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Washington Report

December 2004

Produced by the Alcohol Policies Project of the Center for Science in the Public Interest, Washington Report provides online information and updates about domestic and international alcohol-policy issues, including alcohol advertising and marketing, labeling, product development, taxation, and industry political and commercial initiatives.  Washington Report also provides action alerts to inform advocates of opportunities to promote and influence pro-health alcohol policies.

In this Edition:

Federal Developments

Advocacy News

Industry Watch


Federal Developments



Update on the "STOP Underage Drinking" Act (HR 4888 and S 2718)

For information related to Federal Policy, please contact Kim Hennemeyer, Manager of Federal Relations

Related Links:

  House sponsors

  Senate Sponsors

Although the STOP Act was introduced late in the 108th Congress (July, 2004), the National Alliance to Prevent Underage Drinking (NAPUD) and other prevention advocacy groups worked hard to turn out co-sponsors on both the House and Senate bills. A solid showing of co-sponsors would better position the bills to draw new co-sponsors when re-introduced early in the 109th Congress.


Despite those advocacy efforts, the closing months of the 108th Congress and the pre-election period proved to be a challenging environment for attracting co-sponsors. An August 2004 House/Senate letter from segments of the alcoholic-beverage industry (NBWA, ABI, WSWA, and ABL) discouraging co-sponsorship may have also dampened support for the bills. To date, the House bill has garnered 19 co-sponsors and the Senate bill has nine.

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The bills’ authors have vowed to re-introduce the legislation early in the 109th Congress after it convenes in late January, and with our support they’ll launch a renewed push for its passage.



Senate Urges Stronger Role for Surgeon General in Underage Drinking Prevention

Related Links:   

Text of the Senate language  [PDF] 

Despite numerous calls to action over the years on a range of public health issues, the Surgeon General has never undertaken an initiative on underage drinking prevention – the nation’s number one youth drug problem. The recently passed omnibus FY 2005 spending bill included Senate report language urging the Surgeon General's office to issue a national "Call to Action" on underage drinking. The non-binding language expressed the position of the Senate that the Surgeon General “should” be fully engaged in efforts to combat underage drinking, and “strongly urged” the Surgeon General, in coordination with SAMHSA, to issue a “Call to Action” on the health crisis of underage drinking.

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Ad Council Begins Work on PSA Campaign to Reduce Underage Drinking

Related Links:

The Advertising Council

In mid-November, executives at the Ad Council announced that it will be creating an underage drinking prevention PSA campaign under contract to the Substance Abuse and Mental Health Services Administration of the U.S. Department of Health and Human Services (SAMHSA). Consistent with recommendations of the Institute of Medicine’s September 2003 report on reducing underage drinking, the multi-media campaign (television, radio, print, and internet ads) will target parents to talk to their children about underage drinking. The key target audience will be parents of 11-15 year-old children; secondary targets include all parents of underage children.

Creative development for the campaign, following an intense research approach, will come from the Kaplan Thaler Group, which will participate on a pro bono basis. SAMHSA will review and approve all creative. When complete – perhaps as early as August 2005 – the campaign will be distributed nationally, and broadcasters and others will be requested to donate time and space, similar to other Ad Council campaigns. Ad Council staffers expect some $30 million in donated media. Through the efforts of Reps. Roybal-Allard (D-CA) and Wolf (R-VA), Congress provided $800,000 in FY 2004 appropriations to begin what is expected to be at least a three-year campaign. The FY 2005 appropriation is $250,000.

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TTB Announces Alcohol Beverage Advertising Program

Related Links:

Full text of Industry Circular 2004-6 [PDF] 

In early December, the Alcohol and Tobacco Tax and Trade Bureau (TTB) released a November 19, 2004 Industry Circular (2004-6) announcing a new Alcohol Beverage Advertising Program.  That Circular signals TTB’s intent to be more proactive in monitoring and reviewing alcohol advertising for compliance with the legal standards of the Federal Alcohol Administration Act. Under the new program, TTB will request selected advertising materials for compliance review, in addition to continuing to offer voluntary review of pre-publication industry advertising materials. The reviews will examine materials such as posters, flyers, point of sale materials, press releases, web sites, web page materials, magazine and periodical ads, as well as television and radio advertisements.  Among other requirements, TTB will review:

• The presence of mandatory information, such as the name and address of the responsible advertiser and product class/type information;
• Statements or depictions that are inconsistent with approved product labels;
• Statements that are false, misleading, or deceptive;
• Statements, designs, or the use of subliminal representations that are obscene or indecent;
• Misleading or false curative or therapeutic claims;
• The form and use of mandated and optional alcohol content statements;
• Misleading references to carbohydrates, calories, fat, protein, and other macronutrients or “components;” and,
• Specific health claims and health related statements.

