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On Monday Governor Jerry Brown signed Senate Bill 39 banning the production, importation, and sale of beer to which caffeine as a separate ingredient has been directly added. Senator Alex Padilla, a Democrat from the San Fernando Valley, introduced the Bill last December. In order to enforce the prohibition, licensees may be required by the California Department of Alcoholic Beverage Control to provide product formulas. All formulas provided will be considered confidential trade secrets and not subject to disclosure under the California Public Records Act. The new law can be found in Section 25622 of California’s Business and Professions Code. The law does not prohibit beers where caffeine is a part of the brewing process itself, such as a coffee porter. It is aimed instead at the Progressive Adult Beverages (PABs) (also commonly referred to as Ready to Drinks (RTDs) and Flavored Alcoholic Beverages (FABs)) that have been in the news since last fall. See our prior coverage here, here, here, and here. This puts California in line with states like New York, Massachusetts, Washington, Michigan, Kansas, and Utah, which have also banned such beverages.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·

At this point, we’ve all recovered from the landslide ban on alcoholic energy drinks that crossed the U.S. in November.  We covered the opening act, here, when Michigan, quickly followed by Washington, banned the sale of alcoholic energy drinks.  New York then reached an agreement with certain suppliers and distributors that halted caffeinated malt beverage sales in that state (review our coverage here).  After that, the U.S. Food and Drug Administration (FDA) issued warning letters to four caffeinated alcoholic beverage companies.  The letters warned those producers that caffeine added to their malt alcohol beverage products constitutes an “unsafe food additive.” 

Substances added to food products, which includes beverages, are considered food additives and are subject to review and approval by the FDA, unless the substance is specifically excluded from the definition of “food additive,” has been sanctioned by the FDA, or is recognized by qualified experts as adequately safe when used as intended.  This third category is referred to as Generally Recognized as Safe or GRAS. 

As many know, the FDA isn’t the usual stop for federal regulation of alcoholic beverages, but rather the Alcohol and Tobacco Tax and Trade Bureau (TTB) which operates under the Federal Alcohol Administration Act (FAA Act).  In this instance, the FDA’s statements meant that the beverages in question were considered adulterated under the Federal Food, Drug and Cosmetic Act (FFDCA).  The TTB takes the position that adulterated beverages, even if their formulas and labels have been approved by the TTB, are mislabeled under the FAA Act.  This means that shipping and selling such beverages violates the FAA Act, which can result in license revocations and misdemeanor penalties.  As the TTB stated, “…each producer and importer of alcohol beverages is responsible for ensuring that the ingredients in its products comply with the laws and regulations that FDA administers.  TTB’s approval of a label or formula does not imply or otherwise constitute a determination that the product complies with the FFDCA, including a determination as to whether the product is adulterated because it contains an unapproved food additive.” 

Producers of alcoholic energy drinks likely thought their products fell under the GRAS status.  The FDA’s announcement ended that assumption.  The question is, what other assumptions might it have ended?  Alcoholic beverage producers have been using caffeine in their products for years, the most popular being coffee.  In the FDA’s Questions and Answers section about the warning letters, it states that the letters are not directed at “alcoholic beverages that only contain caffeine as a natural constituent of one or more of their ingredients, such as a coffee flavoring.”  However, in that same section the FDA also stated that, “Other alcoholic beverages containing added caffeine may be subject to agency action in the future if the available scientific data and information indicate that the use of caffeine in those products is not GRAS.  A manufacturer is responsible for ensuring that its products, including the ingredients of its products, are safe for their intended use and are otherwise in compliance with the law.”  Further, the TTB stated that if requested by the FDA, it would share “formulas for beers containing added caffeine that are approved under 27 CFR Part 25 [TTB regulations].”  In the upcoming months, and perhaps years, it will be interesting to see how the GRAS standard is applied to other alcoholic beverages containing some form of caffeine.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010 · All Rights Reserved ·

