Bill will boost small businesses, support consumer choice & generate tax revenue
The Distilled Spirits Council of the United States (DISCUS) welcomes the introduction of SB 277 – a commonsense measure that will help California’s laws meet consumer demand by providing fairer treatment for spirits-based ready-to-drink (RTD) cocktails in the marketplace.
“The ready-to-drink market is booming, and with new innovation comes new opportunities to look at and update our laws,” said Adam Smith, vice president of government relations at DISCUS. “Senator Dodd’s bill helps keep California at the forefront of the modern marketplace and meets the growing consumer demand for spirits RTD products. Spirits RTDs often contain the same or lower amounts of alcohol than beer- and wine-based beverages, so there is no reason to treat them differently by requiring a prohibitively expensive license to carry them. Consumers are clear: they want greater access to these incredibly popular beverages, and SB 277 helps achieve that.”
Despite many of these spirits-based products having the same or lower alcohol-by-volume (ABV) than their beer- and wine-based counterparts, grocery and convenience stores need a unique and expensive license in order to carry spirits RTDs. As a result, in California, beer- and wine-based RTDs are sold in more than 28,000 locations. Meanwhile, spirits RTDs with the same or lower amounts of alcohol are only sold in about 14,000 locations. The proposed bill helps correct this disparity by allowing spirits RTDs to be sold under the same license used for beer and wine, uplifting thousands of local businesses.
The distilled spirits industry is a significant driver of economic activity in California, contributing to the vibrancy of the manufacturing, hospitality, tourism and agriculture industries. There are currently 143,000 jobs in the state supported by the spirits industry, generating more than $16.67 billion in state economic activity each year. Greater access to spirits RTDs will allow the industry to contribute even more. It could also generate as much as $60 million in additional excise tax revenue for the state, because increased access will result in more sales, generating more tax revenue and more economic activity.
Providing equal access to spirits RTDs will also help protect consumer choice and increase convenience in California. A recent survey found that consumers want greater access to these products, including at grocery and convenience stores, with 86 percent agreeing that spirits RTDs should be sold where beer and wine are available for purchase.
California is one of many states taking a closer look at this issue to ensure that producers of spirits-based RTDs are being treated fairly, recognizing that treating beverages differently based on the myth that some alcohol is “softer” than others sends a dangerous message to consumers.