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provided by alcohol producers and wholesalers as an offset to income they receive as a result of underage drinking. By contributing to the foundation, they would have an opportunity to acknowledge, without defensiveness, that marketing of alcohol to young adults contributes, however unintentionally, to the web of social influences promoting underage drinking. The foundation also would provide an opportunity for all member organizations to declare and implement a genuine and unequivocal commitment to try to curtail alcohol use by underage youths and to conduct impartial evaluation of the effectiveness of interventions undertaken.

As the committee envisions it, many, if not all, of the existing industry activities in the domain of underage drinking would be redirected to the new foundation. The committee is no position to write the charter for this entity, which will have to be negotiated among all the organizational participants. However, it is clear that the charter would have to ensure that the foundation’s ability to operate is not hampered by the dominance of any single interest group or by the perception that it serves the commercial interests of its funders. A possible funding formula among all the participating industry partners could be developed along the following lines: Each alcohol producer, acting individually or through trade associations or other entities, would help to fund the activities of the foundation in a manner that is commensurate with the amount and proportion of industry revenues attributable to underage consumption. As indicated in Chapter 2, underage drinkers consumed between 10 and 20 percent of all alcohol consumed in 2000, representing about $11 to 22 billion, although the proportion differs substantially among beer, wine, and spirits. A reasonable target for the annual industry contribution to the foundation would be 0.5 percent of gross revenues (about $250-500 million) prorated according to the particular company’s share of the underage market (estimated based on surveys about underage brand use, or, in the absence of such data, based on the particular company’s share of the overall beer, wine, or spirits market).5

Until the proposed foundation has been established, the committee believes that the alcohol industry should take two immediate steps to redirect the resources and activities currently devoted to preventing underage drinking and to move toward the strategy recommended by the committee.


A bill developed by the California Alcohol Policy Reform Initiative and pending before the California Assembly, would impose a “fee” on alcohol producers based on the producers’ respective shares of the underage market. Under the bill, the California Department of Alcohol and Drug Programs would conduct an annual survey of youth drinking to determine brand preferences. Up to $100 million would be collected annually and distributed to the counties for youth prevention and treatment programs. The committee’s proposal urges alcohol producers, advocacy groups, and other interested parties to reach agreement on such an approach in lieu of a governmental solution.

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