Please look out for questionable advertising and marketing, especially for products such as alcopops and “energy beers,” many of which contain dietary supplements such as vitamins, ginseng extract, caffeine or other additives. Please forward such materials to CSPI.

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Proposed “Serving Facts” Labels Prompt Inter-Industry Battle

Related Links:

CSPI Labeling Petition


Since late summer, the Alcohol and Tobacco Tax and Trade Bureau (TTB) has circulated two draft “white papers” to inform producers who want to add “serving facts” information to their product labels. TTB’s action comes in response to a labeling request from liquor giant, Diageo, which would like to list nutrition information as well as promote the concept of alcohol “equivalency.” That company has sought permission to list information about alcohol content and serving size, servings per container, calories, carbohydrates, fat, and protein. TTB’s “white papers” spawned heated objections from the wine and beer industries, both of which have attacked the informal comment process as well as the substantive proposal. Both industries indicated a preference for formal rulemaking on labeling issues – citing the 2003 petition from CSPI and the National Consumers League as a possible vehicle – and complained that the proposal was potentially misleading and inappropriately promoted the liquor industry’s “political agenda.”

Industry political heat seems to have improved the chances that TTB will consider our petition for “alcohol facts” labeling, although it is not yet clear whether Treasury Department officials – who need to endorse any TTB proposal for rulemaking – will be willing to allow the rulemaking process to proceed.

In a related event, the Center for Government Reform, a conservative policy think-tank, unexpectedly released poll results that attacked the concept of “alcohol equivalency.” The poll findings suggest that consumers believe liquor to be worse than beer because the alcohol is more concentrated. The survey concludes that the public finds the spirits industry’s equivalency message to be a misleading marketing ploy designed to level the regulatory playing field among beer, wine and spirits. Implicit in this poll is the repudiation of the liquor industry’s efforts to promote the concept of a standard drink, based on alcohol content. A Center official commented that the equivalency campaign “… is a classic example of how commercial interests use the mantle of public health and safety to advance their agenda. Inevitably this results in more taxes and regulation….” Sounds like the beer talking!

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Election Results May Affect Federal Policy Agenda


November’s Republican sweep of the Presidency and expansion of power in both houses of Congress will undoubtedly influence the direction of efforts to promote alcohol-policy reform. As the health and social problems associated with underage and excessive drinking continue to grow – and as alcohol producers become even more aggressive in marketing their products to young consumers – our primary task with both the Administration and Congress will be to ensure that alcohol policy issues stay on the political agenda. As a force for the prevention of alcohol problems, we must put government officials and policy makers on notice that they will be held accountable by activists around the country for their stewardship on alcohol issues. We don’t expect much change within the Administration, which has shown little interest in alcohol policy issues during the President’s first term. The Alcohol and Tobacco Tax and Trade Bureau (TTB), which is buried within the Department of Treasury, has either rebuffed or delayed rulemaking on labeling and alcopop issues, and seems caught in a political battle between beer and liquor interests. Although TTB officials assure us that Treasury Department executives are responsive to consumer and public health concerns, there has been no tangible enthusiasm for new rulemaking or for actions that confront powerful industry interests.

During the first term, the Department of Health and Human Services maintained a conspicuous silence on alcohol-related issues. We found it notable that not one HHS official commented publicly on the release of the recommendations of the NAS/IOM report on underage drinking or on the introduction of the bipartisan/bicameral STOP Act. Nor did one HHS official testify at Senate and House hearings on underage drinking. Despite numerous efforts to secure his involvement in those issues, Surgeon General Richard Carmona has been equally silent, even resisting requests that his office issue a “call to action” on underage drinking. The Interagency Coordinating Committee to Prevent Underage Drinking (ICCPUD, managed by HHS’ Substance Abuse and Mental Health Services Administration) has yet to issue a long-awaited report on the NAS recommendations. That report is not expected to propose far-reaching or novel reforms nor meaningfully address the recommendations of the NAS report. We understand that the ICCPUD report’s recommendations are premised on the assumption that there will be “no new funding.”

