Privatizing Alcohol Sales Will Not Increase Drunk Driving Accidents

September 17, 2010

Currently, Governor Bob McDonnell is promoting a proposal to privatize the sale of alcohol in Virginia. Under this proposal, the state would sell the 332 state-run liquor stores and release as many as 1000 licenses authorizing the sale of alcohol.

The proposal would privatize all aspects of alcohol sales, from wholesale to distribution to retail. As a result, Virginians would be able to purchase alcohol at private liquor stores, convenience stores and grocery stores. The Governor has presented this proposal as a means of improving Virginia roads without raising taxes; revenues generated by the sale of licenses would be devoted to transportation projects.

The proposal has many detractors. Among other things, some opposed to the plan have expressed concerns that privatizing the sale of alcohol will increase the number of drunk drivers on the roads, thereby increasing the number of drunk driving accidents and injuries. Presumably if drivers have more ready access to alcohol, they will be increasingly likely to drive under the influence of alcohol.

Fortunately for those who support the privatization of the industry, this is simply not the case. According to a recent study published by the Virginia Institute for Public Policy, privatizing alcohol in Virginia simply will not increase the number of drunk driving fatalities.

The study compared statistics in the 32 states that have private liquor sales against those of the 18 states that have government-run stores. According to economics Professor Donald J. Boudreaux, principal author of the report, there is no significant difference in drunk driving accidents or binge drinking based on control of alcohol sales.

By way of explanation, Professor Boudreaux noted that drunk driving is not likely to be deterred simply because it is slightly more difficult or more expensive to acquire alcohol. Entering a government-run store rather than a privately run store does not impose a significant burden.

Presumably, the same ideas would carry over to the DUI rates. If the frequency of accidents will not rise significantly, it is reasonable to suggest that the frequency of people driving over the legal limit will also not change.

Of course, the fact that this plan will not increase fatal drunk driving accidents or binge drinking incidents does not necessarily mean that the plan is a good idea. According to a Washington Post analysis of privatization plans in other states, these plans are not often the instance source of revenue generation expected.

Governor McDonnell reportedly expects the privatizing of alcohol sales to generate $500 million initially, along with $250 million annually. However, the two states that fully privatized their retail stores in the past 20 years each made less than $20 million upfront. Generally, states obtain less revenue after privatization.

Article provided by John J. Rice, Attorney & Counselor at Law
Visit us at www.johnjrice.com