More Reaction to TTB’s Proposed Ruling

It ain’t over until the fat lady sings….. and a 90 day comment period

“These proposals mark a change in U.S. policy under which flavored malt beverages have been produced, marketed and sold for the past 30 years,” said Smirnoff Ice maker Diageo in a statement Friday. Diageo was not happy with this ruling and neither were other FMB marketers. Greg Altschuh, director of the FMB Coalition, which represents eight FMB makers including Diageo and Mikes, said his members were disappointed with the ruling but that they would utilize the 90 day comment period to voice their concerns.

Anat Baron of Mike’s told Beer Business Daily that they are “confident that once they’ve received input from all parties concerned, they’ll adopt a ruling that’ll be more favorable to companies like mike’s hard lemonade. We’ll continue to work with the Flavored Malt Beverage Coalition and appropriate government agencies to ensure fair treatment of the Flavored Malt Beverage Industry. It’s important to remember that a final ruling is not likely until 2004.”

She wants distributors to be assured that the proposed TTB ruling would not stop mike’s growth. “We continue to see tremendous upside for mike’s hard lemonade, mike’s hard cranberry lemonade and mike’s hard iced tea. We do not see the TTB’s Notice No. 4 as having any impact on our growth in 2003 and beyond.”

IT AIN’T OVER UNTIL THE FAT LADY SINGS. Three malternative producers have made it clear to Beer Business Daily that they will vigorously push for a 51% flavorings ruling during the 90 day comment period. The basis for their argument can be found in the TTB memo: “We believe that IRC § 5052 also would support the issuance of a regulation requiring that a beer or malt beverage product must directly derive a majority of the alcohol in a product taxed as beer from fermentation. In other words, less than 50% of the alcohol in a beer or malt beverage could come from alcohol added through flavoring or other materials.”

Beer Business Daily has been told by two industry observers that even the White House was somehow involved in Treasury’s decision. It appears the smoky back rooms are being utilized by both sides in an effort to resolve this issue so the state ABCs can get to the business of aligning their own regs.

TABC’S YARBROUGH SUPPORTS 90% STANDARD. In a note to Beer Business Daily, former Texas ABC director Randy Yarbrough said, “Dr. Ehart and I recommended early on that the standard be a minimum of 51% although I have always supported the stronger standard and have communicated that to ATF at various times over the period of evaluation.” Randy said that several other state ABC directors would also like to see a clear cut distinction between malt and distilled spirit drinks. Send your comments to hs@beernet.com

NBWA/BREWERS LEG CONFERENCE POSTPONED DUE TO WAR. “After discussions with NBWA leadership, suppliers and wholesalers from across the country, we have decided to postpone the NBWA/BREWERS Joint Legislative Conference until May/June of this year,” wrote NBWA’s David Rehr in a statement on Friday. “We do this out of respect for our fighting men and women overseas…Additionally, advocating for a set of specific issues on Capitol Hill at this time may not show the appropriate respect for issues larger than ours.” Don’t forget to cancel your hotel and flight.