Potential consequences of replacing a retail alcohol monopoly with a private licence system: results from Sweden

Abstract

To examine the potential effects of replacing the Swedish alcohol retail system with a private licensing system on alcohol consumption and alcohol-related harm. Two possible scenarios were analysed: (1) replacing the current alcohol retail monopoly with private licensed stores that specialize in alcohol sales or (2) making all alcohol available in grocery stores. We utilized a multiplicative model that projected effects of changes in a set of key factors including hours of sale, retail prices, promotion and advertising and outlet density. Next, we estimated the effect of the projected consumption increase on a set of harm indicators. Values for the model parameters were obtained from the research literature. Measures of alcohol-related harm included explicitly alcohol-related mortality, accident mortality, suicide, homicide, assaults, drinking driving and sickness absence. According to the projections, scenario 1 yields a consumption increase of 17% (1.4 litres/capita), which in turn would cause an additional 770 deaths, 8500 assaults, 2700 drinking driving offences and 4.5 million sick days per year. The corresponding figures for scenario 2 are a consumption increase of 37.4% (3.1 litres/capita) leading to an additional annual toll of 2000 deaths, 20 000 assaults, 6600 drinking driving offences and 11.1 million days of sick leave. Projections based on the research literature suggest that privatization of the Swedish alcohol retail market would significantly increase alcohol consumption and alcohol-related harm.