News

Beer, Wine & Spirits Retailers Celebrate Tavern Month This May 

Monday, May 04, 2015 4:04:00 PM

 

 

Raise a glass and toast America's bars and

the people who make them great

 

BETHESDA, MD - April 30, 2015 - This May, America's Beer, Wine and Spirits Retailers are encouraging their colleagues and customers to raise a glass in celebration of Tavern Month. Established in 1953, Tavern Month is supported by American Beverage Licensees (ABL) and celebrated each May in communities coast-to-coast. Tavern Month is an opportunity to highlight American bars and taverns that create millions of jobs in cities and towns throughout the country.

 

"Whether you're watching the big game, meeting a colleague after work, or dropping in to say hello to your favorite bartender, Tavern Month is a chance to celebrate the culture of the American tavern," said John Bodnovich, Executive Director of ABL. "In addition to their people and personalities, America's bars and taverns are also a key component of the economic engine that is the hospitality industry."

 

Direct retail alcohol sales in on-premise, licensed establishments account for as many as 1.23 million jobs; $31.7 billion in wages and benefits; and more than $76 billion in economic output according to the 2014 Economic Impact Study of America's Beer, Wine and Spirits Retailers. When including all sales by on-premise, full-service restaurants and drinking places, those numbers climb to 3.94 million jobs; $96.8 billion in wages and benefits; and over $241 billion in economic impact.

 

From the Colonial Era through Prohibition and into the 21st century, American bars and taverns have been central gathering places for community residents and welcoming sanctuaries for weary travelers. Bars and taverns know no class hierarchy, providing a common forum for those from all professions and walks of life to discuss ideas and offer their assessment of the American landscape.

 

Today's bars, taverns and nightclubs are as diverse as their communities, and as some of first businesses on America's Main Streets, are often a part of civic history and tradition. Bars and taverns are also a key link between consumers and a thriving and innovative beverage alcohol marketplace. Thanks to the Three-Tier System, bars and taverns work with distributors to serve thousands of products from brewers, distillers and vintners - large and small, domestic and international. Bars and taverns are the proving grounds for new products; reliable providers of trusted brands; and home to cicerones, mixologists and sommeliers who can help customers enjoy a local craft beer, the latest imported vodka, fine wine from California or a multitude of other products.

 

As beverage licensees, bar and tavern owners are keenly aware of the responsibility they have to their customers, staff and neighbors. By standing opposed to drunk driving, actively working the stop underage access to alcohol and training their staff in the science and art of responsible service, these businesspeople are holding up their end of the bargain when it comes to selling beverage alcohol responsibly and preventing its misuse.

 

During Tavern Month this May, join American Beverage Licensees, the largest national trade association dedicated to supporting and promoting the beverage alcohol retail community, its local bar & tavern members and the millions of customers they serve, in raising a glass to celebrate the American tavern - the friendliest place in town!

 

You can find an FAQ sheet here with information on Tavern Month, as well as a poster and the Tavern Month logo. A pdf of this press release is available.

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Have you registered for the 2015 ABL Annual Conference yet? 

Wednesday, April 29, 2015 4:21:00 PM

Source: ABL

April 23, 2015

 

Join Industry professionals, colleagues, and friends as we celebrate America's Beer, Wine, and Spirits Retailers!

 

Have you registered for the 2015 ABL Annual Conference yet?

 

Join your colleagues, industry professionals, and friends as we celebrate America's Beer, Wine and Spirits retailers! In addition to engaging and lively sessions, you can also enjoy networking time with representatives of each of the three-tiers: Producers, Distributors, and Retailers.

  

Conference attendees can expect to take home a variety of new tools and practical strategies for running successful businesses and making a positive difference in their communities. Networking opportunities will range from informal coffee breaks to social receptions to the Top Shelf Award reception and dinner. Attendees will also be able to celebrate the success of their peers and colleagues as they are recognized with the "Retailer of the Year" awards. 

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Bars agree $7 million settlement over fatal beating 

Thursday, April 23, 2015 9:27:00 AM

Source: the drinks business

by Lauren Eads

20th April, 2015

 

Two US bars that served three men past the point of intoxication, who then beat a 23-year-old man to death, have been ordered to pay damages of US$7 million.

