As you stand on an adjacent catwalk, you gaze across and up and down the enormous rows of industrial racks stacked full of boxes labeled “fragile.”  The computerized forklifts swiftly, poetically move back and forth (nearly silent), up and down, each fork meticulously plucking product from a predetermined position.  Gently they place the boxes on a conveyor belt and the product rapidly moves to a distribution point and is loaded on unmarked trucks.

This process happens hundreds of times a day at the ABC warehouse in Salt Lake City.  One would think this computerized delivery system was designed to provide companies with high-tech components, or better yet, medical supplies to save the lives of thousands throughout the world; but instead, this system is a mechanized, computerized, state-of-the-art delivery system designed solely to satisfy the thirst of Utah drinkers.

The ABC (Alcohol Beverage Control) regulates the manufacture, sale, and use of alcoholic beverages by licensing on-premise businesses, manufacturers, wholesalers, importers, and liquor representatives.  Utah is one of 18 liquor control states and one of two totally state-run systems.  The department operates 37 state stores and about 88 package agencies which are exclusive retailers of liquor, wine, and heavy beer in the state.  (Source: 2006-2007 APPROPRIATIONS REPORT, Utah Legislature, p. 69)

As a member of the Commerce and Revenue Appropriations Sub-Committee, I annually review the budget of the ABC.  Twice I have been to their facility, just west of I-15, in Salt Lake City.  As government agencies go, this is one of the most impressive–mechanistically and administratively.  It’s run like a private sector business.  And, that’s where the problem comes in.  Government running just like the private sector.  This is a good time for the Constitutional argument, you know the one about the government not competing with private sector operations.  That’s a valid argument, except, there is no private sector competition.  By statute, the Legislature has eliminated the competition.

Why?

Why is it necessary for us to regulate alcohol consumption and distribution in Utah? (Or anywhere for that matter.)  We’ll let the facts speak for themselves.

[Just a side note:  Appropriations for FY07 to run this system were $24,600,000 from the Liquor Control Fund.  Requests for appropriations by the ABC included $1.169 million for growth and new store needs.  Alcohol consumption has increased significantly over the past decade.  However, increases in consumption rates in Utah do not necessarily coincide with higher alcoholism rates or alcohol related driving fatalities—at least when compared to federal averages.  The latest, accurate national statistics I will use are from 2003.]

First, the CDC released statistics for 2003 showing Utah as the 2^nd lowest state for average daily consumption for “HEAVY DRINKERS.”   Heavy drinkers defined as adult men having more than two drinks per day and adult women having more than one drink per day.  The State of Utah was 2.7%.  Tennessee was the lowest at 2.2%.  The highest was Wisconsin at 8.6%.

So, even though alcohol sales are up 62% over the past decade, this doesn’t seem to have effected Utah’s remarkably low heavy drinkers status.

A number of statistical reports are available for the next statistic.  They all seem to be relatively close.

Second, Alcohol Alert reports on drinking and driving fatalities for 2003.  Utah is last when it comes to alcohol related fatalities.  Only 15% of all traffic/transit related fatalities involve alcohol consumption.  This is 15% lower than the next closest states of Kentucky and Georgia, at 30%.  And, 25% below the national average of 40%.

Third, our state’s Legislature has allocated large appropriations for alcohol awareness campaigns.  In 2006, SB58 “Alcohol Beverage Amendments—Eliminating Alcohol Sales to Youth” allocated $1,631,300 of one-time General Fund dollars for a media campaign to reduce underage alcohol consumption in Utah.  Private industry, unless mandated by the government or onerous litigation, would not be inclined to budget a figure of this magnitude to curtail the problem of underage drinking.

So, it appears as long as we are inclined to legislatively manage our alcohol distribution and consumption as a state (which is still a questionable practice in my mind), the boys down at the ABC seem to be doing a fine job—Cheers To You!

* Based on Operating Revenues for Retail and Military Sales figures.  Figure does not include Cost of Goods Sold, Operating, or Other Expenses.