BILL ANALYSIS �
SB 39
Page 1
SENATE THIRD READING
SB 39 (Padilla)
As Amended June 7, 2011
Majority vote
SENATE VOTE :24-14
GOVERNMENTAL ORGANIZATION 14-0APPROPRIATIONS 11-5
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|Ayes:|Hall, Nestande, Atkins, |Ayes:|Fuentes, Blumenfield, |
| |Block, Blumenfield, | |Bradford, Charles |
| |Chesbro, Cook, Galgiani, | |Calderon, Campos, Gatto, |
| |Gatto, Hill, Ma, Perea, | |Hall, Hill, Lara, |
| |V. Manuel P�rez, Torres | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
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SUMMARY : Prohibits the importation, production, manufacture,
distribution, or sale of beer to which caffeine has been
directly added as a separate ingredient at retail locations in
California, as defined. Specifically, this bill :
1)Provides that beer to which caffeine has been directly added
as a separate ingredient shall not be imported into this
state, produced, manufactured, or distributed within this
state, or sold by a licensed retailer within this state.
2)Provides that the Department of Alcoholic Beverage Control
(ABC) may require licensees to submit product formulas as it
determines to be necessary to implement and enforce this law,
as specified.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, ABC investigations are primarily complaint driven.
Therefore any enforcement of this legislation would be through
complaints. ABC does not anticipate a high volume of complaints
about caffeinated beer. Therefore, the costs associated with ABC
investigating complaints, reviewing product formulas, and
possibly having products tested, would be minor and absorbable
within existing resources.
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COMMENTS :
Federal response to caffeinated alcoholic beverages : On
November 12, 2009, the Food and Drug Administration (FDA)
notified nearly 30 manufacturers of certain alcoholic beverages
containing added caffeine of its intent to look into the safety
and legality of their products. The list of manufacturers was
provided to FDA in a letter from the co-chairs of the National
Association of Attorneys General Youth Access to Alcohol
Committee.
The FDA requested that the companies produce evidence of their
rationale, with supporting data and information, for concluding
that the use of caffeine in their product is Generally
Recognized As Safe (GRAS) or prior sanctioned. For a substance
to be GRAS there must be evidence of its safety at the
levels used and a basis to conclude that this evidence is
generally known and accepted by qualified experts. FDA informed
each company that if it determined that the use of caffeine in
each alcoholic beverage is not GRAS or prior sanctioned, FDA
would take appropriate action to ensure that the products are
removed from the marketplace. FDA's action was not directed at
products that are flavored with coffee. The beverages that were
the subject of FDA's request for information are characterized
by the intentional addition of caffeine to alcoholic beverages
by the manufacturer. FDA stated that "a decision regarding the
use of caffeine in alcoholic beverages could take some time."
More recently, in a letter dated November 17, 2010, the FDA
advised four companies (New Century Brewing Company, Boston, MA
- product known as "Moonshot;" Phusion Projects, LLC.,
Chicago, IL - product known as "Four Loko;" Charge Beverage
Corporation, Lake Oswego, OR - product known as "Core High
Gravity HG Green," "Core High Gravity HG Orange,"
"Lemon Lime Core Spiked;" and, United Brands Company, La Mesa,
CA - product known as "Joose" and "Max") that it had reviewed
the regulatory status of their products, each of which contained
caffeine that had been directly added to an alcoholic beverage
and packaged in combined caffeine and alcohol form. The
FDA letter warned the companies that as it was used in their
products, caffeine is an unsafe food additive, and therefore the
products are adulterated, unsafe, and illegal under the Federal
Food, Drug, and Cosmetic (FFDC) Act and mislabeled under the
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Federal Alcohol Administration (FAA) Act. The companies were
given a specific time-frame to submit detailed steps that would
be taken to correct the situation and assure that similar
violations would not occur.
The Tobacco Trade and Tax Bureau (TTB) also issued letters to
the same four companies and asked them to submit detailed steps
that would be taken to correct any violations of the FAA Act.
