Washington State House Bill 2040 would
-- permit, under certain conditions, financial interests between liquor manufacturers, distributors, and retailers (the three tiers of liquor control).
-- authorize liquor manufacturers and distributors to provide promotional items to retailers.
-- eliminates the mandatory ten percent minimum mark-up for beer and wine manufacturers to charge distributors and for distributors to charge retailers.
From an underage drinking prevention standpoint, this legislation is troubling.
The Food Marketing Institute recognizes that "low markup to stimulate high volume is the fundamental principle of mass merchandising." What this means is that eliminating the mandatory 10% markup on alcohol will create cheap prices that help the alcohol industry push high volumes. Research shows that higher alcohol prices reduce underage drinking rates. In fact, prevention advocates push for increasing alcohol taxes as a proven way to reduce underage drinking.
Promotional items are forms of advertisement. The impact alcohol advertising has on children should be considered when debating this bill. A brand new study by Dartmouth College shows that teens who own alcohol-related hats, t-shirts, and posters are more likely to become binge drinkers.