 

Kevin Kless was killed in the early hours of January 14, 2012, by three men who had earlier that night been served by staff at two now defunct Philadelphia bars; Lucy's Hat Shop and G Lounge.

 

Witnesses said Kenneth Enriquiz-Santiago, Steven Ferguson and Felix Carrillo had been served beyond the point of "visible intoxication" by bar staff, in violation of Pennsylvania's liquor code. Two of the three men were also underage at the time.

 

Kless had been attempting to hail a cab when the drunken trio pulled up alongside and attacked him. Ferguson delivered the fatal blow, leaving Kless for dead on the sidewalk.

 

All three men are now serving sentences for their roles in the killing. In 2013, a complaint was filed alleging that the bars, through the conduct of their employees, were responsible for the actions of the three attackers. This week, in what is believed to be the largest settlement for an individual bar liability case in Philadelphia history, Kless' family was awarded $7m in damages.

 

Robert Mongeluzzi, of Saltz, Mongeluzzi, Barrett & Bendesky (SMBB), which represented Kless' estate, said no amount of money could reimburse the family for their loss, but that the settlement sent a clear message to bar owners in respect of liability.

 

"In Kevin's name, they have successfully and resoundingly delivered a message to the two bar-defendants, Lucy's Hat Shop and G Lounge, that if you serve underage, drunken patrons, and they leave your bar and commit a heinous crime, you will be held accountable for your actions", he said in a statement.

 

Pennsylvania's liquor liability laws - known as Dram Shop legislation - hold bar owners civilly responsible for serving alcohol to underage or visibly intoxicated patrons.

 

"Our son would be alive today if those bars - their managers and their employees - had just followed the law, starting with denying entry to minors," said John and Kendall Kless, Kevin's parents.

 

"We intend to ensure that all bar owners understand that if they serve underage or intoxicated customers who cause harm, they will be held accountable and could be put out of business. We hope that this lawsuit will spur the industry to follow the laws, which are in place for a reason, and spare any other family from suffering the devastating, preventable loss we have endured."

 

Insurance policies held by the two defunct clubs will pay for the settlement, with Lucy's policy will covering $1 million and G Lounge $6 million, Mongeluzzi said.

 

Ferguson pleaded guilty to third-degree murder and is serving a 10-year prison sentence. Enriquez-Santiago and Carillo, who pleaded guilty to involuntary manslaughter, were sentenced to two to five years in prison.

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Beverage Alcohol Retailers Applaud Passage  

Monday, April 20, 2015 3:13:00 PM

 

Bipartisan bill passes House 240-179; ABL urges action  

on Senate Legislation

 

April 16, 2015 - Bethesda, MD - America's beer, wine and spirits retailers applauded the passage today of the Death Tax Repeal Act of 2015 (H.R. 1105) by the U.S. House of Representatives. The bill, which was introduced by Representative Kevin Brady (R-TX) in March, will fully repeal the federal Estate Tax, also known as the Death Tax. The legislation passed by a margin of 240 - 179, with 7 Democratic members voting in favor, three Republicans voting against, and 12 members not voting. This marks the first time in ten years that the full House has voted on repealing the Estate Tax. 

 

"Full repeal of the Estate Tax has been a longstanding objective for ABL and its members, and today's vote moves us a step closer to that goal," said ABL Executive Director John Bodnovich. "We thank the House for its strong support of this bill, and urge the Senate to pass legislation to protect American family-owned businesses."

 

A Senate companion bill to the Death Tax Repeal Act, S. 860, was introduced on March 25 by Senator John Thune (R-S.D.) and currently has 30 co-sponsors. It awaits action in the Senate Finance Committee.

 

Many of America's bars, taverns and package stores are multi-generational businesses with strong ties to their communities. The Estate Tax puts these small businesses in jeopardy every year as their value is connected to illiquid assets such as land, buildings and equipment. Heirs are often forced to sell these assets to pay the tax, effectively dismantling local small-businesses across the nation. That's why beer, wine and spirits retailers believe that the best solution to protect these businesses is the full repeal of the Estate Tax.  

 

"A big thank you goes to all the ABL members who took the time to contact members of Congress and share their experiences with the Estate Tax," said Bodnovich. "Today's vote was a victory for small, independent businesses, and a testament to the power of beverage alcohol retailers' grassroots advocacy."

