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California tax on flavored beer to soar 1600%
June 11th, 2008, 2:15 pm · 36 Comments · posted by Nancy Luna, Staff Writer
To curb underage drinking, the California State Board of Equalization approved huge tax increase on flavored malt beverages such as Seagram’s Coolers and Smirnoff Ice.
The new regulation goes into effect Oct. 1. It calls for flavored beer to be taxed at the distilled spirits rate of $3.30 per gallon rather than at the beer rate of $0.20 per gallon, the state agency said Tuesday.
“I believe that the ultimate effect of this regulatory change will be positive”, said Judy Chu, chair of the State Board of Equalization. “It will send a signal to youth that alcopops are hard liquor. It will make it harder for young people to access alcopops, and that can only be helpful in
reducing
underage drinking.”
Flavored malt beverages are produced by stripping the taste, color and most of the alcohol from a malt beverage and then adding flavorings, including those from distilled spirits, according to ConsumerAffairs.com.
The state agency estimates that the new tax will bring in $41.4 million annually to California.
Makers of flavored malt beverages balked at the decision to reclassify malt beverages as a distilled spirit.
“Not only does it (the new tax) hurt adult consumers and more than 35,000 small businesses across California, but it also misleads the public to think raising taxes on a consumer product will combat the very serious problem of undera
ge drinking,” said Amy Elliott, senior director of state government affairs for Diageo North America.
Diageo (Dee-AH-Gee-O) brands include spirits, wines, and beers. They include
Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Cuervo, Tanqueray, Captain Morgan, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines.
Earlier this week, Diageo sealed a joint partnership deal with Aliso Viejo-based Nolet Spirits U.S.A. Nolet makes Ketel One Vodka. (at, right)
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The State of California is broke because during recent good times all the extra taxes were squandered by an overspending legislature and Governor. Now that business has cooled off, as it always will,cyclicaly, they look for ways to gouge taxpayers more. I don’t smoke but seems to me that more working class and less wealthy people tend to smoke. Same with beer and “malt alcohol” drinks. Older people and richer people drink Scotch or martinis or even imported beer. So this new law will get more money from people with less income and will likely just drive people to mix their own drins, probably stonger drinks so nothing will be accomplished … except more alcohol related accidents and drunkeness. This is dumb and unfair.
This strikes me as a reactionary move targeting a narrow class of alcohol.
1,600%? It reminds me of the crack sentancing laws that were recently recinded. Affluent cocaine users were given a slap on the wrist while poor crack-cocaine users did hard time.
If I’m not mistaken, these “floo-floo” beverages are similar in alcohol content to wine. Why not just use that tax rate (assuming it’s higher than the beer tax rate)?
Poor Zima. Will it ever catch a break?
To curb underage drinking? Yeah right!! They just need the money. Teenagers will always find a way to drink. Will have to get my wife to drink beer like me.
This is bs another way for our goverment to get into our pockets. Just like our gas prices for figuer.
Just another money grab by politicians. People will just stop buying the product, companies will then lower production and the goverment will collect less in taxes. The goverment bases its estimates of tax collection on people not changing their drinking habits, they will change and everybody loses.
What does the FTB plan to do w/ this new found revenues? More education for underage drinking? Eventually these kids will grow up and be able to drink at age 21. Access to alcohol is not at risk from liquor stores, it’s from homes and homies. Besides these kids I bet don’t pay for their liquor, they just get for free from their homes. And the homies share. Again, what does the FTB plan to do with this revuene stream?
Haha looks like they will have to start on beer or the hard stuff.
WOW, are we really hurting that bad to ask everyone to pay for their teachers payroll, up the tax on fu-fu drinks, as well as getting more taxes on the gas, prices rise and so do the taxes! What the heack is going on??? We need to stop giving goverment higher-ups the bennies they are getting, such as a health care spending account, a car and free gas, credit cards so they can take the wife on a trip to Cancun all expenses paid. Why are we allowing them to get away with us fronting the bill? When will we stand up for ourselves? First fu-fu drinks, then oats because kids COULD make a drink with it, what after? Hummm, I think I should raise the price of cocnuts because they could be thrown at another kid at school, HA!
By the way, when I was a kid I like to drink hard stuff, it got me way more messed up and no headache! After pounding like 10 or 15 fu-fu drinks I wouldnt even be toasty, and I would have a headache…. Why drink that stuff?
If the tax is a deterant for underage drinking how do they plan to make 41.4 million when all the teens stop drinking it. Dumb-ass politics at it’s best!