New York is the latest state to jump on the alcoholic energy drinks ban-wagon.  On Sunday, November 14, 2010, New York Governor David Paterson and Chairman of the State Liquor Authority Dennis Rosen announced a voluntary agreement with Phusion Products, the makers of Four Loko, to stop shipment of caffeinated alcoholic beverages to New York by Friday, November 19, 2010.  Additionally, the largest beer distributors in New York State agreed to stop selling malt beverages containing caffeine and other stimulants.  Those distributors have until December 10, 2010 to sell off the remainder of their in-state inventory.  The voluntary agreement effectively bans the products from New York State.  In addition, Phusion Products agreed to fund educational alcohol awareness programs concerning binge drinking.  The agreement comes after NYPD sting operations revealed sales of Four Loko products to minors by numerous stores in the Bronx area.

On Tuesday, November 16, 2010, New York Senator Charles Schumer went further, indicating that the Food and Drug Administration was expected to release findings that caffeine is an unsafe food additive for alcoholic drinks.  Were such findings made, the Federal Trade Commission would send letters to manufacturers of such beverages warning that marketing such products could be illegal.  The FDA spokeswoman Siobhan DeLancey did not confirm whether or not such findings were expected or when any findings on the matter would be released. 

Precluding the need for any such findings, however, Phusion Products announced that same day, via their website, that it would remove caffeine, guarana and taurine from Four Loko.  Phusion Products maintains that their products as originally formulated were safe; however, the company felt changes were necessary due to the current regulatory environment.  Phusion Products isn’t the first company to remove ingredients from an alcoholic energy drink in response to regulatory pressure.  In 2008, MillerCoors announced it would remove caffeine, guarana, ginseng, and taurine from its Sparks beverages after voluntary negotiations with various state attorney generals.  Anheuser-Busch InBev underwent a similar reformulation process with its Tilt beverages in 2008.

Imbiblog is published for general informational purposes only and is not intended as legal advice.

In the span of a week, both Michigan and Washington have banned alcoholic energy drinks.  On November 4, 2010, the Michigan Liquor Control Commission issued an Administrative Order rescinding its approval of all alcoholic energy drinks, effectively banning them in the state of Michigan.  Manufacturers have 30 days from the date of the Order to remove their products from Michigan stores.  The ban covers a total of 55 drinks offered by nine different suppliers.  According to supporters of the ban, the high alcohol content—around 12% for a 24-ounce can, compared to 4-5% for a 12-ounce beer—combined with flashy packaging, flavors such as grape and watermelon, low prices (around $2 to $5), and the combination of stimulants such as caffeine, taurine, and guarana, along with alcohol, make the drinks dangerous to teenagers and college-aged students.   As the Commission’s news release stated, “The Commission believes the packaging is often misleading, and the products themselves can pose problems by directly appealing to a younger customer, encouraging excessive consumption, while mixing alcohol with various other chemical and herbal stimulants.”

On November 10, 2010, at the request of Governor Chris Gregoire, the Washington State Liquor Control Board approved an emergency rule banning the sale of alcoholic energy drinks.  The emergency ban will remain in effect for 120 days, during which time the Liquor Control Board will work to make the ban permanent.  The Washington ban was partially spurred by nine Central Washington University students who became ill after consuming alcoholic energy drinks.  As Gov. Gregoire stated in the Liquor Control Board’s press release, “By taking these drinks off the shelves we are saying ‘no’ to irresponsible drinking and taking steps to prevent incidents like the one that made these college students so ill.”

Michigan and Washington are not the only states with some form of limitation on alcoholic energy drinks.  Both Utah and Montana reclassified such beverages as liquor, thus restricting the locations where such items can be sold.  In 2009, the U.S. Food and Drug Administration announced it would look into the health risks associated with caffeinated alcoholic beverages.  The FDA has never approved caffeine as an additive to alcoholic beverages, although it has approved it as an additive to soft drinks.  Beverages without FDA approval can still be lawfully marketed, but their use must be subject to a prior sanction or deemed Generally Recognized As Safe, or GRAS.  Given the extensive media coverage surrounding beverages containing caffeine and alcohol, it appears likely that these products will continue to attract regulatory attention.

Imbiblog is published for general informational purposes only and is not intended as legal advice.