Although the Federal Trade Commission has twice addressed alcohol advertising and underage drinking issues recently, in response to Congressional directives, we believe it will be more difficult than ever to get Congress to make similar demands of the agency in the next Congress.

Congress presents a somewhat greater enigma. To date, our efforts to implement a national media campaign to prevent underage drinking have been decidedly non-partisan and bi-partisan. We have strong champions from both parties in both houses, including important subcommittee chairmen. However, aggressive industry lobbying against underage drinking prevention legislation has hampered our efforts to secure broad bipartisan support for this initiative. Even the modest STOP  Underage Drinking Act (which includes a $1 million pilot media campaign proposal) garnered fewer than 20 sponsors in the House and nine in the Senate during the final session of the 108th Congress. Admittedly, the bill was filed late in the session, before the August recess, during a hotly contested election; but, for whatever reason, it has not exactly caught fire.

Although we expect a challenging atmosphere in the new Congress, we are hopeful that our underage-drinking related initiatives will receive a better reception than in the waning days of the 108th. The STOP bill has strong appeal in both parties and promotes important “values” issues that are consistent with majority interests. Recent headlines about young alcohol-poisoning deaths, and even the expansion of liquor sponsorship into NASCAR could help raise awareness and strengthen the need for action. Despite its small price tag, industry will continue to frame the bill as an assault on small business and a wasteful and duplicative government expenditure.

Our biggest challenge will be to keep the issue on Congress’ radar screen. We have plenty of competition, including the potential for protracted and divisive debate and deliberation regarding runaway budget deficits, “big-picture” issues such as Social Security and tax reform, defense spending, and Homeland Security. Funding for discretionary government programs will be on the chopping block, and, with the increasing political and appropriations control in the hands of House and Senate majority party leaders, we anticipate tough going ahead for anything that costs money or imposes additional responsibilities on government. The modest STOP Act, which calls for a mere $19 million in appropriations could be discarded or severely cut back.

Nonetheless, we expect the STOP Act to be introduced early in the next Congress, and NAPUD will help recruit co-sponsors and push for hearings. Our success, however, will depend almost entirely on Congressional contacts made at the local level. Unless this issue has legs at home in each Congressional district, members will be unlikely to buck the opposition from powerful alcohol interests at home and in Washington.


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Outlook for Prospective Congressional Committee Changes


President Bush's success in securing a second term helped his party gain seats in both the House and Senate. There will be new lawmakers to educate, new staff people to meet, and new champions to create.

The current party balance in the House stands at 232 GOP members and 201 Democratic members (the fewest since 1931), compared to the 108th Congress's 229 to 205 GOP majority. In the Senate, the Republicans gained four seats, making the new ratio 55 to 44, plus one independent. The Senate is now within 5 votes of being ‘filibuster-proof.’

Senate Democrats on November 16 elected a new slate of leaders. Senate Minority Whip Harry M. Reid (D-NV) will take over the top Democratic post as Minority Leader next year, filling the shoes of defeated Sen. Thomas A. Daschle (D-SD). Sen. Richard J. Durbin (D-IL) will assume Reid’s former position as Minority Whip. There were no changes to the House or Senate majority leadership.

Committee ratios and allocations of committee budgets and staff positions between the majority and minority are expected to shift in favor of the strengthened GOP majority. The allocations are subject to negotiations, rather than House or Senate parliamentary procedures. Changes in the appropriations process may also be in the offing to help quell dissent, further restrict the independence of appropriations chairpersons, and impose greater discipline on earmarking practices.

House and Senate leadership have not yet finalized committee assignments for the 109th Congress, but a few expected or possible changes (subject to revision, of course) of relevance to our issues are as follows:

Senate Health, Education, Labor and Pensions (HELP) Committee:
Sen. Michael Enzi (R-WY) is expected to replace Sen. Judd Gregg (R-NH) as chair of the Senate Health, Education, Labor and Pensions Committee for the 109th Congress. Gregg is expected to be named chair of the Budget Committee.