Getting bent over and F’d by those wonderful California state taxes again.
Underage drinking is a parental issue not a gov’t issue. I’m so tired of the gov’t sticking their nose into the places where parents need to be more attentive in their kid’s lives.
Parents are stupid too — always suing this person and that company for stuff that would never have come up if they (the parents!) would have been more involved in their kids lives!!!
I knew the government would find a way to get back the rebate money they sent to everyone….First its gas price, then the stupid tomatoes and now this!! Teens do not buy this stuff..they drink the hard liquor or beer.. how ridiculous!!
Not sure where these people get there info. But absolutely across the board, the underage drinking is BEER and Hard Liquor. Not flavored booze, except for the occasionally sissy type girl, it’s blocks of BudLight and 40’s.
And increasing cost has never been and will never be any form of effective method for reducing drinking.
Pony up everyone. Millions of illegals on our support need us.
If they state needs to raise money they should start with cutting all the juicy benefits their employees get. Why can’t they have a 401ks instead of a pension? Why do they need to have great health benefits? They need to run their operations like a regular business and not expect us to pay for all of this.
Wow. How naieve can elected officials be? In our day, it was Spanada, Almaden and Thunderbird. Do you think they won’t come up with a substitute? Some young entrepreneurs from prison can even make their own hooch. What a joke, more taxes on everything, this surely ought to help balance the budget! I think that before anyone runs for any elected office, they take and pass the California High School Exit Exam. I think that most of these yehoos missed it.
This is BS! So lets raise the tax on guns to keep kids from shooting each other? Don’t forget the tax on cigaretts so they won’t smoke? And the best…Lets raise the tax on fast food so they wont get fat!?!??
Government greed!! Rat Bastards!
We do our best to raise our children right with the values that they need to succeed and do well in life. But the still have to walk to walk out the front door. Thanks for giving parents a much-needed tool in the often difficult job of raising kids.
We all have to pay taxes. Why isn’t anyone upset that the alcohol industry has been duping the government AND consumers for the last 10 years out of 40 million dollars a year by intentionally calling their products “beer” even though they are made with distilled spirits?! I don’t get it. Come on, people! I find it infuriating.
The power to tax is the power to destroy.
After all, it’s for the kids. HAHAHA!
What a “tool”. You’ve been tooled “The Mom” if you think this will even slightly deter your child from drinking. Nice false sense of security. If they want to drink, they’ll drink. If you charge them more for one they’ll get another. Most likely just hard liquor (as mentioned above). Get a clue MOM.
Hey “Mom”, get real. If you are stupid enough to believe this will help underage drinking, then let me sell you some beachfront property in Nevada!
No problem, I quit drinking months ago. Tax all you want.
Ridiculous, yet we put up with it.
Now they’re going to switch from beer to hard alcohol. California is run by a bunch of idiots!
Does 100% of that tax money go to alcohol addiction programs for teens? These politicians take us for stupid!
Shouldn’t we all get to vote on this? There is no way it would ever pass!
Sounds to me like it’s time to bust out the Captain & Coke. I know that’s what all my friends drink.
This was slated to go in effect on july 1st, and i coulda swore thats what this article said yesterday. You mean to tell me i get a few more months to stockpile? This is complete BS. This means my sparks are going to go up about 35¢ a can (for those of you who dont know, sparks is an energydrink with 6% alc.). LADIES drink the fu-fu smirnoff ice and zima’s. When I was in highschool we never drank those kinds of drinks. it was vodka in a waterbottle or something of that nature. The people in our state assembly are so out of touch with their public and reality. Lets increase the tax 1600% and say the money is going to educate and and help prevent underage drinking, just like the cigarette tax. boy, that sure worked. just filled that state up with our tax dollars and did nothing to prevent smoking. the honest consumer and the small liquor stores are going to be the sufferers from this. the kids are going to be stealing daddy’s 1.75 liter of $10.99 black velvet or popov.
Chu’s explanation is nonsense.The state is going to raise taxes because they over spent, period.
Here’s an idea: Let’s mandate that all taxes be reduced 10% every year for 5 years.
Anyone can spend more and more money, a child can do that. Make these government adminicrats actually earn their pay by figuring out how to do more with less. American Familes have been doing this for the last 40 years. Surely these well paid, healthy people can do the same thing.
Damn, I am a 28 year old female who likes to drink fufu drinks. I will not be paying that much money for these same drinks. I will be switching to something harder and cheaper. Thanks Gov.