, Missouri, New Jersey, and New York mandate monthly price postings, while Georgia, Indiana, and South Dakota require continuous updates as changes occur. Other states allow wholesalers to change prices at various times before the month in which the changes take effect.

The law prohibits unfair pricing practices, such as selling alcoholic liquor below cost or at a price intended to destroy competition. It also prohibits wholesalers from charging different prices to retailers and restricts package stores from selling other commodities alongside alcoholic beverages.

Inspection and Enforcement:

The TTB officers are authorized to inspect retail dealers' premises, examine records, and enforce federal liquor laws. Violations can result in fines, imprisonment, or both. Obstructing a TTB officer in their duties is subject to significant penalties.

Other Regulations:

These administrative laws aim to regulate the sale and distribution of alcohol, ensuring fair pricing practices, maintaining competition, and addressing public health and safety concerns associated with alcohol consumption.

Open container laws

While I could not find explicit information on whether it is illegal to change the price of alcohol, I did find information on open container laws.

In the state of North Carolina, for example, open container laws prohibit the consumption of alcohol in vehicles and certain public areas. It is illegal for both the driver and passengers to possess an open container of alcohol on controlled-access highways, including interstates and highways where access is limited. On other roadways, passengers are allowed to possess and consume alcohol in certain types of vehicles, such as motor homes or house cars.

It is important to note that while open container laws restrict alcohol consumption in public areas, private property, such as backyards or rented venues, typically allows for responsible drinking. Additionally, special events like festivals or concerts may have designated areas where alcohol consumption is permitted.

Alcohol-related harm

Alcohol misuse is a significant issue, with estimated costs to the NHS of £3.5 billion per year and a staggering £21 billion to society as a whole annually in the UK. Alcohol-related harm includes both the direct and indirect consequences of alcohol consumption. Direct consequences refer to conditions that are a direct result of alcohol misuse, such as alcohol poisoning and alcoholic liver disease. On the other hand, indirect consequences are those that are partly related to alcohol consumption, including liver cancer.

Research has shown that increasing the price of alcoholic beverages can be an effective strategy to combat alcohol misuse and reduce its harmful consequences. This approach appears logical, as the costs associated with purchasing alcohol increase, creating a financial barrier to excessive consumption. However, in reality, alcohol prices have generally declined relative to other goods and services over the past five decades due to small and infrequent changes in federal and state taxes. This decline in real prices is believed to have contributed to higher levels of alcohol consumption and associated problems.

The relationship between price and alcohol consumption is complex and influenced by various factors. One study found that the impact of increasing alcohol taxes on youth drinking behaviour depends on the minimum legal drinking age (MLDA) and the associated indirect costs of drinking. When the MLDA is relatively low, a tax increase significantly impacts the full price of alcohol and leads to a noticeable decrease in youth drinking. However, when the MLDA is higher, the same tax increase has a minimal effect on the full price, resulting in a smaller reduction in alcohol consumption among young people.

While raising alcohol prices may be a useful policy lever, it is not the only factor influencing alcohol-related harm. Social and cultural norms, availability, and individual factors also play a role in drinking behaviour. Additionally, the effectiveness of price increases may vary across different demographic groups. For instance, research suggests that drinking patterns among female college students may be more sensitive to price changes than among their male counterparts. Nevertheless, addressing alcohol-related harm remains a critical public health issue, and a comprehensive approach that considers multiple strategies is necessary to mitigate the harmful consequences of alcohol misuse.

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