Robin Room
Alcohol Research Group
1816 Scenic Ave.
Berkeley, California 94709
November, 1984

(Published in Swedish in Alkoholpolitik: Tidskrift för nordisk alkoholforskning 2:1-6, 1985. The references have been updated.)

The idea that the state has an interest in the conditions of production and distribution of alcohol can be found in the earliest records of written legislation. The idea that the state should create a monopoly for itself or for a designated agent in some part of the production and distribution of alcohol also has a respectable antiquity (see, for instance, Österberg, 1985; Moskalewicz, 1985). But the idea of an alcohol monopoly motivated at least in part by public health and public order considerations seems to have come on the world stage first in the mid-19th century, in Scandinavia.

In earlier times, the primary motivation for monopolization of commodities by local authorities or central governments had been the raising of revenues. With the central state often lacking the bureaucratic and police means to enforce an excise tax, the auctioning of monopoly rights in a commodity to the highest bidder became a common alternative across much of Europe. With tobacco, for instance, the leasing of a monopoly right in 1608 in Britain reflected James I's subordination of his strong feelings against tobacco to his needs for revenue (Austin 1978, p. 3). The strong and profitable private-monopoly system instituted by Venice in 1659 became a model for the rest of Europe, including the ancien regime in France (Austin 1978, pp. 11, 14). Although the exactions of the "tax-farmers" had been a major grievance of the French Revolution, Napoleon reestablished a tobacco monopoly in 1810, but this time as a government agency rather than as a leased franchise. With its enormous profitability for the state, Napoleon's regie system was widely copied elsewhere in Europe (Austin 1978, pp. 15-16).

What was novel, then, about the idea of governmental monopolization of alcohol, when it began to spread in the latter half of the 19th century, was that revenue was not the only consideration, and often not the primary consideration. Public order and public health motives were the explicit justification for the organization of the first modern alcohol monopoly, set up under municipal license as a non-profit company in the Swedish town of Falun in 1850:

The morals and welfare of the working classes in our community have their worst enemy in the saloon. . . . Little can be accomplished . . . . so long as the right to operate saloons in the city is given to private individuals who personally would profit by encouraging an immoderate use of liquor without respect to regulations governing age or youth, poverty or plenty. . . . The right to operate saloons in Falun . . . is assumed by the company with a view to operating a limited number of public houses under managers who are employed and paid by the company. In these places a close scrutiny will be exercised in order that intemperate drinking may be checked instead of encouraged; . . . and that cleanliness and order will be striven for to the highest degree possible. . . . The company will turn over its net profits for some useful purpose connected with the welfare of the city. (Thompson 1935, p. 13)

Besides their attractions to those concerned with public health and order, with the maintenance of class, gender and ethnic interests, and with public revenues, state monopolies were also often helpful and responsive to domestic agricultural interests (Cahannes 1981), and, in addition, appealed to socialists as a piecemeal measure of nationalization. For many elements of the temperance movement, however, particularly in English-speaking countries, the idea of state monopoly seemed "quite definitely a wet policy", to be vigorously opposed:

for a century we have been building up throughout the civilised world an ever-strengthening case against this Traffic on moral, social, physical, and economic grounds. . . . If the nature of the Trade be what we have always declared it to be, it seems to us that nothing can justify on moral grounds the purchase by the Nation of a business which, when run by private individuals, has earned the moral reprobation of the community. (Heath 1940-41)