  

ABL encourages its members to thank the Representatives who stood up for family-owned beverage businesses. See how your Representative voted here. An "AYE" vote supported American Beverage Licensees' position.

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Why some restaurants are doing away with tipping 

Monday, April 20, 2015 3:10:00 PM

Source: Washington Post

By Maura Judkis

April 14th

 

Server Chastity Hopkins brings rice to a table during lunch service at China Chilcano in Penn Quarter. (Joseph Victor Stefanchik/For The Washington Post)

 

On a busy Friday night in New York's East Village, the friendly and efficient servers at Dirt Candy took home zero dollars in tips, but they considered it a good night. When you're a server on salary - rather than relying on often-mercurial guests for your financial livelihood - every night is a good night.

 

The vegetarian restaurant is one of a handful of eateries across the country that are experimenting with a new model of compensating employees, with varying results. When Dirt Candy reopened in a larger space last month, chef-owner Amanda Cohen announced she was eliminating the line to write in a tip on her checks. Instead, a 20 percent "administrative fee" is tacked onto every bill and goes toward employee salaries, for both servers and cooks. The starting salary at Dirt Candy is $15 an hour, nearly twice the minimum wage in New York ($8.75), and three times the minimum wage for food service employees ($5) who get tips.

 

"Everybody works for me," said Cohen. "I should be the one to pay them."

 

It sounds so simple. But for her, the attempt to change tipping culture isn't just an economic issue; it's also an emotional one.

 

"The idea that if you get bad service, you get to punish the server - that's awful," said Cohen. "All the negative comments have been, 'But what if the service is bad?' And my response is: 'Then complain, say something to the manager, let the restaurant take care of it.' Not, 'I'm going to decide how much I'm going to pay you for your job.' Nobody works that way except servers."

 

Why do we tip?

 

As international travelers know, you don't tip servers in many other countries around the world, where they're more likely to be paid a living wage. That has led some U.S. restaurateurs to adopt the practices of their home countries: Because servers in Japan do not accept tips, Riki, an izakaya tucked away near Grand Central Station in New York, has signs posted at each tatami table that say: "Riki Restaurant is now a non-tipping establishment. Tipping is not required nor expected."

 

In the United States, tipping wasn't prevalent until after the Civil War, and even then it was considered a vestige of Old Europe and wasn't widely embraced. Back then, a few coins were all it took, and they were given at the beginning of the meal. An old story attributes the word "tip" to an acronym in British coffeehouses, where coin bowls had signs that said "To Insure Promptitude."

 

The average tip has increased over the decades, which is why you might find yourself sneaking an extra $10 onto the table after your 85-year-old uncle treats you to dinner and stiffs the server. The 10 percent tip that was the average in the 1940s has increased to a standard 20 percent.

 

But if tips are to reward good service, shouldn't we tip at the beginning of the meal? When you tip at the end, and you know you'll never see that waiter again, why do it at all?

 

Tipping boils down to guilt, says Michael Lynn, a professor of consumer behavior and marketing at Cornell University's School of Hotel Administration. "I personally believe that most people tip because of social expectations, and they want to avoid the disapproval that comes from violating that - which means they're giving up money not to get anything, but to avoid a negative outcome," said Lynn. "That suggests to me that overall, they would be better off if they didn't have to tip at all."

 

Guests might think their tip reflects the service, but Lynn's studies have found that most diners tip the same percentage, whether it's 15 or 25 percent, every time they eat out. Therefore, studies have found, the best way a server can guarantee a night of good tips isn't to provide the most personalized, meticulous service to a small number of tables and hope for a big tip from each; it's to turn as many tables as possible, even if it leads to slightly worse service for everyone.

 

That strategy "makes you less of a team player and more cutthroat," said Nathan Wilkinson, who tends bar at the Crystal City McCormick and Schmick's. "You want to bring in as much business for yourself, even to the point where you can't handle it all. People go away feeling like they got bad service because you tried to take on too much."

 

Some industry veterans object to the very idea of a customer-dependent salary. Server performance, they believe, should be evaluated and rewarded solely by the restaurant's management, rather than making every table into a mini HR department.

