BILL NUMBER:S8485

TITLE OF BILL:
An act to amend the alcoholic beverage control law, in relation to
requiring the segregation of certain alcoholic beverages with a stimu-
lant sold for off-premises consumption and the labeling of containers
containing certain alcoholic beverages

PURPOSE:
The purpose of this bill is to expand the State Liquor Authority's (SLA)
ability to review the labels of all caffeinated alcoholic beverage
containers (hereinafter CABs). CABs are defined, under this bill, as a
beverage with a combination of two percent alcohol by volume and 5
milligrams of caffeine per ounce. These caffeinated alcoholic beverages
(CABs) are now being actively marketed to and increasingly used by those
who are between the ages of 14 to 25. Enacting more rigorous labeling
standards and consumer disclosure warnings should help to ensure that
such products cannot be confused with other high energy drinks that do
not contain alcohol and which can be legally purchased by minors.

SUMMARY OF PROVISIONS:
Section 1: Amends ABC Law section 105 to add a new paragraph (13) to
require licenses that sell CABs for off-premise consumption to post a
warning notice about the possible adverse health effects of CABs, that
they are alcoholic beverages that should be used with caution, and that
such beverages cannot be consumed by persons under the age of 21. The
              

SLA is to approve, by regulation, the size and text of such sign to be
posted in such CAB section.

Section 2: Amends ABC Law section 107-a(2) to enact more stringent label
approval standards for CABs. Under current state law, the labels on all
containers of beer, malt liquors, and liquors that have been approved by
the Federal Alcohol & Tobacco Tax & Trade Bureau (TTB) are deemed
approved upon filing with the State Liquor Authority (SLA) 30 days after
such label is filed with the SLA. This bill gives the SLA 120 days to
review such label applications so that the Authority has sufficient time
to review each application for a label for caffeinated alcoholic bever-
ages.

Under this bill, the SLA can only approve container labels. or beverage
containers that have a disclosure warning affixed to such container that
states: A) this is a combination caffeinated alcohol beverage and the
health effects of such consumption are unknown at this time, B) however,
over consumption may cause future cardiovascular or neurological health
problems, C) the stimulant in this beverage may mask the impairment
qualities of the alcohol that is also in this product, D) the use of
motor vehicles and other machinery should be avoided after consuming
this product.

In addition, the SLA, when reviewing a container label must ensure that
such label cannot easily be confused with other energy drinks or bever-

ages.  Further, such label should not be designed so as to be attractive
to or encourage the consumption of such product by persons under the age
of 21.  The container label may be approved if a disclosure warning
statement similar to the statements contained in Paragraph (2) (a)of the
bill are affixed to the container. In addition, such disclosure warning
statement must indicate that this beverage contains alcohol and cannot
be sold to or consumed by persons under the age of 21.

Under this bill, a CAB is defined as being a beverage that has over 2 %
of alcohol by volume and 5 milligrams per ounce of caffeine or any other
stimulant that has a similar effect. As a point of reference with CABs,
carbonated sodas range between 3 - 5 mg/oz of caffeine, coffee contains
between 9 - 18 mg/oz, and energy drinks commonly range between 9.5 - 175
mg/oz, with the mean average being between 9 - 20 mg/oz, with some
outlying beverages containing 500 mg/oz. Frozen desserts such as coffee
ice cream have between 7 - 10 mg/oz, and milk chocolate contains about 6
mg/oz.

Section 3: Amends ABC Law section 107-a(2)so that labels filed with the
SLA are not automatically deemed approved until 120 days after filing
with the authority, instead of 30 days as is now the case for all label
approvals for beer, malt liquor, or liquor.

JUSTIFICATION:
Energy drinks are designed to make individuals "feel" more aware and
awake. To do this, such drinks contain stimulants such as caffeine,
guarana, or ginseng, and may also contain proteins and vitamins.

Energy drinks are the fastest growing sector in the beverage market.
Energy drinks are primarily marketed to and consumed by persons between
14 35 years old. One of the leading brands in this market, Red Bull, was
created in Austria and introduced into the U.S. market in 1997. Red Bull
and other energy drinks, have become popular mixers at bars and night
clubs, with the Vodka Red Bull being one of the more popular drinks that
mix alcohol and caffeine.

The popularity of mixing energy drinks with alcohol at bars has led to
the introduction of energy drinks premixed with alcohol. Many of these
beverages are primarily malt based beverages, and therefore, can be sold
in the same places as beer and malt liquor, i.e., supermarkets, conven-
ience stores, and bodegas. High alcohol CABs such as Joose and Four Loko
are examples of this trend.

Clinical and field studies conducted in the past few years have found
that the over consumption of CABs that combine high amounts of alcohol
and stimulants, such as caffeine, raises significant public health and
safety concerns for both the consumer and for the public at large. Among
the "Top 10" concerns raised by researchers about CABs include:

1) Individuals, particularly those under the age of 30, who combine
alcohol with stimulants engage in riskier drinking behaviors and drink a
greater amount in each session. The stimulants used in CABs make indi-

viduals feel more aware, but this "feeling" of awareness does not actu-
ally decrease the levels of impairment or coordination, reflexes, and
judgment that result from excessive alcohol consumption.

