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F I S C A L I M P A C T R E P O R T

SPONSOR Tsosie

DATE TYPED 2/25/2005 HB

SHORT TITLE Regulation of Alcoholic Look-A-Like Products

SB 1025

ANALYST Dunbar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Children Youth and Families Department (CYFD)

Department of Health (DOH)

SUMMARY

Synopsis of Bill

Senate Bill 1025 would limit the influence of alcohol look-a-like products on New Mexico’s

children by limiting the sale of these products. SB 1025 proposes to limit the sale of alcohol

look-a-like products to persons who are 18 years old and over. SB 1025 proposes that alcohol

look-a-like products not be sold within 300 feet of a primary or secondary school. This rule

would also apply to any food or drink that has a name substantially similar to that of any recog-

nized alcoholic beverage.

Significant Issues

DOH explains that excessive advertising has been demonstrated to increase consumption of al-

cohol by underage youth. In that alcohol marketing practices already target youth, the marketing

of products with similar appearance of alcohol products further glamorize underage alcohol con-

sumption.

Alcohol look-a-like products may include “alcopops”, which are soft drinks or lemonades that

contain alcohol. Alcopops are popular with younger people.

Senate Bill 1025 Page 2

TECHNICAL ISSUES

DOH suggests that SB1025 may be strengthened if it indicates the agency responsible for regula-

tion and/or specifies a penalty for violation.

OTHER SUBSTANTIVE ISSUES

DOH reports that according to the Alcohol Policies Project, marketers appeal to young people by

developing sweet tasting products (

www.cspinet.org/booze/alcohol_advertising_ex15.htm

).

Industry data also reflect the significant participation of underage users among consumers of

sweeter alcohol products or alcopops. Mintel International, as reported by Super Market Re-

search, estimates that "nearly one-quarter of people age 19 to 20 drink coolers including spirits-

based pre-mixed beverages, accounting for 7 percent of all cooler drinkers." This is not even tak-

ing into consideration 15- to 18-year-olds. Mintel’s calculation also fails to acknowledge that

underage drinkers probably consume more than their proportional share of the sweeter products.

It is estimated that teenagers consume around 10% of all the alcopops sold, if not more.

Also, according to the Alcohol Policies Project, alcohol marketers say they have voluntary stan-

dards that prevent them from targeting consumers younger than the legal purchase age. Market-

ers claim to avoid pitches that primarily appeal to teenagers and to pass up ad placements that

reach an audience that is predominantly underage. Yet, it is known, when one reaches 21, these

former teens become potentially valuable alcohol consumers and legitimate targets for aggres-

sive promotions. Those messages weave throughout the media and in many marketing arenas;

they mirror youth culture and relate directly to the interests, motivations, and aspirations of

young.

After substantial declines in the 1980s and early 1990s, youth alcohol use has remained flat and

at high levels for the past ten years.

3

In 2003, approximately 10.9 million 12- to 20-year-olds re-

ported having had a drink in the past month. Of that number, nearly 7.2 million reported binge

drinking (defined as drinking five or more drinks on the same occasion).

4

These numbers are

essentially unchanged from 2002. Every day, three teens die from drinking and driving, and at

least six more die of other alcohol-related causes, including homicide, suicide and drowning (Al-

cohol Advertising on Television, 2001 to 2003: More of the Same Executive Summary, Center on

Alcohol Marketing to Youth.)

DOH reports that public health research has found that youth exposure to alcohol advertising in-

creases awareness of that advertising,

which in turn influences young people’s beliefs about

drinking, intentions to drink, and drinking behavior. Brain imaging has revealed that, when

shown alcoholic beverage advertisements, teens with alcohol use disorders have greater activity

in areas of the brain previously linked to reward, desire, positive affect and episodic recall, with

the degree of brain response highest in youths who consumed more drinks per month and re-

ported greater desires to drink. The Federal Trade Commission (FTC) has noted that, "While

many factors influence an underage person’s drinking decisions, including among other things

parents, peers, and the media, there is reason to believe that advertising plays a role." (Alcohol

Advertising on Television, 2001 to 2003: More of the Same Executive Summary, Center on Alco-

hol Marketing to Youth.)

The alcohol industry trade associations, as well as individual companies, should strengthen their

advertising codes to preclude placement of commercial messages in venues where a significant

proportion of the expected audience is underage, to prohibit the use of commercial messages that

Senate Bill 1025 Page 3

have substantial underage appeal, and to establish independent external review boards to investi-

gate complaints and enforce the codes (Recommendation 7-3, Reducing Underage Drinking,

137, Reducing Underage Drinking: A Collective Responsibility, 2004., a National Institute of

Medicine [IOM] report)

BD/yr