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O'Malley delays 'alcopops' measure

The Baltimore Sun

Gov. Martin O'Malley's chief lobbyist broke the news to public health advocates and anti-teen drinking crusaders Wednesday afternoon: The governor would sign a bill the next day ensuring that "alcopops" would continue to be taxed and distributed the same way as beer.

The advocates, who had spent the past three months arguing that the bill would make it easier for teens to get fruity drinks such as Mike's Hard Lemonade, sprang into action. Within hours, the national leader of Mothers Against Drunk Driving was on a plane from Dallas for a meeting with the governor, activists and two Marylanders whose children were killed by drunken drivers.

By the time the governor emerged, he "had a lot to think about," he said, and he decided to shelve the bill. O'Malley said yesterday that he wanted to consider the extent to which the drinks are "gateway" alcoholic beverages for teenagers, a contention the manufacturers deny.

"I want a little more time to think about it," O'Malley said after signing more than 100 bills yesterday, including many dealing with environmental and energy-related reforms. He said he would weigh the regulatory question along with the public health implications of the new law.

Lawmakers are usually eager to enact legislation to cut down on teen drinking, but the alcopops bill was a top priority this year for Maryland's liquor lobby, one of the most influential interest groups in the state. O'Malley has collected more than $230,000 in campaign contributions from liquor interests over the past decade, by far the most of any Maryland politician.

The law, which would effectively maintain the drinks' long-standing status in Maryland, passed by wide margins in both legislative chambers. It was controversial because activists believe the beverages are marketed to underage drinkers and that the broader distribution and lower taxes they have traditionally enjoyed in Maryland make them more available to teenagers.

But supporters of the bill say vetoing it would amount to a de facto tax increase, since Attorney General Douglas F. Gansler recently ruled that the drinks are effectively the same as liquor, which is taxed at a higher rate than beer. They have also said there's no evidence the beverages are marketed to minors.

The legislation was approved in the final few minutes of this year's legislative session, despite an outcry from lawmakers who sought to debate, amend and kill the bill. It passed 96-40 in the House and 36-10 in the Senate.

Gansler said the bill's success was a testament to the power of the liquor lobby in Annapolis. He cited a Sun analysis of campaign donations that showed alcohol interests have given about $2.8 million since 1998, an average of nearly $350,000 annually to hundreds of candidates.

Manufacturers of the drinks, which include some of the nation's biggest brewers, contributed $33,700 to Maryland political candidates over the past decade. The Maryland Beer Wholesalers Association contributed an additional $53,000.

"There is no gray area here," Gansler said, calling on O'Malley to veto the bill. "The alcohol industry itself will say they're targeting entry-level drinkers with these drinks. ... This is what kids are drinking. This is what kids can buy."

Lobbyists and representatives of alcohol manufacturers say the drinks are being unfairly targeted. They say most studies that have found the drinks to be popular among teenage girls also found generic beer to be equally popular among kids in the same age groups.

They also note that in a 2003 investigation, the Federal Trade Commission found "no evidence of intent to target minors" with the drinks, according to a letter the agency sent federal lawmakers.

Gary Galanis, a spokesman for Diageo North America, the U.S. subsidiary of the company that makes Smirnoff Ice and other "flavored malt beverages," said the debate had nothing to do with teen drinking.

"This is about maintaining the status quo of flavored beer the way it has been for the past 40 years in Maryland," he said.

If the bill is vetoed, he said, the drinks will be taxed at $1.50 a gallon, the same rate as spirits, instead of the 9 cents a gallon of beer. That would be "a 1,600 percent tax increase. We really hope the governor signs off on this, and many consumers would like to see him sign it as well."

Senate President Thomas V. Mike Miller said he wants O'Malley to sign the legislation and doesn't think the drinks are marketed to teens. House Speaker Michael E. Busch also voted for the bill.

Yesterday's meeting capped a furious push in the past week by a host of advocates to get O'Malley to veto the law. In addition to Charles Hurley, the CEO of MADD, O'Malley met with the executive director of the American Public Health Association, the Maryland Association of County Health Officials, representatives of Advocates for Highway and Auto Safety and the Maryland Emergency Nurses Association.

The group also brought samples of the drinks, including one peach-flavored sample of "Twisted Tea," which they asserted would be hard for any police officer to know was an alcoholic drink.

Hurley said he and others were "very pleased" O'Malley put off signing the bill, although the governor did express trepidation about a veto, they said, since it would effectively raise taxes on alcoholic drinks, something that hasn't occurred in Maryland since 1955 for liquor and 1972 for beer and wine.

O'Malley initially urged the activists to consider the possibility that he sign the bill and revisit the issue next year, according to participants in the meeting. Advocates said they strongly opposed that idea, arguing that it would be too difficult to create a specific category for the drinks once they were codified as beer in the law.

"It was a very good meeting," Hurley said, noting that O'Malley was engaged and listened intently on the discussions. "He's got teenagers himself, and the issue of underaged drinking is serious business. We're raising our kids in a corrosive atmosphere, and alcopops would add fuel to that fire."

bradley.olson@baltsun.com

Sun reporter Laura Smitherman contributed to this article.

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