Apple

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Apple
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Developing Brand Loyalty at an Early Age

• Diageo rolled out Smirnoff Ice in the US
  market...it suddenly put the once-stodgy Smirnoff
  name on the tips of millions of echo boomers
  tongues (Impact, May 15, 2003)
• Echo Boomers
• Americans born from 1977-1994
• currently 12 29 years old

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Tax and Trade Bureau Description of Flavored
Malt Beverages (Alcopops)

• Flavored malt beverages exhibit little or no
  traditional beer or malt beverage character.
  Brewers remove the color, bitterness, and taste
  that are generally associated with beer. This
  leaves a base product to which brewers add
  various flavors, which typically contain
  distilled spirits, to achieve the desired taste
  profile.

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Why Distilled Spirits Are Added to Alcopops

• According to the Flavored Malt Beverage
  Coalition
• Flavoring ingredients that are added to a malt
  beverage base to produce an FMB need to be
  stronger because of the pronounced organoleptic
  sensory qualities of the base itself.
• Fact Sheet, February 2003

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Production Schemes to Gain Regulatory Advantage

• Smirnoff Ice has a different formulation in the
  United States than in other countries where it is
  identified as a spirits-based beverage.
• Hooch has a malt base in the United States, a
  spirit base in the United Kingdom and a fruit
  wine base in Germany.

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The beauty of this category is that it brings in
new drinkers, people who really dont like the
taste of beer, said Marlene Coulis, A-Bs
director of new products. (Advertising Age,
April 22, 2002)
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• No.
• IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
• FIRST APPELLATE DISTRICT, DIVISION _____
• JOAN KILEY, COUNTY OF ALAMEDA, et al.
• Petitioners
• vs.
• CALIFORNIA DEPARTMENT OF ALCOHOLIC BEVERAGE
  CONTROL
• Respondent.
• PETITION FOR WRIT OF MANDATE, CERTIORARI, AND/OR
  OTHER APPROPRIATE RELIEF
• LOUISE H. RENNE, State Bar 36508
• RENNE SLOAN HOLTZMAN AND SAKAI LLP
• Public Law Group

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CA Business Professions Code 23004

• Alcoholic beverage includes every liquid or
  solid containing alcohol, spirits, wine, or beer
  which is fit for beverage purposes either alone
  or when diluted, mixed, or combined with other
  substances.

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Purpose of the ABC Act

• The Acts purpose is to protect the safety,
  welfare, health, peace, and morals of the people
  of the State. It is hereby declared that the
  subject matter of this division involves in the
  highest degree the economic, social, and moral
  well-being and the safety of the State and of all
  its people. All provisions of this division shall
  be liberally construed for the accomplishment of
  these purposes.
• Business Professions Code 23001

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Purpose of the ABC Act (Cont.)
California law seeks to promote the welfare
which will be achieved by strict regulation and
curtailment of the use of liquor and the economic
benefits resulting to the people from the
promotion of tolerance, rather than those
resulting from the promotion of the liquor
industry. (Pronto Market No. 1 Inc. v.
Alcoholic Beverage Control Appeals Bd. (1976) 61
Cal.App.3d 543, 556 emphasis added.)
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Federal Regulatory Criteria

• The Tax and Trade Bureau based its decision
  primarily on the potential economic and
  regulatory burdens placed on the alcohol
  industry.
• The TTB is persuaded that strict limits on the
  distilled spirits content in alcopops might
  impose economic burdens on a sector of the FMB
  industry .
• TTB, Flavored Malt Beverage And Related
  Regulatory Amendments, January 3, 2005, 70 FR
  194, 209.

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