Alcohol companies

Alcohol companies earn $ 17.5 billion a year from underage alcohol use, while prevention efforts run out of money

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Alcohol remains the most commonly used drugs among high school students. According to the Centers for Disease Control and Prevention, about every year 3,500 people under the age of 21 die from alcohol consumption.

I have studied the relationship between alcohol marketing and the drinking behavior of young people over the past 20 years. In 2011, my colleagues and I carried out what, to our knowledge, was the first and only survey of what specific brands of alcohol minors drink. We surveyed 1,032 young drinkers of 898 alcohol brands to find out what the underage alcohol market looks like.

In a new article published on June 9, 2021, my colleagues and I combined our survey data with the latest available information on adult alcohol consumption to estimate the percentage of all alcohol sold in the United States. that has been consumed by young people. Then we were able to calculate how much money underage drinkers spend and, most importantly, what companies are making this money.

Two empty red plastic cups next to spilled beer bottles.
Only three companies account for almost half of the alcohol consumed by minors.
MediaNews Group / Reading Eagle via Getty Images

Who makes money drinking underage?

In 2016, the most recent year for which market research and government data were available, the total value of sales of alcoholic beverages in the United States was approximately $ 237.1 billion. Using our 2011 youth market model and our alcohol price database, we were able to estimate the retail sales of youth consumption for 2011 and project them to 2016. In total, we estimate that young people under 21 represented 8.6% of drinks consumed and 7.4% of dollars spent, since young people buy cheaper alcohol. This translates to $ 17.5 billion. While underage alcohol consumption has been steadily declining since 2002, there remains a substantial source of income for these companies.

According to our 2011 survey, the 10 most popular alcohol brands among underage drinkers were Bud Light, Budweiser, Smirnoff Malt Beverages, Smirnoff Vodkas, Coors Light, Jack Daniel’s Bourbons, Corona Extra, Mike’s, Captain Morgan Rums and Absolut Vodkas.

Three companies own most of these drinks and account for almost half – 44.7% – of alcoholic beverages consumed by young people. Anheuser-Busch InBev accounted for 21.2% of those drinks, from which they earned $ 2.2 billion. MillerCoors sold 11.1% of the alcohol, making $ 1.1 billion. Spirits and beer maker Diageo also sold 11.1% of the drinks young people drank – and, as alcohol tends to be more expensive per drink than beer, earned $ 2 billion from the alcohol consumption by minors.

Income from underage alcohol consumption could be put to good use

A sign on a fence saying 'must be 21 to enter.'
Alcohol companies claim to be against underage alcohol consumption, but contribute very little to effective programs aimed at reducing the large market.
Kameleon007 / iStock via Getty Images Plus

The professional association of the brewing industry, the Beer Institute, states that “The U.S. brewing industry has been dedicated to preventing illegal underage alcohol use for more than three decades. “They go on to say that companies are doing their part to ensure advertising is directed at adults, educate parents and students about underage alcohol use and encourage stores not to sell alcohol. to minors.

However, many studies have found that the actions of alcohol companies to prevent alcohol-related harm are ineffective. Our research clearly shows a conflict of interest: these companies literally earn billions of dollars from the very behavior they say they want to prevent.

In response to a congressional request, in 2003, the National Research Council and Institute of Medicine published a major report on reducing alcohol consumption among minors. They recommended that all segments of the alcohol industry that profit from underage alcohol consumption donate 0.5% of the company’s total revenue to an independent, non-profit foundation dedicated to the reduction. and the prevention of alcohol consumption among minors. In 2016, that would have amounted, for example, to $ 78 million from Anheuser-Busch InBev. This money could go a long way to supporting community groups trying to implement evidence-based strategies such as reducing the density of stores selling alcohol, increasing alcohol taxes, and strengthening enforcement of laws on illegal sales to minors.

But no independent fund has ever been established, and the alcohol companies themselves continue to monitor the money they contribute to the prevention of underage alcohol use, spending much of it on underage drinking. “corporate social responsibility” efforts that do more for promote their products than prevent harmful consumption.

Meanwhile, federal funding specifically dedicated to preventing underage alcohol use is minimal. the last presidential budget recommended only $ 10 million for grants to community coalitions working on underage alcohol use. In addition, thanks to a significant reduction in the alcohol tax voted in 2017 and made permanent in 2020, alcohol companies are contributing less to the federal budget than ever.

I believe that due to their conflict of interest, alcohol companies cannot be trusted to effectively spend prevention dollars. The billions these companies make from underage alcohol consumption is money that the prevention field could actually use. An industry-independent system that would collect and allocate such unwanted income may be a better way to channel it to local communities and help reduce and prevent underage alcohol use.

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