Besides prohibition, there were several alternatives to state monopoly in the international literature and policy discussions of the half-century after 1885. The historic British system of "licensing magistrates" and its adaptations in other English-speaking countries provided one model; the license systems adopted by a majority of American states after Repeal tended toward a more centralized version of this system, usually presided over by a specific state alcohol control agency. Another alternative, more congenial to temperance interests as being a step unequivocally in the right direction, was provided by various partial prohibition policies. "Local option", allowing individual localities to vote for local prohibition, became a staple tactic of the temperance movement in the late 19th century in many places. In recent years, local option for prohibition or control has reeemerged as a policy in places as diverse as Alaska and Papua New Guinea. Partial prohibitions could also take the form of a prohibition on particular kinds of alcoholic beverages. Repeal in the U.S., for instance, came fairly close to leaving spirits prohibited (see Hoyt 1929, Henderson 1935). Iceland still prohibits stronger beers. The most widespread -- and most lasting -- success with partial prohibition was the prohibition of absinthe in many European countries before and during the First World War. Absinthe was banned in Belgium and Brazil in 1906, in Holland in 1909, and in Switzerland, the country with the greatest economic stake in absinthe production, by a 1908 national referendum which took effect in 1910 ("Absinth" in Cherrington 1925-1930, Cahannes 1981, Delahaye 1983). In France, it took the crisis of the First World War to bring about a ban in 1915 (Kudlick, 1985). But such attacks on and prohibitions of particular alcoholic beverages tend to be equivocal triumphs for those with a general temperance agenda, since they inherently distinguish "bad" alcohol from a residual category of "good" alcohol. Such a distinction is recurrently tempting in countries with substantial alcohol production interests, since it splits the industry interests and potentially avoids a head-on attack on the most powerful. But even in the case of absinthe, one may suspect that in part the particular beverage was being scapegoated for more general problems of alcohol.

In general international discussions of state alcohol control as an alternative to total prohibition, the arguments for state monopolization for many years tended to set the tone for the debate. In a number of countries, the question of monopolization as a state control mechanism arose anew or for the first time in the interwar period (Levine,1985; Österberg, 1985). Following lengthy prewar and wartime discussions, France finally set up a monopoly of spirits at the wholesale level in August 1919; a similar monopoly was established in Poland in January 1925 ("France" and "Poland" in Cherrington 1925-30). By the 1920s and early 1930s, when there was serious discussion in Canada, Finland and the U.S. of what might replace Prohibition, there was a wealth of experience and a quite substantial literature available on alcohol control measures, including alcohol monopolies, and their advantages and drawbacks (see Levine and Smith 1977). A book such as Catlin's Liquor Control (1931) gives us a sense of the thriving and pragmatically-oriented literature of that time. Within a few years, however, this literature disappeared from sight in the U.S. (and more generally in the English language), as the states settled their alcohol control systems at Repeal and alcohol problems were dropped from the public political agenda. The task of recapturing this hidden history is only now being undertaken.

It is, indeed, a particularly opportune time to uncover and consider the background of the alcohol control systems, set up 50 or more years ago, which in their main outlines still continue in many countries today. Over the years, many of the details of these systems have been worn away in a "ratchet mechanism" of small liberalizations (Mäkelä et al. 1981; Gray, 1982). Thus, throughout North America, liquor by the drink has become legal in many places where it was not, and in several monopoly states and provinces, substantial parts of the retail sale of alcohol have been "liberated" to a much wider network of distribution than the monopoly stores (see Macdonald 1984, Lamarche 1983). Individualized controls through ration-books or purchase-slips disappeared from Sweden, Finland, and Ontario by the end of the 1960s. But it is only now that alcohol control systems as a whole -- and particularly monopoly systems -- have been seriously threatened with dismantlement. The British "Carlisle scheme" was privatized in the 1970s -- anticipating the present Thatcher government's wholesale denationalizations. In Quebec, Pennsylvania (Editorial, 1978) and Ohio (Gerstein, 1984, pp. 44-48), at least, recent years have seen substantial attempts to privatize the monopoly.

