USA: Diageo challenges California beer tax change

Diageo-Guinness USA, a division of Diageo, said it and the Flavored Malt Beverage Coalition have filed suit against California's Board of Equalization (BOE) challenging regulations that will reclassify flavored beer as a distilled spirit, increasing the taxes on the products by more than 1,600 percent, Thomson Financial News reported June 17.

Diageo said the the BOE does not have the authority to classify alcohol beverages for taxation purposes, adding that malt-based flavored beer is not a distilled spirit and has been taxed as beer for decades.

'The power to reclassify lies solely with the Department of Alcohol Beverage Control,' said Kellye Walker, General Counsel, Diageo North America. 'The BOE has completely overstepped its jurisdiction.'

17 June, 2008