Company-Specific Revenues From Underage Drinking

Source:

Eck, R. H., Trangenstein, P. J., Siegel, M., & Jernigan, D. H. (2021). Company-specific revenues from underage drinking. Journal of Studies on Alcohol and Drugs, 82, 368-376. doi:10.15288/jsad.2021.82.368

Abstract

Objective:

Alcohol is the most commonly used illegal drug among U.S. high school students. This study aimed to estimate the proportion of drinks and sales revenue accruing to alcoholic beverage companies that were attributable to underage consumption in 2011 and 2016.

Method:

We used national survey data to estimate the number of adult and underage past-30-day drinkers, median volume of alcohol consumed, beverage preferences, and alcohol price by beverage type. We used Impact Databank to determine the total number of alcoholic drinks sold. After adjusting for underreporting, we applied the percentage of alcohol reported to be consumed by underage youth on surveys to the alcohol sales data by beverage type and assigned a beverage-specific cost.

Results:

Underage youth drank 11.73% of the alcoholic drinks sold in the U.S. market in 2011 and 8.6% in 2016. Total sales revenue attributable to underage consumption was $20.9 billion (10.0%) out of a total of $208.0 billion in 2011 and $17.5 billion (7.4%) out of $237.1 billion in 2016. Three alcoholic beverage companies represented nearly half (44.7%) of the market share of beverages consumed by underage youth.

Conclusions:

Despite the alcoholic beverage industry's stated commitment to reducing underage drinking, significant revenues appear to accrue from this activity. This presents an opportunity to enact and enforce policies—such as alcohol taxes or required company funding of independently managed youth drinking prevention initiatives—that recover these revenues from the industry and use them to help achieve the goal of preventing youth alcohol consumption.