 

When you stiff waiters for bad service, you might be penalizing them for something that's not their fault, such as a backed-up kitchen. And you might be stiffing the rest of the staff, too: Many restaurants pool tips, and servers give a share of their tips to busboys and bartenders, and sometimes even the dishwasher and hosts. At corporate restaurants that electronically track and report tips for tax purposes, employees may be taxed on the full amount of the night's tips, even though they have to distribute a portion of them to other staff members. Some restaurants also take credit card transaction fees out of their employees' tips.

 

Working at a restaurant with set wages, said Wilkinson, would eliminate uncertainty. And even though he could potentially make less money, he said it's a system he would be willing to adopt right away.

 

"It's like always betting on the winning horse," he said. The way it is is now, "there might be nights where I do really well, but for the most part, I fall below $100 a night."

 

If a restaurant eliminated tipping and paid good wages, he said, "It would make people feel good about eating there."

 

Shifting the burden

 

Sometime this spring, Bill Perry will quit his job as a librarian for a nonprofit organization to open the Public Option, a neighborhood restaurant and brewpub coming to 16th Street and Rhode Island Avenue NE this summer. He will start servers' salaries at $15 an hour - more than the city's $9.50 minimum wage and five times its tipped minimum wage (what servers can be paid if their pay-plus-tips meets or exceeds the standard minimum wage) of $2.77. Tips will be strongly discouraged. Any money left behind by guests will be donated to a charity of the staff's choosing.

 

"The idea is to get away from shifting compensation to the consumer," said Perry. "What I'm hoping to do with tipping, and more broadly with this whole experiment, is to participate - in a very small way, of course - in the evolution of the market economy."

 

Rather than tack a service charge or administrative fee onto the bill, Perry said, he will price his drinks and dishes about 15 to 20 percent higher but will still keep them in the range of similar restaurants in the area. Diners "probably won't save much, but they certainly won't pay any more," he says.

 

According to Lynn's research, that's not necessarily how the public will see it. "Basically, consumers judge restaurant expensiveness on menu prices and don't take into account tips or service charges," said Lynn, "So if you eliminate tipping and replace it with service-inclusive menu pricing, you're going to be perceived as more expensive."

 

That's not a problem at places that don't shy away from an exclusive reputation, such as Per Se in New York and Alinea in Chicago. But in Philadelphia, when restaurant Girard opened with service- inclusive pricing, making dishes 15 percent more expensive in the process, it was pummeled by Philadelphia Inquirer critic Craig LaBan for its high prices and ambiguous tip policy. "I believe Philadelphians would pay higher menu prices instead of tipping if the extra cost was transparent," he wrote.

 

At Dirt Candy, Cohen opted not to build the price of service into her food because she worried guests would be turned off.

 

"You're going to walk by and look at my menu and be like: 'The portobello mousse is $18. That's way too expensive for an appetizer,'" said Cohen, "and I can't run out and explain to everybody: 'No! Don't worry, there's no tipping!'?"

 

Cohen's perspective was shaped by years working as a cook. In her first job, she said, she made $8 an hour. She would finish a long shift and watch servers who had worked fewer hours rake in $40 an hour on good nights.

 

"I wanted to figure out a way that I could .?.?. bring up the back of the house's wages without taking away too much from the servers, to make a much more even system," she said.

 

She consulted with labor attorneys to craft her current system, which uses the term "administrative fee" for legal reasons: Had she called it a "service charge," that money could be distributed only to those along the chain of service, which excludes cooks.

 

Eventually, though, she plans to eliminate the administrative fee and raise the cost of her dishes, because she says menus should reflect the true price of eating out. One reason the tip system has survived for so long, Cohen said, is that to remain competitive, restaurants must keep prices artificially low - which they can afford only if they farm out their labor costs to consumers.

 

"It's just a false system, or a lie," she said.

 

The motivational effect

 

As proposals to increase the minimum wage are considered and adopted around the country, Cohen believes more restaurants will eliminate tipping as they are forced to budget for salaries that may be twice what they've traditionally paid.

 

"I do think servers should make a fair minimum wage, but with tips included in that, this system seems really broken," she said. "I think everybody will sit down, do their books and say, 'If I just take the money in and redistribute it, that makes a lot more sense.'?"

