Alcohol Regulation: Moral Issue or Economics Issue?

In recent weeks, there has been talk of privatizing Utah’s liquor stores.  Most likely, this debate has gained traction with the announced closure of 10 state liquor stores (one closed, but the other nine will remain open). 

Photo credit: David Shankbone

As some people have suggested, store closures would have a direct impact on those who work at state liquor stores and on those who frequent them, but the idea of privatizing liquor stores, and alcohol regulation in general, certainly involves many other considerations.

Rep. Ryan Wilcox (R-Ogden) is working to craft a proposal that would privatize state liquor outlets.  Wilcox argues that “this isn’t a moral issue at all.  This is economics.”  According to him, despite earning morethan $100 million in profit through state-controlled liquor stores last year, the state has no business being in the liquor business.

Wilcox’s proposal would allow the state to continue distributing alcoholic beverages but would require it to sell its retail stores to private operators.  Wilcox asserts that his proposal would not cause the state to lose tax revenue but would allow the market, not politics or budgets, to determine the success or failure of liquor stores.

When the numbers are crunched, perhaps privatizing liquor stores would make economic sense, but are there other factors involved?  For example, many people assert that Utah’s regulation of liquor is necessary and proper to discourage overconsumption, a vice that inflicts real harm on individuals, families and communities.

But does this “moral” consideration outweigh economic ones?  Or can the state privatize liquor sales and still discourage overconsumption to the degree it does now?  Should Utahns be free to consume any quantity of alcohol they would like at any place or time they would like?  What role, if any, should government have in regulating, taxing, distributing or selling alcohol?

Presumably, these questions and many others will arise as this debate continues.