(Reuters) – U.S. states that have a monopoly over their liquor sales seem to charge slightly more for alcohol than states without such control, the so-called “license states,” according to a U.S. study.
As of February 2012, 18 control states in the United States set the price of liquor sold to their retail stores, and 13 of those also set the price for the general public. The other states sell liquor licenses to private businessowners, who set their own prices.
“We found that the average price of liquor is lower in license states. It was on average $2 lower per product, which is a 7 percent difference,” said lead author Michael Siegel, a researcher from the Boston University School of Public Health.
Generally, in states and area that have considered putting control of liquor prices in the hands of private businesses, the public has supported privatization.
But the researchers note that while control states tend to charge slightly more for liquor, they also make a lot more money from their liquor sales.
“When legislators look at privatization, they just don’t know how they’re going to make up themoney,” said William Kerr, of the Public Health Institute’s Alcohol Research Group in Emeryville, California, who was not involved with the research.
The study, which appeared in the journal Addiction, compared the prices of 74 popular liquor brands in the 13 retail control states and 50 private stores in license states, finding that the prices varied by brand.
But not all liquor prices were more expensive in control states. The researchers found that 21 brands were, on average, more expensive in license states.
Siegel told Reuters Health that the average price difference between control and license states may be enough to influence how much people drink.
“There is convincing evidence in the literature that control states have lower alcohol consumption than the license states,” he said.
He and his colleagues also wrote that control states have been found to have lower rates of heavy drinking and underage alcohol-related deaths. But that may be due to other reasons, such as access to alcohol and law enforcement.
Past research has found that license states tend to have more liquor stores in one area, which the researchers say would be expected to drive down prices.
Control states may also have higher prices because they have costs that aren’t paid for by license fees or liquor sales taxes – both of which are collected by license states.