Youngkin signs bipartisan bill targeting crossover alcoholic beverages

It aims to keep traditional soft drinks separate from new alcohol-containing beverages on store shelves.
Cases of Hard Mtn Dew are displayed next to Dr Pepper and chips in a store display in Roanoke, Va., on Feb. 3, 2023. (Photo Courtesy Virginia Beer Wholesalers Association)

Virginia Gov. Glenn Youngkin (R) signed a law to keep traditional soft drinks separate from new alcohol-containing crossover beverages on store shelves.

The new restrictions were prompted by disruption in the alcoholic beverage market, as brands including CokePepsi and, recently, SunnyD roll out products containing alcohol.

In some cases, the new boozy beverages, such as Hard Mtn Dew, have been placed next to their traditional non-alcoholic counterparts on store shelves, triggering concerns about consumer confusion and competitive advantage.

“I am delighted that Governor Youngkin signed this bi-partisan consumer protection bill,” Sen. Barbara Favola (D), who sponsored the Senate bill, said in an email to Pluribus News. 

“Requiring separation on retail shelves between drinks that contain alcohol and same brand drinks that do not contain alcohol, along with clearly marked labels, helps everyone,” she added.

Under the law signed Wednesday, distributors will have to ensure that alcoholic and non-alcoholic products that share similar names, logos or packaging don’t sit immediately adjacent to each other in stores. The law also requires that in-store displays of these new drinks are accompanied by clear signage alerting shoppers that they contain alcohol.

“This policy makes it easier for consumers to understand the product they are purchasing and it serves as a double protection against under-aged youth purchasing alcoholic beverages,” Favola said in the email.

Favola’s bill was passed virtually unanimously and did not draw visible opposition during Virginia’s legislative session. A companion measure in the House also sailed through.

The measures were backed by Anheuser-Busch, Molson Coors and the Virginia Beer Wholesalers Association. The industry has viewed soft drinks’ swerve into the alcohol lane with wariness.

In Virginia and Nevada, beer wholesalers have complained to state alcohol regulators about the distribution model for Hard Mtn Dew, which does an end run around them. Blue Cloud Distribution, a PepsiCo subsidiary, distributes Hard Mtn Dew.

Wholesalers have also raised concerns that the new alcohol-based beverages could be catching a free ride on the slotting fees paid to secure premium shelf space for non-alcoholic soft drinks. Slotting fees and other inducements are strictly forbidden for products containing alcohol.

Blue Cloud told Pluribus News last fall that it follows all government regulations and gives “specific guidance that alcoholic and non-alcoholic beverages should not be merchandised or advertised together.”

The Virginia law is likely the first to respond to the burgeoning crossover beverage market, but the idea is already catching on.

A similar measure is advancing in Illinois. It would prohibit side-by-side placement of so-called “alcopop” products with regular soft drinks, fruit juices, bottled water, candy or child-themed snack foods.

The bill would also explicitly forbid slotting fees for non-alcoholic beverages if those fees “are a subterfuge for providing something of value for the sale of alcoholic liquor,” according to a February summary of the bill.