The Campaign for a Healthy Alcohol Marketplace was born from the realization of Pamela Erickson, a former alcohol regulator, that we could lose a good regulatory system out of ignorance. Too often she heard how “antiquated” our regulations are as well as the widespread myth that Europe has fewer regulations and fewer problems (not at all true).
One of the unique aspects of our regulatory scheme is the “three-tiered system.” This system structures our marketplace with responsibilities for each tier: supplier, wholesaler and retailer. Unfortunately, when the campaign began few people had ever heard of the three-tiered system let alone understood its value. In fact, Erickson had to admit, during her seven years as Executive Director of the Oregon Liquor Control Commission (OLCC), she did not entirely understand the value of the three-tiered system. Only after joining the alcohol abuse prevention field, did she fully appreciate the value of our comprehensive alcohol regulatory system.
After leaving the OLCC, she joined a non-profit, Oregon Partnership, to run underage drinking prevention programs. It was there that she absorbed the vast amount of research about what works in alcohol abuse prevention. And she learned that basic alcohol regulations are actually effective in reducing problems – particularly if well enforced! And, most of the regulations are not antiquated, but well-conceived. Many regulations are based on science as well as historical experience with unregulated markets.
Before Prohibition, large alcohol manufacturers dominated the market by owning distribution and retail operations known as Tied Houses. Heavy pressure was exerted on the retail outlet to sell large quantities of alcohol. The practices of these ”Tied Houses” led to major social problems. Today, a similar problem with “vertical integration” exists in the United Kingdom, but this time it’s the large grocery retailers that have eliminated the middle tier and work directly with the suppliers. Their substantial purchasing power allows them to buy large volumes of alcohol at very favorable prices. They heavily promote cheap alcohol and the result has been major social problems with alcohol abuse, disease and underage drinking.
As a starting point for the campaign, Erickson decided to establish a pilot program in Oregon which would focus on explaining the three-tiered system and especially the function of the middle tier, the distributors and wholesalers. This tier was created after Prohibition. It is critical to preventing vertical integration, a form of monopoly where one company owns the supplier, wholesaler and/or retailer. These types of mergers can lead to excessive market domination by large companies.
The pilot project began with a series of “Executive Interviews” with 20 key policy makers in Oregon to determine their level of knowledge about marketplace regulation. As expected, their knowledge was quite limited. However, there was a willingness to learn more. From Executive Interview information, a basic presentation was developed to explain why we need marketplace regulations and how they work. (“Why can’t we sell alcohol like tires and mayonnaise?”) An educational presentation was given to a list of key organizations. A feedback questionnaire indicated increased understanding resulted.
A second pilot project was developed for the state of Washington during the pendency of a lawsuit by the Costco Corporation. Costco challenged nine different market regulations. Elimination of these regulations would radically change the alcohol regulatory system in Washington. Costco won on most issues at the District Court level, but lost on appeal. It was clear to Erickson that the prevention and enforcement communities needed to know more about why we need marketplace regulations and what could happen if they go away. She convinced the Washington Beer and Wine Wholesalers Association to finance an educational effort. It was a critical time as Costco had turned to the Legislature in hopes of getting the regulatory changes they failed to gain in court. They convinced the Legislature to form an interim committee to study the regulations. The prevention community formed a stakeholder’s group and took a strong position in favor of retaining the regulations. As a result, many of the changes originally proposed were not made. However, Costco eventually got some of the changes they wanted via a ballot measure they sponsored and publicized. It took two tries, but eventually they got something passed which resulted in re-writing 40 pages of Washington Statutes. Despite these changes, Washington’s regulatory system still exists as many key elements remain.
After completing two pilot projects, a national campaign was formed. During the pilot phase of the project, a newsletter and website were developed. The newsletter is now published monthly with over 6,000 direct recipients. In addition, the newsletter articles are re-printed in several on-line newsletters thus expanding the reach to a national audience. The goal for the website is to be the primary repository of educational resources on this important subject. All newsletters issued are found there. Erickson has produced many PowerPoint presentations and reports which are located on the website. More recently, she has served as a legal expert in several important court cases. Expert reports and affidavits from these cases are also available on the website. All of these materials may be downloaded free of charge without asking for permission. They can be used to orient new employees, commissioners and legislators. There is a section for attorneys who need to defend state regulations. The only caveat is that material not be changed and attributed to Erickson although she is willing to work with those wanting to make modifications and send to state recipients.