Executive Summary

Michigan regulates the sale of beer, wine and “spirituous” (hard) liquor through state statute and rules promulgated by the Michigan Liquor Control Commission. As part of this system, state government intervenes in the spirituous liquor market as a monopoly wholesaler, a role it has filled since the end of Prohibition. The state also mandates that most suppliers of beer and wine grant exclusive sales territories to a select group of wholesalers. These and other restrictions artificially raise prices and reduce the availability of alcohol to Michigan’s consumers.

Last year, a state Liquor Control Advisory Rules Committee was charged with developing alcohol control reform proposals. Some critics, however, have cautioned that the state’s present alcohol laws are necessary to protect public health. This Policy Brief examines the health and safety effects of alcohol regulations like Michigan’s.

For example, the authors review Donald J. Boudreaux and Julia Williams’ 2010 study, which compared alcohol “control” states with “license” states — that is, states that act as liquor wholesalers or retailers with states that simply license private wholesalers and retailers. Based on federal data, including data from the Centers for Disease Control and Prevention, Boudreaux and Williams found no statistically significant differences between the 18 control states and the 32 license states (and the District of Columbia) in rates of alcohol-related deaths, drunk-driving fatalities or binge drinking. They found similar results for rates of drunk-driving fatalities and binge drinking among youths.

The Policy Brief’s authors likewise reviewed the CDC’s alcohol-attributable deaths data, but differentiated between license states and three levels of state alcohol control — heavy, moderate and light, depending on the extent of the state’s presence in wholesale and retail alcohol markets. Analyzing the figures for 2001 through 2005 (the most recent available), the authors found the four types of states statistically indistinguishable in the rate of alcohol-attributable deaths.

Indeed, the average alcohol-attributable death rate for light-control states, such as Michigan, was slightly higher than that of license states (though not significantly so). The same was true for the death rate among those under 21. Of the 10 states with the lowest alcohol-attributable fatality rates per 100,000 people, eight were license states.

The authors examine a finding advanced by the group Michigan Alcohol Policy Promoting Health & Safety: MAPPHS calculates that in 2009, the rate of fatal alcohol-related crashes in license states exceeded that in control states by 7.5 percent. The authors note that this finding, which involves a single year, is subject to one-time deviations from the norm. They also note that a difference-of-means test indicates the result is likely due to random chance, rather than state alcohol-control policies.

In a more extensive analysis, John Pulito and Antony Davies (co-author of the Policy Brief) reviewed 1982-2002 data from the National Highway Traffic Safety Administration for both alcohol-impaired traffic fatalities and alcohol-involved traffic fatalities. The two sets of statistics are narrower and broader measures of alcohol fatality rates, respectively.

In neither case did the results fit the expected pattern of decreasing fatality rates with increasing levels of state alcohol control. With alcohol-impaired traffic fatality rates, only heavy-control states were significantly lower than license states; moderate- and light-control states were either significantly higher or not significantly different, depending on whether the fatalities involved underage or legal-age drinkers. With alcohol-involved traffic fatality rates — the broader of the two measures — heavy-, moderate- and light-control states were either significantly higher or not significantly different from license states, depending again on whether the fatalities involved underage or legal-age drinkers.

Research evidence also casts doubt on the view that restricting the retail availability of alcohol, as Michigan does for spirituous liquor, decreases alcohol-related harms. For example, in a 2010 doctoral thesis at the University of Michigan, Tenaya Marie Sunbury looked at retail density in rural Michigan and concluded, “For both men and women, higher density of alcohol establishments was related to lower alcohol consumption (quantity/frequency), binge drinking and drink/driving [sic].” If so, Michigan’s retail regulations may even be counterproductive.

Michigan’s alcohol control interventions do not appear to improve public health. The state’s regime does, however, impose real costs on business and consumers. Policymakers should consider the possibility that the current system of alcohol control hinders economic growth and diverts resources that might be directed to better strategies to reduce alcohol harm.

Citations are provided in the main text.