In November 2010, Phusion Projects, the creators of Four Loko,
announced before receiving the warning letter from the FDA that
they would be reformulating their malt beverage and would remove
caffeine from the product. Two manufacturers are still awaiting
approval or have not applied for permits to sell their
reformulated drinks. In addition, two companies have decided to
stop making their malt beverages altogether.
Flavored malt beverages : Flavored malt beverages (FMBs) are
considered to be malt-based beverages, similar to beer, and for
the most part are regulated and marketed like beer products.
Because they are deemed to be malt-based beverages they are
taxed by most states, including California, and the
federal government as beer. The current tax rate on beer is
$0.20 per gallon, while the current tax rate on distilled
spirits under 100 proof is $3.30 per gallon. A TTB regulation
permits the addition of flavors and other non-beverage materials
containing alcohol to beers and malt beverages. Malt beverages
that contain no more than 6% alcohol by volume may derive no
more than 49% of their alcohol content from flavors and other
non-beverage materials. If a malt beverage contains more than
6% alcohol by volume, not more than 1.5% of the volume of the
finished product may consist of alcohol derived from flavors and
other non-beverage ingredients containing alcohol.
Purpose of the bill : According to the author, caffeinated
alcoholic drinks have certainly made headlines over the past
year including a highly publicized incident at Central
Washington University involving approximately 10 students who
were hospitalized after drinking a product called "Four Loko" at
a party. Some states (e.g., New York, Massachusetts, Michigan,
Kansas, Utah, Oklahoma, and Washington) have even taken steps to
ban the products.
According to the author, combining alcohol with caffeine and
other stimulants does not ameliorate alcohol's negative effects
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on one's motor coordination and visual reaction times. Recent
science has revealed that adding caffeine and other stimulants
to alcohol is harmful because these additives impair one's
ability to judge their own level of intoxication as well as the
ability to judge the level of intoxication in someone else.
This results in increased alcohol consumption and can lead
drinkers to wrongly conclude that they are capable of engaging
in risky and potentially dangerous activities, like operating a
motor vehicle or engaging in risky sexual behavior.
The author emphasizes that there is no general consensus among
health professionals and the scientific research community that
the use of caffeine in alcoholic beverages has been demonstrated
to be safe. Alcoholic energy drinks are known for hiding true
impairment. Alcohol is a depressant, and the high amounts of
caffeine in these drinks counteract the exhaustion of the
alcohol but they do not counteract the impairment. This can
lead to a person not feeling they are impaired as they truly
are, and tragedy can result.
Proponents also contend that "manufacturers of these products
appear to be targeting underage people through youth-orientated
media marketing.
In support : Writing in support, the Alameda County Board of
Supervisors states, "There are currently a number of caffeinated
malt beverage products on the market that are targeted in
packaging and advertising to young people and these products
impair the ability of a person to judge their own level
of intoxication or to judge the intoxication of someone else.
SB 39 will help reduce the rates of alcohol-related traffic
accidents, violence, sexual assaults, and suicides, particularly
among young people."
Also writing in support, the County Alcohol and Drug Program
Administrators Association of California (Association) states,
"The beverages are often flavored with fruit, and typically come
in large, flashy cans that use graphic images to promote
partying and heavy drinking." The Association also
writes, "Underage drinking remains one of the most pressing
public health concerns for the State - it costs the citizens of
California an estimated $7.3 billion each year in medical care,
work loss, and pain and suffering stemming from alcohol related
youth violence, traffic accidents, property crime and other
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injuries."
The California Police Chiefs Association and the California
Narcotic Officers Association note that, "These products
typically come in large, flashy 24 oz. cans with graphic images
and consuming one can has been compared to drinking 5 cans of
beer and one cup of coffee."
The California Council on Alcohol Problems (CCAP) submitted a
letter supporting the overall concept of banning such products;
however, they believe that this bill does not go far enough to
protect California youth. CCAP would like to see the bill
amended to include other stimulants (e.g., guarana, ginseng and
taurine).
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531
FN: 0001564