Senate Bill S8509

                                BILL NUMBER:S8509

TITLE OF BILL:
An act to amend the alcoholic beverage control law, in relation to
prohibiting the sale of caffeinated or stimulant-enhanced alcoholic
beverages

PURPOSE:
The purpose of this bill is to ban the sale of all caffeinated or stimu-
lant enhanced alcoholic beverages (hereinafter CABs) in New York.  CABs
are defined, under this bill, as a beverage with a combination of
between 5 and 15 percent alcohol by volume (beer contains between 3.2%
and 5% alcohol by volume) and 6 milligrams of caffeine or other stimu-
lants per ounce (most sodas contain between 2 to 6 mg of caffeine per
ounce, and coffee and tea can contain between 7 to 20 mg of caffeine per
ounce).

These caffeinated or stimulant-enhanced alcoholic beverages (CABs) are
now being actively marketed to and increasingly used by those who are
between the ages of 14 to 25. Currently, there is concerns that CABs
have questionable health effects on those who consume the product, espe-
cially those under the age of 25.

SUMMARY OF PROVISIONS:
Section 1: Amends ABC Law section 3(3) to revise the definition of beer
so that it does not include caffeinated or stimulant-enhanced alcoholic
              

beverages CABs. CABs are defined as alcoholic beverages that have more
than 5% alcohol by volume (slightly less than the amount of alcohol
contained in beer) and also contains 6 mg per ounce of caffeine or any
other stimulant, including, but not limited to guarana, ginseng,
taurine, or wormwood oil, that has an equivalent effect as such quantity
of caffeine. Under current law, most CABs are considered to be a "beer"
or malt liquor product, hence they are able to be sold in convenience
stores and grocery stores.

This section also adds a new definition to the ABC Law to define
"Caffeinated or stimulant-enhanced alcoholic beverages". This provision
was added to ensure that all CABs that are currently sold in stores can
no longer be sold in the state by any retailer of beer or liquor. Under
this definition, a CAB has an alcohol content over 5% alcohol, but less
than 15% alcohol.  Currently, all or practically all CABs that are sold
in New York have an alcohol content of less than 12% alcohol, hence for
all intents and purposes, all CABs would be banned for sale in New York.
The reason for the upper limit threshold is to exempt the many and popu-
lar coffee based alcoholic beverages that are currently sold in New York
liquor stores. Examples of these products include Kahlua, Tia Maria,
Petrones Cafe, Cafe Aztec, and many other such products. The differen-
tiation between these coffee based products and CABs is that caffeine is
naturally occurring in coffee and herbs such as guarana, ginseng,
taurine or wormwood oil are not added. Further, these products are sold
exclusively in liquor stores which can only be patronized by adults.  In

addition, coffee-based alcoholic beverages tend to be mixed with milk or
cream which makes them heavier and less vulnerable for over consumption.
However, CABs tend to be lighter in body, sweeter to mask its alcohol
content, and hence, are more easily subject to over consumption and
abuse.

Section 2: Adds a new ABC Law section 100(8) that provides for a general
prohibition for the sale, delivery, or giving away of any caffeinated or
stimulant-enhanced alcoholic beverage (CABs)to another person in New
York.

JUSTIFICATION:
Energy drinks are designed to make individuals "feel" more aware and
awake. To do this, such drinks contain stimulants such as caffeine,
guarana, ginseng, taurine, or wormwood oil 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
the ages of 14 to 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 or partially malt based beverages, and there-
fore, can be sold in the same places as beer and malt liquor, i.e.,
supermarkets, convenience 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 the sale and
consumption of 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 amounts 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 along.  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
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 or other stimulant
levels added to the beverage, the high alcohol 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 consuming such beverages.

The purpose of this bill is simple, to ban the sale of caffeinated or
stimulant-enhanced alcoholic beverages because these products are
dangerous to its consumers and to the general public due to public safe-
ty and public health concerns, particularly for those under the age of
25.

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 bans the sale of CABs so that there will be no way
to confuse alcoholic based energy drinks from those that do not contain
alcohol.

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, so
that current inventories of CABs can be exhausted before this bill goes
into effect. In addition, the State Liquor Authority shall promulgate
rules and regulations to implement this act within 120 days of the
effective date of this act.