2) Individuals are less able to judge their actual levels of inebriation
when consuming CABs. This can lead individuals to consume more alcohol
than they would otherwise consume if just consuming an alcoholic bever-
age alone. Normally, with the consumption of alcohol (a depressant),
consumption goes down as the drinking event progresses because the
subject becomes more tired.  Instead, with CABs, the consumer becomes
drunk, but more awake, which can lead to the further consumption of
alcohol. The Marion Institute stated that this product "brilliantly
keeps them alert and wanting to keep drinking the product". Other
studies have demonstrated that consumption of such beverages leads to
significantly higher levels of episodic drinking and episodes of weekly
drunkenness. There have been examples in Westchester County of underage
persons getting alcohol poisoning because they drank CABs to excess and
did not have the inhibition needed to stop consuming these CABs.

3) Consumption of CABs makes such persons think that they can mistakenly
undertake dangerous activities such as driving an automobile.

4) CABs are commonly consumed by underage drinkers and those who are
under 25 years of age who are generally less sophisticated about when
and how to properly consume alcoholic beverages. This can lead to higher
incidences of physical injury, sexual assault, becoming the victim of
sexual assault, and alcohol poisoning. In addition, underage consumers
tend to already have underdeveloped decision making skills, which the
consumption of alcohol clouds further.

5) CAB manufacturers have aggressively geared their product packaging,
marketing programs, and the taste of their product to further draw
consumers between the ages of 14 - 25. Currently, the existing CAB
market is male dominated, however, manufacturers are shifting their
attention to obtain a larger female consumer base, by offering CABs that
are touted as being "light", "sugar-free" or "low carb". In sum, the
trend is for more individuals between the ages of 14 and 35 to consume
such products, not less.

6) The long term health effects of consuming high levels of alcohol (a
depressant) and caffeine (a stimulant) are not known. However, having
two agents in the same beverage that have opposite effects has generally
been considered to be detrimental to long term health. The Federal Food
and Drug Administration (FDA) is now looking into the safety and legali-
ty of these beverages. Those experimental studies that have been
conducted have not established the safety of co-ingesting caffeine and
alcohol, but there are indications that it may heighten the risk of
cardiovascular and neurological damage.

7) Both alcohol and caffeine are diuretics; therefore, the combination
of these two substances in one beverage can leave the consumer severely

dehydrated. Further, the high sugar levels of CABs does speed up the
absorption of alcohol into the blood stream.

8) The prime market for CABs and for all energy drinks is the same,
persons between 14 and 25 years of age. In general, CABs are sold at
relatively low cost to a demographic group that does not have a lot of
money. Further, these beverages are priced much lower than beer to
retain and expand market share. While many CABs have alcohol content
well above beer and sometimes at the level of wine, its excise tax rate
is assigned at the same level as beer, the lowest level of excise taxes
levied and collected. This low cost of the product makes them extra
attractive to young people, who have been shown to be very price
conscious.

9) The labeling of CABs is very similar to that of non-alcoholic energy
drinks, and meant to be attractive to young people. Energy drink maker
Rockstar, introduced an alcoholic version called Rockstar 21 and the
extreme similarity in labeling of the company's alcoholic and non-alco-
holic energy drinks lead to an outcry which forced Rockstar 21 from the
market. Other alcoholic energy drink makers continue to produce cans
that are brightly colored with bold designs meant to project an image of
energy common with regular energy drinks and inherently more attractive
to younger consumers.  With new brands of CABs and energy drinks going
on the market all of the time, this lack of clear labeling as to what is
alcoholic and not alcoholic can confuse store personnel and police offi-
cers as to which products have alcohol or not. This can lead to law
enforcement problems in accurately identifying which beverages can be
sold to or possessed by minors and which beverages are subject to open
container laws.

10) Easy access to CABs by underage drinkers in convenient stores and
bodegas can encourage youth to start drinking alcohol earlier in life
and can significantly increase alcoholism later in life and the manifes-
tation of other addictive behaviors, such as gambling and substance
abuse, in the future.

The rapid expansion in the market share of CABs has raised questions
about how these drinks are formulated, their caffeine levels, and alco-
hol content, and whether they are properly classified as malt beverages
under federal and state law. In 2007, 28 state Attorney Generals
contacted the TTB to inquire about the questions outlined above.
Further, the FDA is making similar inquiries about the safety of consum-
ing such beverages.

The purpose of this bill is three fold. First, it is to tighten the
labeling requirements of CABs so that a notice is placed on the beverage
container and at the point of sale to warn its users that repeated use
of such products may be unhealthy, particularly for those under the age
of 25.

Second, these beverages tend to be consumed by persons under the age of
30 and those who are not legally able to purchase alcoholic beverages.

From the perspective of law enforcement officials and store sales
personnel, the look of labels for certain high energy drinks that have
alcohol and do not have alcohol are indistinguishable.  Therefore, it is
difficult for law enforcement to screen underage drinkers or those
persons who are violating the open container law.  Further, for store
personnel, it is also difficult to differentiate between alcoholic and
non-alcoholic beverages. This bill ensures that such containers are
easily distinguishable so that alcoholic beverages can be clearly iden-
tified from non-alcoholic beverages.

Third, caffeinated alcohol drinks are overwhelmingly consumed by persons
under the age of 30, and many are consumed by underage drinkers.  This
bill ensures that these beverages should not be packaged to attract
underage consumers of alcohol. A similar standard has been instituted
for commercials and advertising related to tobacco products, including
their packaging, for many decades.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect 270 days after it shall have become law,
provided however, the State Liquor Authority shall promulgate rules and
regulations to implement this act within 120 days of the effective date
of this act.