Senate Labor HHS Appropriations Subcommittee:
Arlen Specter (R-PA) is expected to remain as Chairman, with Tom Harkin (D-IA) as ranking Democrat. Democrats have one vacancy with Hollings’ (D-SC) retirement.

Senate Finance Committee:
Sen. Charles Grassley (R-IA) will remain Chairman of the Senate Finance Committee. Leaving the Senate Finance Committee are Sens. John Breaux (D-LA), Tom Daschle (D-SD), Bob Graham (D-FL) and Don Nickles (R-OK).

House Labor HHS Appropriations Subcommittee:
Rep. Ralph Regula (R-OH) is in the running for Chairmanship of the full appropriations committee. If successful, Rep. Ernest Istook (R-OK) will be next in line to succeed him as Chairman of the Labor HHS appropriations panel.

House Ways and Means Committee:
Rep. Bill Thomas (R-CA) will remain Chairman, with Rep. Nancy Johnson (R-CT) serving as Chairperson of the Health Subcommittee.

House Ways and Means Subcommittee on Health:
The subcommittee will have three vacancies with the defeat of 38-year incumbent Phil Crane (R-IL) and retirement of Jennifer Dunn (R-WA) and Jerry Kleczka (D-WI). Also leaving the House Ways and Means Committee are: Reps. Mac Collins (R-GA), Amo Houghton (R-NY), and Max Sandlin (D-TX).


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Libertucci to Leave as TTB Director

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Arthur Libertucci, the current director of the Alcohol and Tobacco Tax and Trade Bureau (TTB), will retire in January.  Libertucci served at TTB and its predecessor agency, the Bureau of Alcohol, Tobacco, and Firearms, for 35 years.  He is suceeded by John Manfreda, who is currently TTB's Deputy Administrator.  In his tenure at TTB, Libertucci helped improve the agency’s capability to enforce statutory requirements, particularly relating to the collection of taxes.  Libertucci’s retirement is not expected to affect the (slow) progress of efforts to expand consumer labeling of alcoholic beverages.


Leavitt Nominated to Take the Helm as Secretary of Health and Human Services

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Michael Leavitt, Utah's governor for 11 years before accepting a post at the Environmental Protection Agency in late 2003, was recently nominated as Secretary of Health and Human Services (HHS). Leavitt would succeed HHS Secretary Tommy Thompson, who recently resigned.

As governor, Leavitt supported tougher laws and penalties for drunken drivers. Utah achieved the lowest percentage of alcohol-related highway deaths of any state from 1998 to 2003, according to the National Commission Against Drunken Driving. Leavitt is also a former board member of the American Legacy Foundation, an influential tobacco prevention organization.

Leavitt is a father of five and devout Mormon. Before becoming governor, he was chief operating officer of the Leavitt Group, an insurance firm.





Advocacy News



National Alliance to Prevent Underage Drinking (NAPUD) Forms

For information related to Advocacy News, please contact Amy Gotwals, Manager of Grassroots Advocacy.

Related Links:

NAPUD Home Page 

CSPI's Alert


Launched in July, 2004, the goal of the National Alliance is to implement a national strategy to prevent and reduce underage drinking, as identified in the National Academy of Sciences' (NAS) September, 2003 report to Congress entitled, "Reducing Underage Drinking: A Collective Responsibility." NAPUD now includes 26 member organizations, and new organizations are welcome to join.

NAPUD’s initial efforts focused on building support for the "STOP Underage Drinking" Act (HR 4888 and S 2718). The modest $19 million bi-partisan, bi-cameral bills represent an important first step in implementing some of the NAS/IOM recommendations. The bills also provided an important vehicle to begin engaging members of Congress on the underage drinking issue and building the case for stronger federal action in this area.

NAPUD sent a sign-on letter to Congress in support of the bills, and several NAPUD members sent their own House and Senate letters calling for co-sponsorship. NAPUD members additionally circulated action alerts on the bills to their respective networks.

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The Campaign for Alcohol-Free Sports TV Revs Up


During the past several months, CSPI’s Campaign for Alcohol-Free Sports TV has continued to build momentum to end alcohol advertising on televised college sports events. With support from more than 175 national, state, and local organizations and growing visibility in the national press, the call to break the tie between college sports and beer advertising is now squarely on the desks of top college administrators.

