Groups Call on Gov. Schwarzenegger to Veto Stealth “Kiddie Booze” Bill

For Immediate Release:

Contacts:
Amon Rappaport, Marin Institute, 415-257-2490
Rosemary Shahan, CARS, 530-759-9440

Wednesday, September 21, 2005

Stealth “Kiddie Booze” Bill

Teenagers, parents, and public health and safety organizations today urged Governor Schwarzenegger to veto “stealth” legislation that would enhance the liquor industry’s ability to market “alcopops” (sweet drinks spiked with hard alcohol) to underage drinkers.

“We’re counting on Governor Schwarzenegger to veto this gift to the liquor industry, which endangers the health and lives of California’s young people,” said Judy Walsh-Jackson, Associate Director, San Diego County Policy Panel on Youth Access to Alcohol.

The controversial measure, AB 417, would reclassify sweetened, soda-pop style drinks such as Smirnoff Ice, Mike’s Hard Lemonade, and Skyy Blue, as “beer,” even though they contain distilled alcohol. Under current California law, these beverages are classified as distilled spirits, which should mean higher taxes and fewer retail outlets.

AB 417 became a liquor industry priority earlier this summer when Attorney General Lockyer wrote the state Board of Equalization and the Department of Alcoholic Beverage Control saying that the industry was deceptively classifying these drinks as beer rather than spirits and he called on the Board and the Department to enforce state law regarding these cocktails. Attorney General Lockyer vigorously opposes AB 417.

“Kids call these drinks “cheerleader beer” and “girlie beer” because they are so popular with underage girls—their sweet taste is designed to appeal to young teenagers,” said Cinthya Luis, a Senior at Serra High School and Member of the San Diego County Youth Council.

“Alcopops should be made harder for underage drinkers to buy—not easier,” said James Mosher, Director, Director, Center for the Study of Law and Enforcement Policy, Pacific Institute for Research and Evaluation.

Unless the Governor vetoes AB 417, it will become legal to sell the drinks in approximately 35,000 additional retail outlets statewide, making enforcement of laws against underage drinking far more problematic and costly. The reclassification would also allow distillers to escape network television’s ban on distilled spirits advertising. Research shows that underage youth are more likely to be familiar with this advertising than adults. Distillers use alcopops as a way to get their brand names on television shows that appeal to a youthful audience. As a result, distilled spirits are becoming increasingly popular with young people.

Legislators sent AB 417 to the Governor via a controversial process known as “gut and amend.” More than six months after the deadline for introducing new legislation had passed, in the waning days of the legislative session, the liquor industry persuaded Assemblymember Greg Aghazarain (R-Stockton) to remove the contents of a stalled bill, and substitute the provisions to promote distribution of the alcopops. No fiscal committee held a public hearing on the new bill, even though the Board of Equalization estimates that the bill will result in the state losing $40.5 million per year in tax revenue. The only hearing that occurred in the Assembly took place late on the last night of the legislative session, and was announced only minutes before it began, stifling public input.

The groups reminded the Governor that during the recall election, as a candidate for Governor, Schwarzenegger vowed he would veto “gut and amend” legislation because of the lack of public scrutiny.

The alcohol industry is seeking this legislative gift in response to an investigation into the marketing of alcopops by Attorney General Bill Lockyer. Currently, California law requires such beverages to be marketed and taxed as distilled spirits. While beer is taxed at the rate of 20 cents per gallon, distilled spirits are taxed at a much higher rate -- $3.30 per gallon. Eager to evade prosecution for years of deceptively marketing millions of gallons of the drinks under false pretenses, and evading taxes, the liquor industry turned to the legislature for a special favor.

“This bills should be vetoed on good government grounds alone,” said Glenn Backes of Drug Policy Alliance, “But as this bill may also contribute to high rates of drinking among teens, drunk driving, adolescent sex and crime, it should be carefully analyzed by public safety and health committees—not rushed to the Governor in the dead of night.”

Anheuser-Busch, the original sponsor of AB 417, gave $2.7 million to influence public policy in California from 2000-2005. Assemblymember Aghazarian (R-Stockton), the author of AB 417, was the top recipient of alcohol PAC money in the Assembly over the past 12 months, and his wife sells grapes to the wine industry.

More information about alcopops and AB 417, including the American Medical Association survey of teenagers, is posted on the Web at: www.MarinInstitute.org.