Alcohol Reclassification

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$15.7 million in increased revenue in NJ.

Previous research from the Marin Institute in support of a similar and successfully implemented proposal in California determined that reclassification would decrease overall consumption of these beverages by 35% and subsequently reduces underage consumption and associated harms. These harms include alcohol-related traffic accidents (injuries and fatalities), other alcohol-related injuries, and high-risk and unwanted sex among others. The California analysis also determined that underage drinkers consume 5.5 times more flavored malt beverages (also called alcopops) per year than adult drinkers and that 47% of all alcopops are consumed by underage drinkers. Due in part to these data, the California Board of Equalization recently reclassified alcopops as spirits.

These beverages appear to be marketed primarily to adolescents and young adults. Survey data suggest that adolescents as young as 13 prefer the taste of alcopops to beer by almost a 2 to 1 margin even though the alcohol content is similar. Furthermore, 78% of 8th graders who are drinkers consume alcopops compared to 36% of drinkers who are 25-30 years of age. The American Medical Association has expressed a concern that "hard-liquor brands are using these sweet-flavored malt beverages as gateway beverages to attract less-experienced drinkers. (AMA, 2004). The AMA report also presents survey data showing teen girls are particularly attracted to alcopops compared to teen boys. While the alcohol industry asserts that they are marketing to legal-age drinkers, surveys indicate that underage girls see and remember significantly more ads for alcopops than adult women. Indeed, industry spokesman have been clear about the niche alcopops appeal to:"The beauty of this category is that is brings in new drinkers, people who really do not like the taste of beerÃ?Â (Marlene Coulis, Director of New Products, Anheuser-Busch,quoted in Advertising Age, April 22, 2002.

Several states that have definitions for beer and liquor that are similar to the statutory definitions for alcopops. They have obtained decisions from their regulatory agencies or attorneys general holding that alcopops fall within the definition of distilled spirits and should be treated and taxed accordingly. For example, New Jersey law requires alcoholic beverages that contain distilled spirits to be taxed at the higher rate of $5.50 per gallon. Maine (Office of the Attorney General, 2007), California (California Notice of Proposed Regulations, 2007), and Utah (Utah Code) have decided to reclassify alcopops as liquor.

Attorneys general in at least four states (California, Connecticut, Maine, and Virginia) have concluded that alcopops were not consistent with their definition of beer but were more consistent with their definition of distilled spirits. Properly classifying alcopops will not only save young lives, but will yield $15.7 million in increased revenue in NJ.

Read about Utah's policy success story