Wake Up Call.....

Alcohol Tax Hikes Prove Popular in New Poll

Source: CSPI

December 7

Seventy-one percent of Americans support a five cent per drink increase in federal alcohol taxes, according to new survey research commissioned by the nonprofit Center for Science in the Public Interest (CSPI). As lawmakers consider slashing popular social programs to bridge the federal budget gap, CSPI says they should instead consider raising taxes on beer, wine, and spirits — which could raise more than $20 billion in desperately needed revenue over the next five years.

When asked whether they prefer raising alcohol taxes or cutting social programs as a way of offsetting the budget deficit, a whopping 79 percent of respondents favor the alcohol tax increase. Even 68 percent of Republicans surveyed and 70 percent of drinkers would support raising alcohol taxes over cutting programs such as food stamps, Medicaid, and drug benefits for the elderly.

"Raising alcohol taxes alone may not balance the budget, but it would boost revenues in a way that's popular, fair, and provides real money, said George A. Hacker, director of CSPI's alcohol policies project. "In past decades, alcohol interests have too often beaten back any across-the-board increases in booze taxes. But with an expensive war being waged, and with painful cuts in popular social programs on the table, we can't let one politically powerful industry keep evading its fair share."

In recent decades, federal taxes on alcoholic beverages have effectively fallen dramatically due to inflation. That's because such taxes are typically assessed not as a percentage of the purchase price, but as a flat dollar amount. Those levies have been raised only once for beer and wine, and only twice for liquor in the past 55 years. Had the federal tax on beer merely kept pace with inflation, it would be more than triple what it is today. Liquor taxes would have increased sixfold.

Most Americans would be largely unaffected by increases in alcohol taxes. More than one-third don't drink at all, and most others drink only occasionally. Eighty percent of the alcohol consumed in America is downed by twenty percent of the drinkers. According to the Adams Beer Handbook, more than half of beer and liquor drinkers have incomes above $60,000 a year.

"Cutting social programs such as Medicaid, Medicare, and food stamps is an absolutely unconscionable way to cut the deficit so long as lawmakers are leaving billions in alcohol tax increases off the table," said Hacker. "Especially when one considers that the $18 billion in current state and federal alcohol tax collections barely cover a tenth of the $185-billion price tag of underage drinking, alcohol abuse, and drunk-driving. Congress last found the courage to raise alcohol taxes in the Reconciliation Act of 1990, and it should follow that precedent today."

Last May, 59 prominent economists, including four Nobel laureates, called on Congress to raise alcohol taxes to help offset the massive economic and social costs of alcohol. Henry Aaron, a senior fellow in economic studies at the Brookings Institution, said that lawmakers "would be well advised to increase a tax that would help close the federal deficit and discourage the continued epidemic of alcohol abuse."

In its 2005 budget options report for Congress, the Congressional Budget Office estimated that raising the tax on distilled spirits to $16 per proof gallon from the current rate of $13.50 and equalizing the rate of tax on the alcohol in beer and wine to that level would yield $27 billion in new revenue over the next five years. Numerous researchers have concluded that higher taxes would lead to slightly less drinking, and could cut the incidence of alcohol problems and their costs. A nickel-a-drink tax increase might save as much as $5 billion per year. Earmarking some of the revenues for alcohol treatment, prevention, and public education could further reduce the societal toll of alcohol problems, according to CSPI.

CSPI's survey was of a nationally representative sample of 512 American adults. The survey was conducted in mid-November via telephone by the Global Strategy Group polling firm. The margin of error is plus or minus 4.3 percent.

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Constellation says Vincor rejects bid

Wednesday December 7, 12:15 pm ET

NEW YORK (Reuters) - Constellation Brands Inc. (NYSE:STZ - News) on Wednesday said that Vincor International Inc. ( Toronto :VN.TO - News) rejected a sweetened, conditional offer of C$35 per share and that the companies have held no talks since the new bid was made.

Constellation, the wine, spirits and beer company which made an initial offer of C$31 per Vincor share in September, also reminded Vincor shareholders that its C$33.00 cash per share offer is set to expire on Thursday. Constellation said that Vincor's board "refused to engage in discussions about any aspect of Constellation's C$35 cash per share proposal."

