The Economic Value of Underage Drinking and Adult Excessive Drinking to the Alcohol Industry

    Published: February 2003

    The alcohol industry makes millions of dollars each year from underage drinkers and adults who drink excessively. The economic reality of the alcohol industry is that it must maintain or increase alcohol consumption if it is to ensure future profits. This means that the industry must continually attract new drinkers as current drinkers quit or die.

    Key Takeaways

    Underage drinking poses a serious problem to teens’ health. Research has shown that those who began drinking before the age of 21 were more than twice as likely to develop alcohol-related problems compared to those who began drinking at age 21 or older. The incidence of lifetime alcohol abuse or dependence was greatest for those who began drinking between the ages of 11 and 14. Findings included the following:

    • Underage drinking accounted for nearly 20% of the alcohol consumed in the U.S., and adult excessive drinking accounted for another 30%.
    • Adult excessive drinkers accounted for 9% of drinkers but 46% of the total alcohol consumed.
    • Underage drinking accounted for $22.5 billion in alcohol sales, and adult excessive drinking accounted for $34.4 billion in alcohol sales, which together constitute nearly half of total U.S. consumer expenditures for alcohol.


    For the alcohol industry:

    • Include in its advertising and product labels clear warnings of the dangers of underage drinking and adult excessive drinking, as well as the definition of moderate drinking as defined by Nutritional Guidelines of the U.S. Departments of Health and Human Services and Agriculture.
    • Include in its product labels the nutritional health profile of the contents, including caloric content.
    • Endow an independent foundation with no ties to the alcohol industry to work exclusively to curb underage drinking and adult excessive drinking.


    For the government:

    • Mount aggressive public health campaigns like those being conducted to deal with smoking and illegal drug use.
    • Increase taxes on alcohol.
    • Impose tougher penalties on those who sell alcohol to minors or otherwise help them obtain alcohol.


    For parents and schools:

    • Recognize and exert their influence to help children stay alcohol-free.

    Research Methods

    To estimate consumer expenditures linked to underage drinking and adult excessive drinking, CASAColumbia examined alcohol industry data on consumption and expenditures for alcohol by type of beverage, as well as research documenting the types and proportions of beverages consumed by underage drinkers and adult excessive drinkers.


    February 2003