A change from public to private sale of wine: results from natural experiments in Iowa and West Virginia.

Several proposals to change the existing structure of state alcoholic beverage control authorities have been advanced over the past 10 years in the United States. Most call for eliminating or substantially reducing the state's role in retail sales of alcohol, particularly distilled spirits and wines. In recent years the states of Iowa and West Virginia eliminated state monopolies for retail sales of wine, and now allow such sales by privately-owned licensed establishments. Using time-series methods, we assessed the effects of these policy changes on the alcoholic beverage market in each state. Privatization was associated with statistically significant increases in wine sales in Iowa and West Virginia, after controlling for an initial stocking effect and broader nationwide trends in alcohol sales in the 1980s. In addition, there was a net increase in absolute alcohol consumed in both states across all beverages (beer, wine and distilled spirits) associated with privatization.