September 23, 2005

Chico Enterprise-Record

'Alcopops' fuel debate on teen drinking, taxes
By LARRY MITCHELL

The swift passage of a bill on "alcopops" shows the power the alcohol industry has in the state Legislature, according to a group that says it exists to monitor the industry and reduce drinking problems.
Assemblyman Rick Keene, however, sees a different picture. He said the passage of Assembly Bill 417 shows that Republicans and some Democrats saw through a stealthy attempt to raise more taxes.

"Alcopops" refers to certain malt beverages that are brewed like beer but contain distilled spirits, which creates special flavors.

It includes such drinks as Smirnoff Ice, Bacardi Silver, Zima, Skyy Blue and Mike's Hard Lemonade. Some claim these sweet-tasting drinks are designed and marketed to appeal to teenage drinkers, especially girls.

Attorney General Bill Lockyer has argued that because the beverages contain hard liquor, these drinks ought to be taxed as distilled spirits.

In response to Lockyer's proposal, Anheuser-Busch sponsored a bill carried by Assemblyman Greg Aghazarian, R-Stockton, that would keep "alcopops" taxed at the same, much-lower rate, as beer.

AB417 passed the Assembly and state Senate just before the Legislature ended its session earlier this month. Gov. Schwarzenegger has until Oct. 9 to act on the measure.

Amon Rappaport, communications director for the Marin Institute -- an alcohol-industry watchdog group based in San Rafael -- said he hopes the governor will veto the bill and the state will raise the tax on "alcopops" to the same level as hard liquor.

That would substantially hike the cost of these beverages and make it much less available to underage drinkers, he said.

Assemblyman Keene, R-Chico, who voted for the bill, sees it altogether differently, and so, apparently, do Assemblyman Doug LaMalfa, R-Richvale, and Sen. Sam Aanestad, R-Grass Valley, according to their aides.

The issue isn't really about trying to keep liquor out of the mouths of teenagers, Keene said. It's simply a ploy by certain state officials who are engaging in one of their favorite activities: trying to raise taxes every chance they get.

Beer is taxed at 20 cents per gallon, where distilled spirits are taxed at $3.30 a gallon. If "alcopops" were taxed at the higher rate, an estimated $40.5 million in state taxes would be raised each year, according to information from the Marin Institute.

A news release from the Institute claims the alcohol industry donates heavily to state legislators and that Aghazarian received more money ($11,950) from the industry than any other Assembly member during 2003-2004.

According to the Institute, in that period Aanestad received $3,000 from the industry, Keene was given $2,500 and LaMalfa got $3,600.

Bill Bird, Aanestad's press secretary, said the $3,000 the senator received was "a drop in the bucket" when all of his campaign contributions were considered.

And Keene said any suggestion money he received from the liquor industry influenced his vote on AB417 was absolutely false.

According to a legislative analysis of the bill, a 2003 study by the Federal Trade Commission, requested by Congress, found no evidence the industry was targeting underage consumers with its marketing strategies for "alcopops."

But the American Medical Association, citing two surveys done in 2004, reached different conclusions.

An AMA poster that tries to raise awareness of the issue states, "A third of all girls older than 12 have tried a popular new alcoholic beverage. Known as 'girlie drinks' or 'alcopops,' their sweet fruity flavor can't conceal the negative health consequences. Companies market these 'starter drinks' to appeal to girls and young women. Don't be taken in."

BACKGROUND: The Legislature passed a bill, promoted by the liquor industry, to keep the tax low on "alcopops," sweetened alcoholic drinks some say are designed and advertised to appeal to teenagers.

WHAT'S NEW: A foundation that calls itself an alcohol-industry watchdog, is mounting a campaign to convince the governor to veto the bill.

THE CONTROVERSY: Republicans who voted for the bill say it is needed to prevent an unfair tax from being imposed. Opponents say higher taxes (and higher prices) on these beverages would make them less enticing to young drinkers.