BILL NUMBER:S3889

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
stimulant 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 stimulants 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,
especially 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 popular 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 differentiation 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
therefore, 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 individuals feel more aware, but this "feeling" of awareness
does not actually 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 beverage 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 legality 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-alcoholic 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 officers 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
manifestation 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
safety 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:
2010 - S.8509 - REFERRED TO RULES

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.