Malternatives come under scrutiny
Legislators consider tapping into federal alcohol restrictions
Oregon is set to become a proving ground in determining what constitutes a malt beverage.
At stake is the ability of imbibers to purchase such popular products as Smirnoff Ice in grocery stores, as opposed to buying them in state-sanctioned liquor stores.
The Oregon Liquor Control Commission recently issued a ruling that malt beverages containing more than 0.5 percent worth of alcohol from distilled spirits can be sold only at state liquor stores, effective Jan. 1, 2004.
'It is now apparent that the 'malternative' products do not meet our definition of malt beverage since, among other things, the products contain over 0.5 percent of distilled spirits, which is used as a flavoring,' Philip Lang, the OLCC's chairman, wrote in a letter announcing the ruling.
'Therefore, they cannot be carried in a licensed package store and must be carried in liquor stores.'
At the same time, the state Senate is considering measures that require the state to follow rules under deliberation by the federal Alcohol and Tobacco Tax and Trade Bureau. The federal rules would further define products such as Smirnoff Ice as subject to distilled spirits requirements.
'The end game is that we could follow the federal rules,' which, as proposed, match the OLCC's one-half of 1 percent standard, said state Sen. Ryan Deckert, D-Beaverton. 'It makes no sense for Oregon to be on our own on this.'
The measure, in effect, would confirm the OLCC's stance regarding the volume of distilled liquor contained in the so-called 'malt beverages.'
On the state house's table sits a bill that would postpone any new distilled spirits requirement until July 2005.
Oregon is tackling the issue after a recent Alcohol and Tobacco Tax and Trade Bureau report found that many malt beverages use high volumes of distilled spirits to flavor the drinks.
'Many other states are driven by the (federal report), but we're right up there at the forefront,' said
OLCC spokesman Ken Palke.
Many beer makers argue that producers of the malt beverages sell them primarily because federal excise taxes on beer are about less than half of what they pay on distilled spirits. Classifying the goods as malt beverages also opens broader distribution channels.
But some beer makers that also make 'malternatives' think the legislation isn't needed in light of the OLCC ruling.
'We are opposed to the proposed (Senate) legislation because we believe it is not necessary and not proper,' said Henry Dominguez, an Anheuser-Busch regional vice president for government affairs. 'The Oregon Liquor Control Commission already has a regulation that sets a limit on the amount of distilled spirits that can be added to a malt beverage as a flavoring agent. Furthermore, Oregon's (liquor control) commission indicated its intention to enforce that rule within the next year.'
Dominguez said Anheuser-Busch, which makes Bacardi Silver and Tequizi, will be able to reformulate the beverages to meet next January's deadline.
Malt beverages flavored with distilled spirits have gained many fans in the last several years. But the Oregon Coalition to Reduce Underage Drinking says producers have hit the wrong targets.
'We think these beverages are awfully attractive to kids because of their sweet taste,' said Pamela Erickson, the coalition's executive director. 'We've also seen data showing that kids might be attracted by advertising for these products.'
Jim Parker, executive director of the Oregon Brewers Guild, agrees.
'They're made to taste like soda pop. In Britain, they even call them 'alcopops,' ' he said. 'They have no place on grocery shelves. The reason they're calling them 'malt beverages' is to avoid paying taxes and to be able to advertise them on television.'