Feb. 16 (Bloomberg) -- The market for devices to prevent convicted drunk drivers from starting cars if they’ve had too much to drink may surge almost fivefold if the U.S. Congress passes a bill under debate this month.
Sales of ignition interlock devices, which analyze a driver’s breath and prevent a car from starting if the driver’s blood-alcohol content exceeds the legal limit, may jump to as much as $1.1 billion a year, according to data compiled by Bloomberg. Fifteen states currently mandate the technology for convicted drunk drivers, including first-time offenders, as a condition for retaining their drivers’ licenses.
Surface-transportation bills in the House and Senate include measures supported by Mothers Against Drunk Driving that would give states extra highway money if they enact laws requiring interlocks for convicted drunk drivers. There were 10,228 U.S. alcohol-related driving deaths in 2010, down 4.9 percent from the previous year, according to the U.S. National Highway Traffic Safety Administration.
“There is still a substantial problem of alcohol-impaired driving,” Adrian Lund, president of the Insurance Institute for Highway Safety, said in a telephone interview. “If you have technology on a vehicle that can measure alcohol in a person, then you can prevent that vehicle from being operated.”
About 7,000 lives could be saved annually in the U.S. if no one drove with a blood-alcohol content over the legal limit of 0.08 percent, according to the Insurance Institute for Highway Safety.
Changing State Laws
There are about 1.4 million drunk-driving arrests each year in the U.S., with as many as 1.2 million of those ending in convictions, according to MADD, an Irving, Texas-based advocacy group. About 249,000 interlocks are in use now, according to Richard Roth, a retired physicist who researches interlocks and who has helped states write laws requiring them.
“There’s a lot of lives at stake,” said J.T. Griffin, senior vice president of public policy for Mothers Against Drunk Driving. “Incentive grants traditionally at the federal level have proven to move state behavior and change state laws.”
The devices are made for the U.S. market by 13 companies such as Draegerwerk AG & Co., a German manufacturer of medical and safety equipment, and closely held Smart Start Inc., TruTouch Technologies and Guardian Interlock Systems, according to Roth, who is based in Santa Fe, New Mexico.
They cost offenders $470 every six months in Virginia for installation and monitoring, said Griffin.
Companies lease the devices, monitor them and communicate with law enforcement overseeing the sentences of drunk drivers.
House Transportation and Infrastructure Committee Chairman John Mica, a Florida Republican, is seeking to allot an additional $21 million of annual highway funds to states with interlock requirements. The proposed legislation in the Senate doesn’t yet specify an amount.
Passage of the legislation would probably attract additional makers to the market, said David Kelly, executive director of the Coalition of Ignition Interlock Manufacturers.
“It’s likely that if states begin to mandate this technology, a large supplier might get into this space,” Bill Visnic, a senior analyst for auto-researcher Edmunds.com, said in an e-mail. Interior suppliers such as Lear Corp. or Johnson Controls Inc. would be the most likely to step in, he said.
Sales may peak at about 750,000 units a year, because not all offenders will use them and a deterrent effect eventually may cause drunk driving to decline, Kelly and Roth said.
“You’re always going to have a group of people that just never are going to put these devices on,” Kelly said. “They don’t like them, they’d rather drive with a suspended license, they can’t afford them.”
The requirement is meeting opposition from the American Beverage Institute, a Washington-based group that represents beverage suppliers and restaurant chains. Members operate 8,000 restaurants, the group says without identifying them.
Restaurants fear the “chilling effect” of interlock laws on sales, Sarah Longwell, managing director of the restaurant group, said in a telephone interview.
“What we don’t want is for somebody who is below the legal limit or perhaps one sip over the legal limit to be punished in the same way as someone who has had 10 drinks before driving,” Longwell said.
Chili's, Mimi's Cafe
Chili’s Grill & Bar, owned by Brinker International Inc., has seen its bar business pick up recently as it advertises premium margaritas and draft beer, Wyman Roberts, Chili’s president, said on an earnings conference call on Jan. 24.
“We can sell more alcoholic beverages and that’s what we’re focused on,” he said.
Maureen Locus, a spokeswoman for Dallas-based Brinker, declined to comment.
Mimi’s Cafe, owned by Bob Evans Farms Inc., said alcohol sales increased to account for 4.5 percent of sales in the quarter ended Oct. 28, from 3.9 percent a year earlier, after it promoted wine. Bar sales in the most recent quarter rose 12 percent at Mimi’s, Bob Evans said yesterday.
The Columbus, Ohio-based restaurant operator is converting more of its Mimi’s locations to have full bars.
Margaret Standing, a spokeswoman for Bob Evans, declined to comment on interlocks.
The House bill is H.R. 7. The Senate bill is S. 1813.
To contact the reporter on this story: Angela Greiling Keane in Washington at email@example.com
To contact the editor responsible for this story: Bernard Kohn at firstname.lastname@example.org