LINCOLN, Neb. (Legal Newsline) - The Nebraska Supreme Court has decided that flavored malt beverages should not be classified as beer.
In an opinion released Friday, the court decided that flavored malt beverages are actually spirits because up to 49 percent of the alcohol in them is distilled. Three nonprofits hoping to prevent underage drinking and a Nebraska woman had challenged the state Liquor Control Commission's finding that malt beverages were beer.
Justice William Connolly wrote that the issue was significant because beer is taxed at 31 cents per gallon and spirits are taxed at $3.75 per gallon. He said the commission's regulations exceeded its authority.
"(W)e reject the Commission's argument that these beverages can be classified as beer because they also contain fermented alcohol," Connolly wrote.
"Even if distilled spirits are only indirectly added to the beverages through 'flavorings' during production, the act does not define beer to include beverages that contain distilled alcohol."
Connolly wrote that the Nebraska Liquor Control Act defines spirits as beverages that contain alcohol obtained by distillation, and that the commission's argument that it should be allowed to interpret the statute was incorrect.
He also wrote that the act defines beer as "a beverage obtained by alcoholic fermentation of an infusion or concoction of barley or other grain, malt and hopes in water and includes, but is not limited to, beer, ale, stout, lager beer, porter and near beer."
Connolly concluded, "Even though this list of beer products is not exclusive, a beverage containing alcohol obtained through fermentation - not distillation - is obviously the definitive criteria for beer under the act."
Federal regulations allow products that contain both fermented alcohol and distilled alcohol to be classified as malt beverages. A trial court rejected the commission's argument that the state law's definition of beer could include the federal regulatory definition of flavored malt beverages.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.