AIMS-This study investigates the motives and discourses around the decision taken by the Icelandic parliament in 1989 to legalise beer sales after a prohibition of 74 years. A bill was passed in 1988 that allowed the selling of beer in licensed restaurants and the state alcohol monopoly stores. DESIGN-The sources used for this study are mainly newspaper articles and other materials and reports published in the period 1980 to 1989. RESULTS-The passing of the bill was preceded by many controversial discourses in Iceland. Lobbying groups with commercial interests campaigned for the legalisation of beer, while representatives of the alcoholism movement took no formal stance on the issue, parliamentarians broke from party lines and medical doctors were split into two factions. Common questions included the plausibility of the total consumption model, various understandings of WHO recommendations, diverging interpretations of other countries' experiences of beer, and different views on how beer would affect individuals suffering from alcoholism. CONCLUSIONS-The changes in Icelandic alcohol policy to legalise beer were in keeping with contemporary societal processes of globalisation and modernisation, but public health arguments were given less priority. While the decision to legalise beer increased the commercial functions of the state alcohol monopoly, it also strengthened the monopoly's role as an actor in alcohol policy.