Business Losses Brought About by Underage Drinking Laws
The 21 Minimum Legal Drinking Age was recommended by the Presidential Commission on Drunk Driving as appointed by President Ronald Regan. The recommendation was soon transformed into law and it has been known as the National Minimum Drinking Age Act of 1984. On July 1, 1998, this was adopted nationwide by all of the 50 states. The direct effects of such law was relatively good, as it reduced the number of traffic accidents arising from drunk driving and there were lesser instances of deaths and injuries related to other alcohol-related situations (Roach et al 90).
The law had certainly created a big impact on the alcohol market and business. The Minimum Legal Drinking Age Law had slashed off as much as 25% in profits from local bars and tavern owners operating in and around the United States. This loss of profit sustained by retailers and distributors of alcoholic beverages has to be recovered in some way – and so the price of beer and drinks were slightly raised by 1%.
As much as alcohol beverage producers would like to increase the price of a drink, research had shown that the higher the price an alcoholic beverage is, the actual number of drinks consumed by habitual drinkers relatively decrease, especially in the younger population category. This alone proves to be a dilemma for alcohol-related businesses (Leung et al 28). In the same study conducted by Monitoring the Future, Figure 2 shows the trend that 8th, 9th, and 10th graders confirms the availability of acquiring alcoholic drinks from retail shops, bars, and even convenience stores.
The data reflected on this figure commences in 1992, six years before the National Minimum Drinking Age Act of 1984 was adopted across America. From 1998 to 2006, the percentage of students that say alcohol is fairly easy or is very easy to acquire is steadily falling, although the value is still above 80%, at least for 10th and 12th graders. This only goes to show that the National Minimum Drinking Age Act of 1984 is indeed creating negative effects on the alcohol related businesses.