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Calif. Governor Urged to Veto 'Malternative' Tax Measure
September 23, 2005

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News Summary

California Gov. Arnold Schwarzenegger should veto a bill that would continue the state's practice of taxing "malternative" drinks like beer, not liquor, alcohol preventionists say.

The Stockton Record reported Sept. 22 that Mothers Against Drunk Driving and other organizations say that the taxation practice impedes their ability to limit sales of drinks like Smirnoff Ice to minors. The bill introduced by state Rep. Greg Aghazarian (R-Stockton) would derail an attempt by underage-drinking groups and Attorney General Bill Lockyer to reclassify the drinks as hard liquor, meaning they could only be sold by retailers with a full liquor license.

Currently, malternatives, a.k.a. "alcopops," can be sold anywhere that beer is sold. Taxing the product like liquor would raise the price of a six-pack by about $2.50; supporters of the change say it would generate $40 million in additional tax revenue. Opponents say the taxes would kill sales.

The governor has not yet taken a position on the bill, AB-417, and has until early October to act on it.

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