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Alco-Pops And The Timid Governor

Why would Maryland Gov. Martin O'Malley choose to make it easier for the makers of sweet-flavored malt beverages to market their wares to teenagers?

Depending on whether you consider them an insidious invitation to underage drinking or a refreshing way to get young adults into drinking alcohol, you might call these products alcopops, "girlie drinks," or "spirit-flavored alcoholic beverages."

Whatever you call them, Maryland has just taken a step in the opposite direction from California and other states that are trying to tighten regulations on the drinks, in effect making them more expensive in an effort to make them less attractive and less available to teenagers.

While California decided that drinks such as Mike's Hard Lemonade, Smirnoff Ice and Bacardi Silver Mojito are liquor, O'Malley's decision to let a bill become law without his signature means that those same drinks will now be considered the same as beer in Maryland--a status that qualifies these drinks for the same low tax rate that beers enjoy.

Maryland's debate over what to do about so-called alcopops stems from the fact that hard liquor is taxed at $1.50 a gallon, while beer is taxed at only nine cents a gallon. The sweet malt beverages are cheap in large part because they've been considered the same as beer so far. But state Attorney General Doug Gansler issued an opinion earlier this spring saying that Maryland would henceforth categorize the sweet malts as hard liquor.

Citing a federal study showing that most of the alcohol in the drinks comes not from fermented malt or grain, but from distilled spirits, Gansler ruled that the state interest is in helping the fight against teen drinking by taxing the sweet drinks at a higher rate. (Some anti-teen drinking advocates say there ought to be a middle ground between the high tax for hard liquor and the low beer tax.)

Gansler notes that there is a social value in "raising the price of these and other alcoholic
beverages to discourage adolescent alcohol use," and concludes that alcopops should be sold only by retail outlets with full liquor licenses, another way to raise the hurdle for underage drinkers who might want to buy the sweet stuff.

That the drinks are aimed at a young audience is hardly in question. The industry, of course, argues that its target audience for the sweet malts is the 21-34 year-olds, but a federal survey of high school kids tells the real story, finding last year that 13 percent of eighth graders, 24.7 percent of tenth graders and 29.3 percent of high school seniors had reported drinking flavored malt beverages in the month preceding the survey.

Ok, so why wouldn't O'Malley veto the legislature's cynical attempt to undo Gansler's opinion and make certain that sweet malt drinks remain cheap and easy to buy?

The governor says that he decided not to join the effort to regulate these drinks more strictly for procedural reasons: He didn't want to make new law through the combination of the attorney general's opinion and his own veto. "I look forward to returning to the flavored malt beverage issue during the next legislative session, working with advocates on both sides, to build a broader consensus for regulating these alcoholic beverages," O'Malley said. "It is my opinion that the Constitution contemplates, and the public expects, major regulatory and taxation decisions of this nature to be made in the fullness of legislative consideration, not through the chance confluence of an opinion of the Attorney General and the veto of a Governor."

If that sounds like a load of hogwash, that's because it is. What happened here, according to Annapolis lobbyists, is that the governor caved to the loud and insistent efforts of the beer and liquor industry to retain the status quo. It certainly didn't hurt that this decision also allowed O'Malley to take a stand that tripped up Gansler's efforts to make political hay on the alcopops issue, which obviously plays well with the ambitious attorney general's base of concerned suburban parents. (Gansler played the gentleman in his reaction to the governor's decision, saying that there will indeed be a chance to change the law next session.)

Never underestimate the power of internal Democratic party rivalries to help steer the direction of policymaking in Maryland.

O'Malley is taking a beating from the advocacy groups that fight the alcohol industry. Will the lovers of Smirnoff Ice and its competitors rally to the governor's side to thank him for keeping their favorite beverages cheap? Hardly likely. So look for O'Malley to come back to this next year, searching for a middle course. Too bad, really, because this is the kind of issue on which a good, hard stance is the only path that sends the right message.

By Marc Fisher |  May 27, 2008; 8:00 AM ET
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Comments

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I am 'friends' with several former students from my days as a high school teacher.

I can say for certain that in the party photos they post, that these are the drinks of choice.

At that age, they drink not only what they can get their hands on, but what is the cheapest. If you tax something, the price goes up, and those not willing to spend the money on it will find something else. This could be a plethora of choices from cheap beer to rot gut liquor.

Sure you can tax it but they'll get something else.

I had one former student who mixed grey goose with koolaid. What a waste of decent vodka!

Frankly, I just see it as one more example of America's fear of lowering the legal drinking age like that of other countries.

Posted by: Former Teacher | May 27, 2008 8:52 AM

Link from front pages isn't working due to typo: hhttp://

Posted by: Kevin | May 27, 2008 9:09 AM

Here, here!
I think those unscrupulous profiteers at Scion ought to stop marketing cars to 15 year-olds too.