The recent political discussions in North America have been almost totally uninformed by empirical knowledge of the history or potential effectiveness of different systems of alcohol control. One reason for this is the extent to which the U.S. alcohol control agencies -- the monopoly systems at least as much as the license systems -- had lost touch with major goals which underlay the founding of their systems (Matlins, Greenberg and Bonnie 1979). Often the main emphasis in monopoly states has been simply on running an efficient and profitable state enterprise. The extent to which many of the systems have functioned in the interest of public health has been more a matter of routinized momentum than of conscious policy choices. As Levine (1985) suggests -- and likewise Moskalewicz (1985), in a different political context -- the motives involved at the inception of the systems were indeed mixed, and often attuned to now-outdated issues and social attitudes. But it is of practical policy significance for the present moment to understand more about the formation and history of the systems, in an international comparative perspective. It is also a crucial moment for those concerned about the public health aspects of alcohol availability to formulate in present-day terms the arguments concerning the potential for public health of state alcohol distribution monopolies.

One thing which is clear from the available information is that the mechanism of a government monopoly on a hazardous commodity does not inherently express public health interests. There are too many contemporary and historical examples of revenue needs or other interests pointing such a monopoly in the opposite direction -- no matter what the governmental system in which the monopoly operates. The French government tobacco monopoly, SEITA, continued well into the 1970s to take as its overriding purpose increasing the sales of tobacco products. As late as 1976, SEITA's director-general was claiming that "the relation between the abuse of tobacco and certain illnesses (cardiovascular disease, cancer) has never been scientifically established" (Lemaire, 1980, p. 52). When the Soviet government's retreat from alcohol prohibition in the early 1920s was climaxed by the reintroduction of 40% vodka in the government shops, Stalin stated frankly that fiscal interests must prevail over public health considerations:

A great many people seem to believe that we can upbuild socialism while we are wearing kid gloves. That is a great mistake, Comrades. If we cannot get any loans, if we suffer from a lack of capital, and if, furthermore, we do not wish to become the enslaved debtors of western European capitalists, . . . then we must find other sources of income. . . . We have to make a choice between debt slavery and vodka. (Barnes, 1932, pp. 229-30)

We have no water, no lights, no schools and no lavatories but the Municipals say they will build us a beerhall. If we drink beer to give profits then one day there will be water supplied for us in taps.
How much beer must I drink before my children can drink water? Do other countries make poor people drink beer to collect money for water? (Hall, 1964, p. 135)

References

Austin, Gregory A. 1978. Perspectives on the History of Psychoactive Substance Use. National Institute of Drug Abuse, Research Issues 24, DHEW Publication (ADM) 79-810. Washington: USGPO.

Barnes, Joseph. 1932. Liquor regulation in Russia, Annals of the American Academy of Political and Social Science 163 (September), pp. 227-233.

Cahannes, Monique. 1981. Swiss alcohol policy: The emergence of a compromise, Contemporary Drug Problems 10:1, pp. 37-53.

Catlin, George E.G. 1931. Liquor Control. London: Thornton Butterworth, Home University Library.

Cherrington, Ernest Hurst, ed. 1925-30. Standard Encyclopedia of the Alcohol Problem. Westerville, Ohio: American Issue Publishing.

Delahaye, Marie-Claude. 1983. L'absinthe: Histoire de la Fee Verte. Paris: Berger-Levrault.

(Editorial). 1978. Why the 'state stores'?, Philadelphia Bulletin, Dec. 7.

Englund, Erik. 1940-41. Disinterested management. Pp. 82-89 in: The Twenty-Second International Congress against Alcoholism, July 30th - August 4th, 1939: Volume of Proceedings. Helsinki: Raittiuskansan Kirjapaino.

Eubank, John Evans. 1971. History of the system, adapted by P.K. Huggins from "Ben Tillman's Baby", pp. 106-215 in: Phillip K. Huggins, The South Carolina Dispensary: A Bottle Collector's Guide and History of the System. Columbia, S.C.: Sandlapper Press.

Frånberg, Per. 1985. The social and political significance of two Swedish restrictive systems, Contemporary Drug Problems 12:53-62..

Gerstein, Dean R., ed. 1984. Toward the Prevention of Alcohol Problems: Government, Business, and Community Action. Washington: National Academy Press.

