States Want Clearer Labeling of Malt Beverages

August 30, 2004
Attorneys General from 28 states are urging the federal government to crack down on malt beverages.

The state officials are asking the Alcohol and Tobacco Tax and Trade Bureau (TTB) to quickly implement rules regulating the proper labeling and advertising of flavored malt beverages, which are known to appeal to consumers for their sweet taste traditionally associated with mixed drinks that were, until recently, only available in bars.

A recent study found that 105 out of 114 flavored malt beverages derived more than 75 percent of their alcohol content from distilled spirits "flavorings." The study also found that the labeling of a beverage that derives most of its alcohol content from added alcohol flavors as a malt beverage is "inherently misleading" to consumers.

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. More than a dozen states have strict statutory definitions of distilled spirits and malt beverages. Under these statutes, the types of beverages currently labeled as flavored malt beverages that contain distilled spirits must be marketed and taxed as distilled spirits.

"The adoption and enforcement of such a national rule is critical to ensuring that consumers are protected from deceptive labeling or advertising and that these flavored malt beverages are consistently taxed, licensed and distributed from state-to-state," said Maine Attorney General G. Steven Rowe Rowe.

"Attorneys General are asking the federal government to address how much of the alcohol content of a flavored malt beverage must be derived from fermentation at the brewery and how much may be derived from alcohol added through the use of flavored alcohol," said New Jersey Attorney General Peter Harvey. "The line between beer and distilled spirits has been completely blurred and we're asking the federal government to adopt a bright line rule for these products."

Until such a rule is adopted, manufacturers will continue to represent these products as malt beverages in order to take advantage of a substantially lower tax rates, access to television and radio advertising, and marketing venues associated with youth purchases, such as convenience stores and gas stations.

More than eight years ago, the Bureau of Alcohol, Tobacco and Firearms (ATF) issued ATF Ruling 96-1. This ruling found that malt beverages may contain only alcohol that is the result of alcoholic fermentation at the brewery. However, the ATF never initiated rulemaking specific to flavored malt beverages.

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