BILL NUMBER:S8508

TITLE OF BILL:
An act to amend the alcoholic beverage control law, in relation to
providing enhanced penalties for licensees who sell certain alcoholic
beverages to persons under the age of twenty-one years

PURPOSE:
The purpose of this bill is to increase the criminal penalties for those
who sell caffeinated alcoholic Beverages (CABs) to persons under the age
of 21. CABs are defined, under this bill, as a beverage that has a
combination of two percent alcohol by volume and 5 milligrams of
caffeine per ounce or other stimulants that have a similar affect. 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.

SUMMARY OF PROVISIONS:
Section 1: Adds a new ABC Law section 65(7) to add to the list of
prohibited sales of alcohol, the sale of CABs to persons under the age
of 21. Under current law, any licensee, or agent of a licensee, (i.e.,
sales made in convenience stores, restaurants or bars) who sells, deliv-
ers or gives away any alcoholic beverage to a person under the age of 21
is guilty of a Class A misdemeanor. Under this bill, the criminal penal-
ty for such a transaction to sell CABs would be increased from a class A
misdemeanor to a class E felony. A class A misdemeanor is punishable by
a fine of up to $ 1,000, one year in prison or both. A Class E Felony is
              

punishable by a fine of up to $ 5,000, and indeterminate sentence of
between 1 and 3 years in prison, or both.

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. These sales points are also the same place
that teenagers can hang around at and purchase soda and snacks.  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, particularly among underage drinkers,
which combines 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 the use of CABs
by persons under the age of 21, include:

1) Individuals, particularly those under the age of 3D, 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 in a safe manner such as driving an auto-
mobile.

4} CABs are Commonly consumed by those who are under 21 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 alco-
hol 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 - 21. 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 21 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.

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 increase criminal penalties for those who
sell, deliver or give such dangerous alcoholic beverages to persons

under the age of 21. The two per centum of alcohol by volume standard
contained in this bill is slightly less than that which is contained in
beer which is generally between 3.2 % to 5% alcohol content by volume.
The Five milligrams per ounce of caffeine is above the amount of
caffeine found in most sodas (i.e., 2 to 4.9 mg of caffeine), but is
less than that which is found in coffee or tea (i.e., 7 to 20 mg of
caffeine).

While the CAB thresholds contained in this bill for alcohol and caffeine
may sound low, the combination of these two ingredients can be addicting
and sometimes can have a lethal affect, particularly when consumed by
underage drinkers. Indeed, most CABs have an average alcohol content, by
volume of between 5 percent and 12 percent. These high level alcohol
beverages are combined with caffeine levels well in excess of 10 mgjoz
to 50 mgjoz or have other stimulants such as guarana, ginseng, or tarine
added.  This combination makes these beverages highly unsuitable for
consumption by persons under the age of 21. Further, these CABs are
formulated to taste sweet with fruit flavor overtones that mask the
taste of alcohol present in these drinks specifically to target underage
drinkers.

In sum, they are manufactured specifically with the idea of gearing
their sale to persons under the age of 21. These CABs are also packaged
to look like other energy drinks which are now already being consumed by
underage drinkers. An while it may be an anomaly to have a heightened
level of punishment for selling CABs to persons under the age of 21 when
compared to selling spirits or wine, CABs are much more attractive to
minors, hence the need to a heightened penalty for the sale of these
beverages to those under the age of 21.

For all of the reasons above, New York must change its public policy to
dampen the sale and consumption of these dangerous beverages to persons
under the age of 21.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect 30 days after it shall have become law.