Posted by: SA | May 27, 2008 10:41 AM

I guess the underlying reason to tax "alcopops" at a lower rate than spirits is if you think of the tax on a per-drink basis. For beer or alcopop, one bottle is one "drink", more or less (though the alcopop likely contains more alcohol). In contrast, a 500ml bottle of vodka is sixteen one-ounce or eight two-ounce "drinks".

A related question would be the tax rate on bottled pre-mixed drinks like margaritas and such. Are they taxed on the volume of spirits or on the volume of liquid? I would assume an alcopop should be treated in the same way.

Posted by: Dave Scocca | May 27, 2008 11:31 AM

Maybe the Gov decided that using the tax code to engineer social policy isn't the best idea, despite the popularity of doing so. If you don't want them drinking, enforce criminal sanctions. Or better yet, eliminate the drinking age teaching your kids to drink responsibily.

Posted by: Tax as Social Policy | May 27, 2008 11:57 AM

I live in DC and I spend a lot of time with alcoholics in the Georgia Avenue corridor from Walter Reed to Howard university. over the past few years, I have personally seen what a change in price can do to the habits of people who are price conscious.

The drink of choice in this corridor used to to be 40oz 211 Steel reserve. They were dirt cheap. To reduce incidences of public intoxication, the price was raised and people switched to 24oz 211 singles.

Recently, singles were banned in this particular area and people have switched to six packs of Milwaukee's best ice. People change to the cheapest available alcohol. They do not quit. The only way you are going to discourage drinking is to rise taxes on ALL alcohol to such an extent that they become not affordable.

If all alcohol becomes too expensive, watch out for moonshine. It is already available right now on Sundays when liquor stores are closed. Just go to Georgia and Hamilton and ask for err.. never mind.

People don't quit just because the price goes higher, they just change to the cheapest available, like mouthwash.

Posted by: Nkhoma | May 27, 2008 11:59 AM

Twenty-five years ago in health class we were taught that there is no such thing as "good" alcohol and "bad" alcohol, ethanol is all the same whether it's in beer, wine or spirits. So it makes sense that liquor would be taxed at a higher rate than beer, because it has roughly ten times as much alcohol content.

The notion that the alcohol in the "alco-pops" is somehow "bad" alcohol compared to the "good" alcohol in beer -- simply because of the way it is produced -- is ridiculous and completely unsupported by science.

The rational thing would be to tax only the ethanol in beverages, not caring about how it was produced. Of course, governments aren't famous for acting rationally.

Posted by: Washpost4 | May 27, 2008 12:55 PM

I can't believe that I'm actually proud of a decision made by Gov. O'Malley. I don't have a strong opinion one way or another on this issue, but I have to say that his reasoning in not wanting to pass this through via the AG opinion and the bill veto is admirable. Following proper procedure and bringing this issue in front of the legislature in the next session will allow everyone's interests to be considered and allow our elected officials to make the judgement, instead of Gansler and O'Malley running the show. Keep it up, Gov.

Posted by: Kate | May 27, 2008 12:59 PM

"Tax as Social Policy" must be drinking some 15 year-old's Grey Goose Kool-Aid if he thinks that a politician would refuse to sign a sin-tax bill out of legitimate respect for the rule of law. My guess is that the alcohol lobby paid him off enough to not oppose it, but he wanted to keep his distance for political considerations.

Posted by: Leesburger | May 27, 2008 5:54 PM

So I guess MetLife is marketing insurance to kids because of its use the Snoopy character from "Peanuts"?

Posted by: Stick | May 28, 2008 8:38 AM

I don't have the words to express my disappointment in the Post's continued flogging of this anti-adult position, both here and in the editorials. Why does everything in our society, from books to tv to near-beers, have to be sanitized and handled 100% from the perspective of "think of the children!"

Plenty of adults enjoy those fruity beer concoctions, and though I think they're insane to prefer a Mike's Hard Lemonade over a quality beer, that's not a good reason to penalize them in the pocketbook. It's also just lazy and flawed thinking to claim that the industry is lying when they state who the drinks are targeted at just because kids drink them in qualtity. Just because these drinks appeal to kids doesn't mean they're targeted at them any more than Hitler liking dogs makes dog ownership an indication of racist thinking.

If there's a problem with youth drinking then that should be addressed in enforcement that doesn't penalize grownups any more than it already does. It's an annoyance for me, as I near 40, to continue to be harassed for ID when anyone with 20/200 vision can tell I am nowhere near 21, but it's not an unreasonable imposition. Asking people who prefer fruity to hoppy to pay a huge premium just because kids like those drinks too is not reasonable.

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Posted by: tujc9rzg77 | May 28, 2008 8:14 PM

For about the first paragraph, I was under the impression that there were new alco"pops" available on the market, in boxes of ten or so, for storage in one's freezer. I thought the angle would be that a frozen alcoholic treat on a stick would encourage younger consumption. It was only when I read further that my hopes were dashed. You're talking about alco-"sodas", a completely different thing.

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