Since January, 227 colleges, 22% of all schools in the National Collegiate Athletic Association (NCAA), have signed the College Commitment, pledging to end alcohol ads on local broadcasts of their sporting events and to vote within their conferences and the NCAA to end alcohol ads on all televised college sports events.


While support from scores of schools in NCAA Divisions II and III provides an important boost to the drive, Division I schools with big athletic programs will ultimately determine the fate of the College Commitment. The bulk of the $58 million of alcohol advertising on college sports broadcasts in 2002 appeared on games involving the largest college football and basketball programs in the country. Nearly half of the 2002 college advertising total — $27 million — aired during the NCAA men’s Division I college basketball tournament.

As of the end of November, 59 Division I schools (18% of the division) have signed the College Commitment. That list includes the Ivy League and the Big South Conference, as well as Ohio State, Northwestern, and Minnesota from the Big Ten Conference. This strong base of support will enhance the intensive grassroots, media, and lobbying campaigns that will be waged during the coming months to convince other Division I schools that it is in their best interests – and the interests of their young fans – to join the effort to reduce youth exposure to alcohol advertising on their games.

The College Commitment campaign has also attracted support from respected college sports legends, who have joined U.S. Rep. Tom Osborne and former coach Dean Smith in speaking out on the issue. They include John Wooden, Hall of Fame former basketball coach at UCLA, Penn State football coaching icon Joe Paterno, Connecticut men’s NCAA basketball champion coach Jim Calhoun, and Rene Portland, women’s basketball coach at Penn State.

To learn more about the Campaign for Alcohol-Free Sports TV – and to become involved in the growing College Commitment drive – go to our website or contact us at (202) 777-8385.

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Anheuser-Busch Defends “Referee” Ad Campaign

Related Links:

CSPI’s Letter to the Beer Institute [PDF] 

Anheuser-Busch Response [PDF]

 Beer Institute Voluntary Advertising Guidelines  [PDF]

New ads for Anheuser-Busch’s Bud Light feature mock referees, who make off with Bud Light from a party and then get caught by the police while apparently transporting the beer to their own party. When confronted by the police, they lie and then run to evade questioning and capture. CSPI complained to the Beer Institute about the ads of one of its members, asserting that they violate the beer industry’s voluntary advertising code, in particular by portraying illegal activity in connection with beer sales or consumption. We received no response.

A few days later, however, A-B’s Vice President for Consumer Affairs, John Kaestner, wrote CSPI to defend the ads, claiming that the spots did not “promote” illegal activity and that “they are clearly meant to be a spoof of the spots currently being run by our competitor.” He claimed that the illegal actions in the ads are “part of the over-the-top humor that makes the spots funny.” Last we looked, the Beer Institute’s advertising guidelines contained no exception for humor.

Section 2(d) of the Beer Institute’s Advertising and Marketing Code Guidelines states: “Beer advertising and marketing materials should not portray or imply illegal activity of any kind.” The “principles” underlying the guidelines state that “Beer advertising should not suggest directly or indirectly (emphasis added) that any of the laws applicable to the sale and consumption of beer should not be complied with,” and that “Brewers are responsible corporate citizens sensitive to problems of the society in which they exist, and their advertising should reflect that fact.”

This exchange presents another example of the ineffectiveness of industry self-regulation. The Beer Institute took no action beyond forwarding the complaint to A-B, hardly an impartial arbiter of a potential code violation.

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Industry Watch



NASCAR Opens Door to Liquor Sponsors

For information related to Industry Watch, please send us an email.

Related Links:

NASCAR website

CSPI Statement

The National Association of Stock Car Auto Racing (NASCAR), America’s most popular race-sanctioning body, recently announced that it will break a 30-year tradition and allow liquor company sponsorships for its teams next season. NASCAR’s about-face came under intense pressure from the liquor industry and its companies, notably Diageo. The decision raises the recurring issues of drunk driving, underage marketing, “equivalency,” and network television’s decades old ban on liquor advertising. It also signals a relatively sudden reversal in NASCAR policy.

