Reversing a decision made a day earlier, the state's tax policy board on Wednesday voted to take the first steps toward hiking the tax on "alcopops" -- sweeter-tasting alcoholic drinks that a coalition of youth groups believes are targeted at teenagers.
Alcopops -- which refer to flavored malt beverages such as Smirnoff Ice and Mike's Hard Lemonade -- are taxed at 20 cents per gallon, the rate for beer. The coalition wants the beverages taxed at $3.30 per gallon, the rate for distilled spirits, with the hope that the steeper price will make the drinks less accessible to minors.
Never mind that they have about the same alcohol content by percentage as most beer, and often even less. Moreover, flavored malt beverages have been around for decades, while most underage drinking still involves brew-skis and mixed drinks from hard liquor.
This reminds me of the Joe Camel hysteria a decade ago, where it was claimed that young smokers were more likely to smoke because of the character. And yet, if you look at any teenage smokers, what cigarettes are they almost always smoking? That's right--Marlboros!
Board member and state Controller Steve Westly, who made the motion for a second vote on Wednesday, disagreed (with keeping the malt beverage tax rate at the level of beer).
"There is no doubt that based on how they are marketing (the drinks) ... they're being targeted at the youth market," he said in an interview.
Oh really? What proof do you have of that? Has Steve Westly even SEEN a Mike's Hard Lemonade advertisement? The fact is that the Mike's Hard Lemonade ads feature older, thirtysomething men and women. Remember Anheuser Busch's Spuds McKenzie advertising campaign for Bud Light Beer? Now THAT was clearly aimed at college age people, many of whom were (and still are) 17-20 years of age and drinking illegally (wink, wink, nudge, nudge).
The five votes on the Board of Equalization (excise taxes) member panel consist of three Democrats and two Republicans. Guess which two want to keep the hard lemonade tax at a reasonable beer-like level, precisely because it has a beer-like alcohol content?
Voting no were Bill Leonard, whose district includes the San Joaquin Valley, and Claude Parrish, who represents a Southern California district. (Parrish ran for State Treasurer, losing to Bill Lockyer). Both men worried the tax might place an undue hardship on beverage makers, distributors, retailers and restaurants. Some establishments, Leonard said in a statement, might not have the correct licenses to sell the drinks if they are reclassified.
"This is something (that will) kill a product, kill a business, and it sounds like it's predatory," Parrish said at Tuesday's hearing.
Indeed. Why do I get the feeling that the beer industry is behind raising the tax on a competing beverage?