Alcohol companies

Commentary: Alcohol companies make $17.5 billion a year from underage drinking, while prevention efforts run out of money

Alcohol remains the drug most consumed by high school students. According to the Centers for Disease Control and Prevention, each year approximately 3,500 people under the age of 21 die from alcohol consumption.
I have studied the relationship between alcohol marketing and youth drinking behavior for the past 20 years. In 2011, my colleagues and I conducted what, to our knowledge, was the first and only survey of the specific brands of alcohol underage drinking. We surveyed 1,032 young drinkers across 898 brands of alcohol to find out what the underage alcohol market looks like.
In a new article published June 9, 2021, my colleagues and I combined our survey data with the latest available information on alcohol consumption among adults to estimate the percentage of all alcohol sold in the United States that was consumed by young people. Then we were able to calculate how much money underage drinkers spend and, importantly, which companies earn that money.
Who Makes Money From Underage Drinking?
In 2016, the most recent year for which market research and government data were available, the total value of alcoholic beverage sales in the United States was approximately US$237.1 billion. Using our 2011 youth market model and our alcohol price database, we were able to estimate retail sales of youth consumption for 2011 and project them to 2016. In total, we estimate that young people under the age of 21 accounted for 8.6% of youth consumption. drinks consumed and 7.4% of dollars spent, since young people buy cheaper alcohol. This translates to $17.5 billion. Although underage drinking has been steadily declining since 2002, it remains a substantial source of revenue for these companies.
According to our 2011 survey, the top 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 the alcoholic beverages consumed by young people. Anheuser-Busch InBev accounted for 21.2% of those drinks, of which they earned $2.2 billion. MillerCoors sold 11.1% of the alcohol, earning $1.1 billion. Spirits and beer maker Diageo also sold 11.1% of beverages consumed by young people and, as alcohol tends to be more expensive per glass than beer, it earned $2 billion from consumption. of minors.
Income from underage drinking could be put to good use
The brewing industry trade association, the Beer Institute, says that “the American beer industry has been dedicated to preventing illegal underage drinking for more than three decades.” They go on to say that companies are doing their part to ensure advertising is aimed at adults, educating parents and students about underage drinking, and encouraging stores not to sell alcohol to minors.
However, numerous studies have shown that the actions of alcohol companies to prevent alcohol-related harm are ineffective. Our research clearly demonstrates a conflict of interest: these companies literally make 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 the Institute of Medicine released a major report on reducing underage drinking. They recommended that all segments of the alcohol industry that profit from underage drinking invest 0.5% of total company revenue in an independent, nonprofit foundation dedicated to reducing alcohol use. and prevention of alcohol consumption among minors. In 2016, this would have represented, for example, $78 million from Anheuser-Busch InBev. This money could go a long way in supporting community groups trying to implement evidence-based strategies such as reducing the density of stores that sell alcohol, increasing alcohol taxes and strengthening enforcement of laws on illegal sales to minors.
But no independent fund was ever established, and the liquor companies themselves continue to control the money they contribute to preventing underage drinking, spending much of it on prevention efforts. “corporate social responsibility” that do more to promote their products than to prevent harmful consumption.
Meanwhile, federal funding specifically dedicated to preventing underage drinking is minimal. The president’s most recent budget recommended just $10 million for grants to community coalitions working on underage drinking. Additionally, following a major liquor tax reduction passed in 2017 and made permanent in 2020, liquor companies are contributing less to the federal budget than ever before.
I believe that because of their conflict of interest, alcohol companies cannot be trusted to spend prevention money effectively. The billions these companies make from underage drinking is money the prevention field could really use. A system, independent of industry, that collects and allocates this unwanted revenue might be a better way to channel it to local communities and help reduce and prevent underage drinking.

The Conversation is an independent, nonprofit source of news, analysis, and commentary from academic experts.

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