malt beverage market. Sold under many brand names, products include alcoholic lemonades, colas, and coolers.
In recent years, brewers have partnered with producers of distilled spirits to label the flavored malt beverages with the brand names of well-known distilled spirits. Unlike traditional malt beverages, the alcohol content of flavored malt beverages is derived from the distilled spirits components of the added flavors rather than the fermentation of the malt.
BATF is proposing that to be classified and taxed as a “beer,” a product must contain less than 0.5% alcohol by volume derived from added materials, including flavorings, which contain distilled spirits. Those above 0.5% will be considered distilled spirits and be subject to distilled spirits regulations covering production, taxation, labeling, advertising, and distribution.
Current labeling and packaging of flavored malt beverages is confusing to consumers, said the bureau. It is proposing that flavored malt beverages be required to display the alcohol content on the brand label rather than the back label. In the future, the bureau will consider mandatory alcohol-content labeling for all malt beverages.