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State's higher taxes on 'alcopops' are fizzling out

By: Evan Halper Under a new state law, beverages such as Smirnoff Ice are supposed to be taxed as liquor. But manufacturers say they've changed their recipes to continue fitting into the lower-taxed beer category. Beverage makers admit they aren't paying the new taxes. They say they don't have to because they have reformulated the drinks -- more than 6,000 varieties -- to transform them into simple beers by limiting the amount of distilled spirits they contain. They won't explain how. The formulas, they say, are trade secrets. And beverage-industry officials and federal regulators say there are no tests to determine how much distilled spirits the drinks contain. To continue reading this interesting article from Los Angeles Times, click here.

Full post as published by The Trade Secrets Vault on March 16, 2009 (boomark / email).