Gray, James H. 1982. Bacchanalia Revisited: Western Canada's Boozy Skid to Social Disaster. Saskatoon, Saskatchewan: Western Producer Prairie Books.

Hall, Barbara, ed. 1964. "Tell Me, Josephine". New York: Simon and Schuster.

Heath, Cecil. 1940-41. Disinterested management. Pp. 89-95 in: The Twenty-Second International Congress against Alcoholism, July 30th - August 4th, 1939: Volume of Proceedings. Helsinki: Raittiuskansan Kirjapaino.

Henderson, Yandell. 1935. A New Deal in Liquor: A Plea for Dilution. Garden City, NY: Doubleday Doran & Co.

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Hoyt, Franklin Chase. 1929. The grand prize-winning plan, pp. xvii-xx in: Francis J. Tietsort, ed., Temperance -- or Prohibition? The Hearst Temperance Contest Committee. New York: New York American.

Koskikallio, Ilpo. 1985. The social history of restaurants in Sweden and Finland: A comparative study, Contemporary Drug Problems 12:11-30.

Kudlick, Catherine J. 1985. Fighting the internal and external enemies: Alcoholism in World War I France, Contemporary Drug Problems12:159-188.

Lamarche, Pierre. 1983. The impact of "Bill 21" authorizing the sale of wines in the grocery stores in the Province of Quebec. Presented at the annual meeting of the Alcohol Epidemiology Section of the International Council on Alcohol and Addictions, Padua, Italy, June 20-24.

Lemaire, Jean-François. 1980. Le Tabagisme. Paris: Presses Universitaires de France, "Que sais-je?" No. 1859.

Levine, Harry Gene. 1985. The birth of American alcohol control: Prohibition, the power elite, and the problem of lawlessness, Contemporary Drug Problems 12:63-115.

Levine, Harry and David Smith. 1977. A selected bibliography on alcohol control, particularly before and at Repeal. Working paper F71. Berkeley: Alcohol Research Group.

Macdonald, Scott. 1984. Wine in grocery stores: The cases of Idaho, Maine, Virginia and Washington. Presented at the Alcohol Policy Section, 30th International Institute on the Prevention and Treatment of Alcoholism, International Congress on Alcohol and Addictions, Athens, Greece, May 28 - June 1.

Mäkelä, Klaus, Robin Room, Eric Single, Pekka Sulkunen, Brendan Walsh, with 13 others. 1981. Alcohol, Society and the State: I. A Comparative Study of Alcohol Control. Toronto: Addiction Research Foundation.

Matlins, S.M., M.D. Greenberg and R.J. Bonnie. 1979. The Effects of Alcoholic-Beverage-Control Laws. Washington: Medicine in the Public Interest.

Mosher, James and Dan E. Beauchamp. 1983. Justifying alcohol taxes to public officials, J. Public Health Policy 4:4, pp. 422-439.

Moskalewicz, Jacek. 1985. The monopolization of the alcohol arena by the state, Contemporary Drug Problems 12:117-128.

Österberg, Esa. 1985. From home distillation to the State Alcohol Monopoly: Does Finnish alcohol policy possess continuity?, Contemporary Drug Problems12:31-51.

Thompson, Walter. 1935. The Control of Liquor in Sweden. New York: Columbia University Press.

Wolcott, Harry F. 1974. The African Beer Gardens of Bulawayo: Integrated Drinking in a Segregated Society. Monograph No. 10. New Brunswick, NJ: Rutgers Center of Alcohol Studies.

1. Preparation was supported by a U.S. National Alcohol Research Center grant (AA-05595) from the National Institute on Alcohol Abuse and Alcoholism to the Alcohol Research Group, Institute of Epidemiology and Behavioral Medicine, Medical Research Institute of San Francisco. Parts of the following are adapted from an introduction to an issue of Contemporary Drug Problems on "The Formulation of State Alcohol Monopolies and Controls: Case Studies in Five Nations" (vol. 12, pp.1-9, 1985) .