 

Would a mandatory service charge result in a decline in the quality of service? Lynn said his research shows that, in restaurants with conventional tipping systems, tips don't necessarily motivate waiters to perform better. But when he compared Miami Beach restaurants that have service charges against those with conventional tips, his research indicated that customers perceived the former to have worse service than the latter. That's because merely the notion of a link between tipping and service is enough to influence servers' and customers' perceptions, Lynn says.

 

Whether perception or reality, this is the sort of effect chef Robert Wiedmaier worried about when he considered abolishing tipping 10 years ago at Marcel's, his fine-dining restaurant in Foggy Bottom.

 

"Sometimes it's human nature that if you don't have to work for a tip, maybe you decide you don't work as hard," he said. "You're already getting your money."

 

Wiedmaier, who abandoned the plan, also knew that not all of his waiters would be eager to try it. While Wiedmaier said his captains make around the tipped minimum wage, the pricey menu and fine wines produce lucrative tips for his waiters, who he said make as much as $100,000 a year. Sometimes they'll benefit from the largess of big spenders, such as a table that left a $10,000 tip on a $32,000 bill in 2012.

 

"I was going to pull the trigger and do it, and most of my wait staff was up for it, but at the last minute I decided not to because we just weren't ready at the time," he said.

 

Watching and waiting

 

The move to eliminate tips is small: It encompasses a handful of restaurants across the country and some outspoken advocates such as San Francisco Chronicle restaurant critic Michael Bauer.

 

Lynn says tipping is too ingrained in restaurant culture to go away. "You could add a service charge, but my guess is that people would start tipping on top of the service charge, and that would create social pressure on others to tip, and eventually you would have regular tipping on top of the service charge," he said.

 

Cohen, on the other hand, predicts the idea will spread.

 

"I've had a lot of restaurateurs come up to me and say, 'We're just going to watch what happens with you, and if it works for you, then I think we'll try something similar,'?" she said. In the meantime, she has had no complaints from diners in person, and only a few online.

 

"One of the things that I realized .?.?. was that no matter how much we explained it, people have to see that it's going to work, and talk to my servers," she said. "I'm not forcing anybody to work for me. This isn't a labor camp. People are here because we've explained it to the servers, and they're excited, and they want to be a part of this system."

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Illinois Attorney Targeting Wineries 

Tuesday, April 14, 2015 12:47:00 PM

Source: Gaw Van Male

By Erik Lawrence

April 9, 2015

 

Beginning in the middle of 2014, Illinois attorney Stephen Diamond began suing wineries that ship wine directly to consumer in Illinois.  Mr. Diamond argues that wineries should pay sales tax on the shipping fees it charges to Illinois consumers for direct shipments of wine.  These are so called "Qui Tam" lawsuits that allow private citizens to sue on behalf of the state and collect a bounty if the state collects.

 

Whether shipping charges are taxable in Illinois is not clear.  Wineries have historically relied on individual facts and circumstances to determine whether sales taxes are due on shipping charges.  Some of these include whether shipping is listed separately on invoices, whether the consumer has an option to pick-up wine ordered online at the winery or whether the winery has marked up shipping charges.  After the Illinois Supreme Court's decision in Kean v. Wal-Mart Stores, Inc., 235 Ill. 2d 351 (2009), the Illinois Department of Revenue appears to have taken the position that all shipping charges on internet purchases are taxable.

 

Mr. Diamond appears to be proceeding against wineries in descending order of size in waves.  His first wave of lawsuits against some of the largest wineries in the industry began in the middle of 2014 and his second wave against somewhat smaller wineries began in late 2014.  We are now hearing from mid-size wineries that Mr. Diamond has begun a third wave of lawsuits in the spring of 2015.  The Wine Institute has been lobbying the Illinois legislature to clarify when sales tax is due on shipping charges, but that process will take some time.

 

We have two immediate recommendations for our winery clients: Recommendation # 1: Do not accept any orders from, or ship wine to, Stephen Diamond or his associates Matthew S. Burns and Matthew Martin, in Illinois; Recommendation # 2: Until the rounds of lawsuits cease, or the Wine Institute succeeds in finding a legislative solution, or both, charge sales tax on shipping charges for internet orders in Illinois.

