Alcohol beverage companies made an estimated $17.5 billion on underage drinking in 2016, study says

An estimated $17.5 billion of beer and liquor sales in the United States in 2016 was consumed by minors, with the products of three companies – AB InBev, Molson Coors Beverage Co. and Diageo – accounting for nearly 45% of underage youth consumption, a new study found.

“A study of this kind hasn’t been done in some 20 years, and it shows that the alcohol industry is making billions of dollars from the sale of alcohol to minors,” said study author Pamela Trangenstein, an assistant professor at the Gillings School of Global Public Health at the University of North Carolina at Chapel Hill.

The study, published Thursday in the Journal of Studies on Alcohol and Drugs, used national data on self-reported adult and underage drinking from the US Centers for Disease Control and Prevention and other sources. Researchers compared those numbers to industry sales in 2016, which they said was the latest data available, and adjusted for underreporting.

“It’s really shocking that underage drinkers generated $17 billion in alcohol sales as late as 2016,” said nutrition researcher Marion Nestle, a visiting professor of nutritional sciences at Cornell University who has authored numerous books on the politics of the food and beverage industry.

“If we ever needed a reason to toughen up on alcohol policies, this study provides it,” said Nestle, who was not involved in the study.

“It is not in the industry’s interest to moderate underage use in any way; that is where their future profits lay,” said Paul Gruenewald, scientific director of the Prevention Research Center of the Pacific Institute for Research and Evaluation, who also was not involved in the study.

“Demand is insured by getting youth to start drinking as early in their lives as possible, providing constant demand throughout the life course,” said Gruenewald, who has researched the availability of alcohol since the late 1980s.

Underage access to alcohol still a problem

The study, which was sponsored by the National Institute on Alcohol Abuse and Alcoholism (NIAAA), also examined underage drinking habits in 2011. The analysis showed a decline from 2011 to 2016 – minors consumed 11.7% of the standard alcoholic drinks sold in 2011 versus 8.6% in 2016. In the US, a standard drink is about 0.6 fluid ounces or 14 grams of pure alcohol, which differs depending on the type of adult beverage consumed.

The study found sales revenue from alcoholic drinks consumed by minors also dropped, from 10% of total sales ($208 billion) in 2011 to 7.4% of total sales ($237 billion) in 2016 – or a drop from $20.9 billion to $17.5 billion.

Regardless of the decline, “underage drinking is still a significant public health issue,” said Mona Shah, senior program officer in the Research-Evaluation-Learning unit of the Robert Wood Johnson Foundation, which has invested nearly $700 million over 20 years in alcohol and substance abuse prevention efforts in the US.

“Drinking and binge drinking remain common among high school students and underage college students,” said Shah, who was not involved in the study.

Trangenstein pointed to 2019 numbers from the NIAAA that show 7 million 12- to 20-year-olds said they drank alcohol in the past month, while 4.2 million reported binge drinking.

“Both of those numbers should be zero,” she said.

Despite decades of trying to combat teen access to alcohol, way too many young people slip through enforcement cracks, experts say.

“It is broadly known and acknowledged throughout the alcohol research community that underage youth can directly or indirectly, through others, purchase alcohol through retail outlets,” Gruenewald said.

“One usual quoted figure, for instance, is that underage youth can successfully purchase alcohol through off-premise outlets, such as grocery and convenience stores, about 30% of the time,” he added.

The consequences are significant, experts say. Each year, drinking is linked to more than 3,500 deaths and 210,000 years of potential life lost among people under age 21, according to the US Centers for Disease Control and Prevention.

Alcohol poisoning, physical and sexual violence, and an increased risk of suicide and homicide among youth is also tied to alcohol abuse, and teens can suffer changes in brain development that may have life-long effects, the CDC says.

“Youth who began drinking before the age of 15 have four times higher risk of developing an alcohol use disorder, with all the health risks and impacts that entails,” Trangenstein said.

Majority of underage sales

AB InBev, or Anheuser-Busch InBev, is by far the largest in the industry, selling over 500 brands and “countless” beer varieties, according to its website. The study found over 21% of drinks consumed by underage youth in 2016 were made by AB InBev, for an estimated $2.2 billion in sales revenue.

Molson Coors - which was called MillerCoors until 2019 and is cited as MillerCoors in the study – makes 113 beers and hard ciders and gathered 12.3% of the 2016 underage market share. That’s roughly $1.1 billion in sales revenue, the study said.

