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Nebraska Commission Delays Alcopops Decision
August 6, 2008

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News Summary

The three-member Nebraska Liquor Control Commission has delayed until the fall a vote on a proposed rule regarding the state's taxation and regulation of flavored alcoholic beverages as distilled spirits or beer.

The announced delay in the vote at a July 31 public hearing is intended to allow for a 30-day public comment period, according to commission executive director Hobert Rupe. The hearing featured dueling testimonies from liquor industry representatives and groups combating underage drinking regarding how the flavored beverages known as alcopops should be taxed, the Lincoln Journal Star reported Aug. 1.

Industry representatives said that the state should follow policies in 46 other states and tax the drinks at the lower rates imposed for beer. Advocates for youth said the beverages serve as a gateway drink for young people, and that adding about $2 to the cost of a six-pack through the liquor tax would help keep the beverages out of the hands of underage drinkers.

Already Nebraska statute lists alcopops as distilled spirits for regulatory purposes, a law that was projected to generate an additional $2 million in annual tax revenue, but the regulation was never enforced and the products continue to be sold and taxed like beer.

Diane Riibe, executive director of Project Extra Mile, noted the strong public support for regulating alcopops as spirits: "We have gathered nearly 900 resolutions of support from citizens, municipalities and organizations across Nebraska to encourage the Liquor Control Commission to protect young people by appropriately classifying these kid-friendly products as distilled spirits." 

In addition to lowering prices, classifying alcopops as beer leads to wider availability and increased advertising, Riibe continued.

A number of parents who testified at the hearing said their attempts to control consumption of the drinks are thwarted by the prevalent advertising of the beverages on websites aimed at adolescents. "My kids don't have a lot of money," said Tim Regler. "I would like to price my kids out of the alcopop arena."

The liquor control board expects to return to the issue in the fall.

Additional sources used in this summary: Sun Telegraph (07/31/08), Omaha World-Herald (07/31/08), and North Platte Telegraph (8/03/08)

This news summary has been revised to note the following correction.

Correction, August 7, 2008: As originally published, the summary included erroneous information from one of the source articles.

COMMENTS ON THIS ARTICLE:

Posted by Joshua on 11 Aug 08 10:38 AM EDT
Teenagers in America have a very high disposable income. this type of Piguvian tax is likely to have virtually no effect on the consumption level of alchohol because the demand for alcholhol is just particularly elastic. if it has any effect at all it will probably be to push more teens toward either beer or marijuanna, which are common substitute goods.

Posted by Jim Paoni on 07 Aug 08 05:18 PM EDT
In response to John Moulden: It doesn't apear to be an election year cop-out or afraid to make a decision. The July 31 event was a public HEARING, while the additional time is for a written public COMMENT PERIOD, which means 30 days to get conecrens (either way) in writing to the Commission. One f the sourced articles says the decision should be made in Sept./Oct. If Project Extra Mile has 900 resolutions, it should be able to get an overwhelming 900 or so comments submitted in support of their position to NOT roll back the current taxation law and get the current one enforced.

Posted by John Moulden on 07 Aug 08 12:16 PM EDT
Is this an election-related cop-out or were they just afraind to make a decision?

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