New Report Highlights Safeguards in United States to Prevent Counterfeit, Black Market, Substitute, and Non-taxed Alcohol from Harming the Public

Robert Tobiassen has authored a great report examining the lack of a counterfeit marketplace in the United States, especially when compared to other nations across the globe. Mr. Tobiassen served with the federal government’s Alcohol Tax and Trade Bureau (TTB) for 32 years most recently as Chief Counsel until his retirement in 2013.   He performed his research with the assistance of a grant from the Center for Alcohol Policy.

In this paper Rob noted the relative lack of incidents of fake alcohol products in the United States identified in the study and credited “a strong cultural respect for the rule of law and lack of corruption in governance,” along with “strong regulatory systems that police the production, importation, distribution and retail sales of alcohol beverages through independent parties” and the country’s “competitive marketplace.”

The report notes that public policy makers must balance competing goals and develop intervention tools that offset the social harms associated with the availability of low-cost alcohol beverages, combat the distribution of fake alcohol products and prevent a corrupt illicit production and trade marketplace.  The global problem of counterfeit goods including alcohol across the world is staggering, however, the closed distribution system, and combination of federal and state regulation prevent this problem from manifesting itself in the American economy.

This paper was the subject of a panel at the regional conference of the National Conference of State Liquor Administrators on the issue of counterfeit alcohol and unregulated product in the marketplace. I served as moderator and pointed out that the alcohol industry and the regulator community share the same interest in preventing unregulated industry players and unregulated product from entering the alcohol marketplace.  Moreover, industry and states must constantly be vigilant in policing the marketplace to prevent unregulated product from harming public health, killing jobs and depleting tax coffers.

I was joined by Rob Tobiassen who described his paper on this subject and noted how the American culture of compliance with the law is something all take for granted.  Quoting others, he pointed out how the rule of law and our regulatory system is like oxygen, it is essential for life but only noted when it is gone. Likewise, a sound regulator system and respect for law is often hard to quantify and articulate but an essential step for a successful marketplace.

Kathie Durbin, Chief of Licensure, Regulation and Education, Montgomery Co. Maryland Department of Liquor Control and Teri Quimby, Commissioner, Michigan Liquor Control Commission both addressed how their varied jurisdictions handle this issue and steps they take to be proactive in protecting communities and the industry.   New market entrants or new Americans may sometimes lack the understating, historical context, or commercial understanding of regulations designed to ensure state taxes are collected, the regulated industry is regulated and public health is enforced.

I encourage anyone interested in alcohol regulation to read Rob’s paper.

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