Diageo sells over 200 brands of liquor and the Irish beer Guinness. The study found Diageo accounted for 11.1% of the alcohol market share for minors in 2016, taking in an estimated $2 billion in sales revenue.

Combined, products from these three companies accounted for about 45% of underage youth alcohol consumption in 2016, the study said.

The rest of the underage market was primarily distributed among seven additional companies, but the market share of each was dramatically smaller than the top three brands, the study found. For example, the company with the fourth largest market share was “$592 million, not billions,” Trangenstein said.

CNN reached out to Molson Coors, AB InBev and Diageo for comment. Molson Coors and AB InBev directed the request for comment to the Beer Institute, a trade organization, which responded by pointing to the many preventive efforts the industry sponsors.

“For example, since 1982, Anheuser-Busch and their wholesale partners have committed more than $1 billion in national advertising campaigns and community-based programs to encourage responsible drinking and prevent underage drinking and drunk driving,” a Beer Institute spokesperson told CNN.

The spokesperson also pointed to actions by Molson Coors, which recently became “the first major beer company to support the TruAge age-verification system provided to all trade channels by the National Association of Convenience Stores.”

A Diageo spokesperson also pointed to community prevention efforts the company sponsors in the US, such as the “Ask Listen Learn” and “We Don’t Serve Teens” educational programs.

“We only want the business of consumers who are of legal drinking age. We abide by the drinking age laws in the US and the industry’s code of responsible practices,” the Diageo spokesperson said.

What to do?

Solving the problem of underage drinking will take a concerted effort by everyone involved – parents, alcohol manufacturers, distributors and point-of-sale retailers, and local, state and federal governments, experts say.

“Greater minimum legal drinking ages, higher beverage taxes, reductions in numbers and types of outlets selling alcohol, restrictions on days and hours of sale, and a host of other societal steps do work,” Gruenewald said. “Unfortunately US states do not choose these paths, but the paths are there.”

Parents need to be responsible by modeling a sensible use of alcohol, and limiting access in the home, which is “a primary source of alcohol for underage drinkers,” Gruenewald said.

“Do not, ever, host parties for underage youth in which alcohol is served. That encourages early onset, problem use and its consequences,” he stressed.

A 2019 National Survey on Drug Use and Health shows more than 90% of underage drinkers do not buy their own alcohol, according to Lisa Hawkins, senior vice president of public affairs for the Distilled Spirits Council, an industry trade group.

“Rather, they obtain their alcohol from parents and other legal-age adults,” Hawkins said. “Therefore, if anything, this survey reflects the brand choices of adults of legal purchase age.”

Advertising by alcohol companies also needs to be closely monitored to ensure they are following current laws about limiting teen exposure to ads promoting alcohol, Trangenstein said.

Studies have found that “young people with greater exposure to alcohol marketing appear more likely subsequently to initiate alcohol use if they did not drink previously, and engage in binge and hazardous drinking if they did drink previously,” she said.

The Beer Institute told CNN that its members must comply with its advertising and marketing code,“to ensure beer advertising and marketing materials are intended for adult consumers of legal drinking age.”

But today’s teens have access to different forms of media, and at levels not seen in the past, said the Johnson Foundation’s Shah, and it’s hard to ensure they are not exposed to ads for alcohol.

“Social media is constantly evolving – Instagram, Snapchat, TikTok. We need to be sure policies are updated to ensure that children using social media aren’t exposed to alcohol advertising. The alcohol industry should be involved in that,” Shah said.

Effective education is needed

Educational strategies funded by many alcohol organizations are “not among the most effective,” Trangenstein said, “likely because they rely on outdated science like social norms. Numerous studies show these approaches serve to first and foremost reframe alcohol-related topics in line with industry interests.”

She pointed to the World Health Organization’s SAFER initiative, which she said uses well-researched, cost-effective methods, as an example of a program proven to have long-term, effective results.

“If alcohol companies want to demonstrate their commitment to meaningful prevention, they could commit to devoting 0.5% of their gross revenues to an independent fund controlled by prevention experts,” Trangenstein said.

Donating a half percent of income to be used for underage drinking prevention was recommended by the National Research Council and Institute of Medicine 17 years ago, but the idea was never implemented by the alcohol industry, she said.

“We need to have some mechanism to put these funds in a separate, independent fund where we can do what works to delay young people from starting to drink during their teenage years,” Trangenstein said.

“This is not about ascribing blame, it’s about doing what’s right,” she added. “This study is about looking at the disconnect between large corporations that are making substantial profits off young people’s risky behaviors and how we can right that wrong.”