 

If you have any questions, or if you have received a complaint from Mr. Diamond, please feel free to contact Erik Lawrence at (707) 252-9000 or elawrence@gawvanmale.com.

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Satellite TV operators warn of tax on consumers 

Monday, April 13, 2015 3:06:00 PM

SPRINGFIELD — Satellite television providers and installers issued a warning Monday: Illinois lawmakers are again considering a special tax that could raise the price of Dish network and DIRECTV.

Although legislation calling for a tax on satellite users has yet to be introduced, coalition members said they are worried an increase could be in the mix to help pay for a statewide road, bridge and school construction program this summer.

"We have very price sensitive customers," said Lisa Volpe McCabe, public policy chief for the Satellite Broadcasting and Communications Association. "We don't want this unfair tax to diminish the services the satellite industry provides their loyal consumers statewide each and every day."

The idea of taxing satellite TV in a way similar to cable television has been percolating in the Statehouse for at least three years. The cable industry says it would level the field for companies like Comcast and Frontier, who pay franchise fees to operate within communities.

Joe Handley of the Cable Television & Communications Association of Illinois said the tax would put the two kinds of businesses on equal footing.

"When you turn on the TV, you don't know the difference," Handley said. "It's just a matter of fairness."

In 2012, the Illinois Senate approved an increase that would have raised $75 million for schools. The measure was not taken up in the House.

Lawmakers also floated the tax in 2013 to pay for incentives designed to keep Archer Daniels Midland from moving its global headquarters out of Illinois.

The satellite industry argues the tax would be unfair because satellite companies don't use public right-of-ways like cable companies. And, they said it would hurt rural Illinoisans who don't have access to cable services.

"Satellite television is a necessity, especially for downstate rural areas where it is the only available option for businesses and families," said Dan Clausner, executive director of the Illinois Licensed Beverage Association.

In all, the industry said it serves 1.3 million households in Illinois, which represents about one third of the homes that subscribe to television.

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SBCA Press Conference (Business & Industry Satellite TV Tax Opposition) -  

Monday, April 06, 2015 1:59:00 PM

04-06-2015 SBCA Press Conference (Business & Industry Satellite TV Tax Opposition) - http://livestream.com/blueroomstream/events/3941065


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DISCUS statement in response to the American Journal of Public Health study on Illinois Alcohol-Related Traffic Fatalities and Tax Impact 

Monday, April 06, 2015 9:42:00 AM

Source: DISCUS

April 2, 2015

 

Statement by David Ozgo, Senior Vice President for Economic and Strategic Analysis for the Distilled Spirits Council, in response to the study, "Effects of a 2009 Illinois Alcohol Tax Increase on Fatal Motor Vehicle Crashes" in the American Journal of Public Health:

 

This is a classic case of advocacy researchers cherry-picking data to get sensational, but misleading, results.  A closer look at the data shows that Illinois alcohol-related traffic fatalities were on a downward trend before the tax increase.  In fact, the largest annual decline over the last eight years occurred in 2008, the year before the tax rate changed.  Importantly, Illinois alcohol-related traffic fatalities declined faster than the national average before the tax increase and this has not been the case since the tax increase. 

 

Repeated studies, including research by the National Institute on Alcohol Abuse and Alcoholism, have shown that alcohol abusers are not deterred by higher prices.  It is the moderate, responsible consumers who are most sensitive to prices and are the ones that cut back the most when prices increase.  

 

According to the Federal Dietary Guidelines, moderate alcohol consumption is associated with a lower risk of cardiovascular disease, the leading cause of death in the United States.  Additionally, a 2011 CDC study cited moderate alcohol consumption as one of four healthy lifestyle factors that help people live longer. 

 

The nation's distillers are totally opposed to drunk driving and have a long history of supporting comprehensive anti-drunk driving measures.  Working together as a society, important progress has been made. Drunk driving deaths have declined 52% over the past two decades from 21,113 in 1982 to 10,076 in 2013.

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Illinois: Road deaths fell significantly following alcohol tax increases, say researchers 

Thursday, April 02, 2015 4:50:00 PM

Source: MNT

1 April 2015

 

Increasing alcohol taxes across the US could prevent thousands of deaths from motor vehicle accidents every year, say researchers who conducted a study that showed a rise in alcohol taxes in one particular state was followed by a significant reduction in alcohol-related fatal car crashes.