As recently as June, the league turned down Diageo’s Crown Royal sponsorship of the Roush Racing team. NASCAR spokesperson Jim Hunter said at the time, "We've always felt like it would be detrimental to the sport."

Less than 6 months later, NASCAR gave liquor companies the green flag, requiring that 20 percent of the racing themed advertising be “responsible drinking” messages.

In recent years, racing has become increasingly popular with youth, especially with its increased television exposure (contracts with NBC and Fox). According to NASCAR, 12 percent of its television audience is underage.  Notably, the company has been aggressively recruiting a younger demographic, highlighting its younger drivers, offering online merchandise for infants and teenagers, and teaming up with Disney to produce the youth-oriented animated film, “Herbie: Fully Loaded,” due mid-2005. Later next year, Disney and Pixar will also release the NASCAR-themed adolescent animated movie, “Cars.”

Less than a month after NASCAR lifted its ban, three racing teams have inked sponsorship deals with liquor companies.  Nextel Cup series champion Kurt Busch and Roush Racing’s #97 Sharpie/Irwin car both signed with Diageo’s Crown Royal. Richard Childress Racing’s No. 7 car, driven by Dave Blaney, recently completed a sponsorship deal with Brown Forman’s Jack Daniels.


Several organizations, including CADCA, the AMA, and CSPI, have called on NASCAR to reverse its decision on liquor sponsorships.  Further actions are planned.

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Booze Lobby Cashes in on Tax-Break Bill

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On Friday, October 22, 2004, the President signed into law the “American Jobs Creation Act” of 2004 (Public Law 108-357), which contains $145 billion in business tax breaks – the fourth major tax act in as many years.

The law incorporates House language that provides for a three-year suspension of the Special Occupational Tax (SOT) on producers and marketers of alcoholic beverages, beginning July 1, 2005. Under the 140 year-old SOT law, liquor and beer retailers pay a tax of $250 per store. Wholesalers are assessed a tax of $500, while producers (breweries, wineries, and distilleries) are charged $1,000. Convenience stores and wineries have pushed aggressively over the past decade for repeal of the levy.

Although CSPI and other organizations opposed elimination of the SOT, the three-year suspension amounts to "only" $245 million (over three years) out of the $140 billion corporate tax break bill – and a fraction of annual revenues from federal excise taxes on alcoholic beverages (estimated at some $7.4 billion in 2003).


Internet Sales Showdown at the Supreme Court

Related Links:

All briefs, dockets, and legal
history at FindLaw

(Go to "December 7, 2004")

Join Together

Wine and Spirits Wholesalers of America


In early December, lawyers for small wineries (and their associations) faced off against attorneys for Michigan and New York (as well as wine and spirits wholesalers and others) in a case that may decide whether wineries – and possibly other alcohol producers – can deliver alcoholic-beverage products directly to consumers around the country. Currently, twenty-four states allow some form of interstate shipping, and approximately thirty permit in-state direct shipping. The case pits the Commerce Clause of Article III of the U.S. Constitution (which grants Congress broad powers over interstate commerce) against the 21st Amendment to the Constitution (which repealed Prohibition and granted states the power to regulate the sale and distribution of alcoholic beverages).

This case will determine whether alcohol producers can use the new marketing power of the internet to bypass the traditional three-tier distribution system. Wine and spirits wholesalers have led the opposition, fearing the potential loss of business. Those interests have enlisted the support of some 32 state attorneys general who joined an Ohio amicus brief opposing the proposed liberalization. Generally, those state governments, together with a few non-profit groups, argued that internet sales will make it easier for underage persons to acquire alcoholic beverages, and that states risk losing a portion of tax revenues that are much more easily collected from in-state wine distributors.


News reports of the Supreme Court argument suggest that the justices had little sympathy for the state arguments in defense of the three-tier system. The Court is expected to rule sometime in the spring or summer of 2005. Once that decision is out, we will be better able to assess the impact on future regulation of alcohol sales and the prospects for increased availability of large quantities of alcoholic beverages to underage persons.

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Contact Information:

For more information, please send us an email.

Center for Science in the Public Interest
Alcohol Policies Project
1220 L St. NW, Suite 300
Washington, DC  20009
Phone: (202) 332-9110
Fax: (202) 265-4954

We hope that the holidays find you in good health. All best wishes for the New Year.


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