The Staggering Costs of Overpouring

Most city leaders see alcohol businesses as reliable sources of tax revenue. However, many cities unknowingly carry a financial burden called the Alcohol Footprint —the net cost to the city after accounting for all revenue from alcohol businesses versus the expenses they generate. The Hidden Costs of Alcohol Businesses Take Fullerton, California, as an example. In 2002, the city created a Restaurant Overlay District downtown, eventually housing 49 alcohol-licensed establishments. While this boosted nightlife, it also brought increased demand for city services. A 2006 report revealed the District cost the city $935,500 more annually than it earned. The largest expenses came from police, fire, and maintenance services. The report anticipated the deficit would grow with the need to add four new police officers costing $412,000 per year. Fullerton officials deserve credit for identifying the problem, but what about the Alcohol Footprint for an entire city? The numbers can be staggering. A Broader Issue One client city recently calculated its Alcohol Footprint across all 300 of its alcohol-serving businesses and discovered losses “significantly more than $1,000,000 annually. ” If your city is like most, with alcohol businesses that mostly close by 10 PM, some by midnight, and a few staying open until 2 AM, it likely carries a substantial Alcohol Footprint. Why does this happen? It’s often due to a lack of best practices: Inadequate Conditions of Approval: Many cities fail to include effective regulations for alcohol businesses in permits due to insufficient training in urban planning programs. Limited State Flexibility: California’s Alcohol Beverage Control (ABC) is constrained by State liquor laws on what conditions the agency can document for a new licensee. Insufficient Police Training: California police officers receive just two hours of ABC law training in their Basic Academy, which includes no guidance on preventing disorderly alcohol establishments. Knowledge Gaps in the Industry: Most alcohol business operators and food-and-beverage managers lack access to training in best practices. The Solution: Best Practices for Alcohol Businesses Despite these challenges, there’s a clear path forward. Our Best Practices for Nightlife Establishments booklet equips alcohol businesses with strategies to reduce intoxication, lower service calls, and improve community safety. Research by Levy and Miller found every $1 spent on controlling over-service saves cities $260. We’re passionate about supporting well-run alcohol businesses—they bring communities together for meals, entertainment, and memorable moments. But they need to operate responsibly to protect public safety and city resources. Learn more through our Insight series, It’s Not Magic, It’s Math.