 

Researchers from the University of Florida (UF) found that after Illinois increased taxes on beer, wine and spirits in 2009, there was a 26% fall in car crashes involving alcohol.

 

They report their findings in the American Journal of Public Health

 

The reduction in alcohol-related fatal car crashes was greatest among young people, say the researchers, who found in this group deaths fell by 37%.

 

In August 2009, the state of Illinois put up tax on beer by 4.6 cents a gallon, on wine by 66 cents a gallon and on distilled spirits by $4.05 a gallon. If all of this tax is passed on to the consumer, it adds 0.4 cents to the cost of a glass of beer, 0.5 cents to the cost of a glass of wine and 4.8 cents to the cost of a shot of spirits.

 

Introducing similar tax rises across the US could save thousands of lives, urges first author Alexander C. Wagenaar, a professor in the department of health outcomes and policy at the UF College of Medicine.

Inflation 'has eroded the effect of alcohol taxes'

 

If you take inflation into account, taxes on alcoholic drinks in the US have fallen substantially, helping to make the beverages significantly more affordable than they were 50 years ago.

 

The researchers suggest this has contributed to America's widespread drinking and driving problem.

 

In the US in the 1950s, the average person would have to set aside about half of their disposable income to afford more than 10 drinks a day. In 2011, 10 drinks a day is about 3% of the average person's disposable income. Prof. Wagenaar notes:

 

"If policymakers are looking to address dangerous drivers on our roads and reduce the number of fatalities, they should reverse the trend of allowing inflation to erode alcohol taxes."

 

Every year, around half a million people are injured and nearly 10,000 die in the US because of alcohol-related motor-vehicle crashes.

Decrease in fatal crashes was due to tax changes and not other factors

 

For their analysis, the team used data on fatal crashes in Illinois between January 2001 to December 2011 recorded by the National Highway Traffic Safety Administration.

 

They examined the patterns of fatal crashes in the 104 months before and in the 28 months after the new alcohol taxes were brought in.

 

The details in the Illinois car crash data allowed them to analyze the effect of the tax change in terms of driver's age, gender, race and level of blood alcohol measured at the time of the fatal crash.

 

For the study, the team defined a blood alcohol level of under 0.15% as impaired driving, and above this level as drunken driving.

 

A blood alcohol level of 0.15% is roughly the level an average adult has after drinking six alcoholic drinks in 1 hour.

 

The team adjusted the results to take into a number of other factors than can influence motor vehicle crashes, including traffic safety programs, economic conditions and the weather.

 

In their analysis they compared the number of alcohol-related fatal crashes with those not involving alcohol in the same period, for Illinois, and also compared the results with a similar analysis of crashes in Wisconsin, a state that had not introduced any tax changes.

 

The adjusted results and interstate comparisons confirmed that the decrease in fatal car crashes was due to the tax changes and not other factors.

 

The researchers suggest a reduction in disposable income - as a result of the Great Recession - may have contributed to the larger than expected effects of such a modest tax increase.

Results contradict belief that heavy drinkers ignore tax rises on alcohol

 

The researchers found the reduction in crashes involving alcohol-impaired drivers (22%) was very similar to those involving extremely drunken drivers (25%).

 

Prof. Wagenaar concludes:

 

"While our study confirms what dozens of earlier studies have found - that an increase in alcohol taxes reduces drinking and reduces alcohol-related health problems, what is unique is that we identified that alcohol taxes do, in fact, impact the whole range of drinking drivers, including extremely drunk drivers."

 

He says this finding has "powerful implications for how we can keep our communities safer," and contradicts what many economists say - that heavy drivers are less likely to respond to tax changes.

 

Meanwhile, Medical News Today recently reported a study by researchers at the University of Michigan Injury Center that found fitting a breathalyzer interlock system to new cars could prevent 80% of drunk-driving deaths. The system is designed so that before they can start the car, the driver has to breathe into the device, which is fitted on the dashboard and measures their blood alcohol content (BAC). If their BAC is above the legal limit - which varies by state - the vehicle will not start.

 

Written by Catharine Paddock PhD

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