On December 1, Vincor's board rejected Constellation's C$33.00 per share offer, calling the bid "inadequate." Vincor, the Toronto-area winemaker, said at that time that it would welcome a higher offer from Constellation. It called the C$33.00 per share bid opportunistic and said that bid did not fully recognize the value of the company.

"Overall, the offer is dead. The shareholders have spoken last week and this week that the $33 and $35 offer are both not acceptable." a Vincor spokeswoman said. "There has been no discussions with Constellation since last week when we indicated to them that we would be open to discussing if they put a fair and firm offer on the table. And the current offers are not considered fair or firm."

Vincor's shares fell 75 Canadian cents to C$33.50, Constellation shares were up 9 cents at $24.89.

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Massachusetts : Commonwealth joins Charmer Sunbelt Group

07 Dec 2005

Source: just-drinks

Drinks distributor Charmer Sunbelt Group has signed a partnership deal with the Massachusetts-based wine importer and distributor Commonwealth Wine & Spirits.

A letter of intent has been signed and the deal is expected to be completed in January, Charmer Sunbelt said.

"We are delighted to become associated with this excellent company and hope to add our expertise to that of Commonwealth to create an even greater company," said Charmer Sunbelt CEO, Charles Merinoff. "Over time we will grow the business of our current product lines and add wines and spirits that complement the current portfolio."

Commonwealth's president, Tom Coleman, will continue to head up the company, reporting to Merinoff.

Coleman said: "Joining with Charmer Sunbelt is a tremendous opportunity for all of us at Commonwealth, and we look forward to making this new partnership an unqualified success."

The Charmer Sunbelt Group is an alliance of affiliated, independent drinks distribution companies operating in 15 US states.

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Iron City beer maker files Chapter 11

Source: Pittsburgh Business Times

The Pittsburgh Brewing Co., the longtime maker of Iron City beer, filed for Chapter 11 bankruptcy protection Wednesday in U.S. Bankruptcy Court for the western district of Pennsylvania.

To date, only the initial papers have been filed with the court.

But the Lawrenville-based brewery faces charges by the Pittsburgh Water and Sewer Authority that it owes more than $2 million in unpaid water bills dating back a few years.

The filing in federal court in Pittsburgh shows Pittsburgh Brewing has estimated assets of less than $10 million and debts of less than $10 million.

In recent years, the company, owned by Joseph Piccirilli, has created plenty of brand cachet by restoring the company logos last used in the 1950s. Pittsburgh Brewing also raised attention when it converted to eye-catching aluminum bottles that were recognized for their design by national publications.

But Pittsburgh Brewing has also faced a competitive beer market in which it remains one of the very last regional brewers, an industry category marked by a production capacity of less than one million barrels annually.

While Iron City beer remains a local icon, as well as a fixture in the minds of beer drinkers throughout the region, Wednesday's Chapter 11 filing marks the second time the company has sought protection from creditors in the past 10 years.

The last time was in 1997, from which Pittsburgh Brewing exited in 2001.

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New York : Experts say wine-shipment law may be returned to sender

By MARK JOHNSON

Associated Press Writer

December 7, 2005, 1:02 PM EST

ALBANY , N.Y. -- New York winemakers might want to rethink their toasts to the interstate wine-shipment law signed last summer.

Legal experts now say the state law created five months ago after the nation's highest court struck down interstate wine-trade agreements is itself unconstitutional.

The law was created after a U.S. Supreme Court decision in May struck down laws in New York and Michigan as discriminatory because they allowed in-state wineries, but not out-of-state businesses, to ship directly to consumers. The decision ended a disputed distribution system that barred wineries in 24 states from shipping directly to out-of-state customers.

States either have to let all wineries sell directly to consumers or block all shipments in the heavily regulated wine trade.

In July, Gov. George Pataki signed a law authorizing the direct shipment of wines into and out of the state. The law includes a provision mandating that out-of-state wineries that apply for a license to ship into New York have to be located in states that give New York vintners similar shipping privileges.

Corbin Houchins, a wine-industry lawyer since 1971 and a former in-house counsel for E & J Gallo Winery in California , said the law is likely unconstitutional. That, he said, is because the U.S. Constitution prohibits states from passing laws that discriminate against out-of-state businesses _ an argument made by wineries to win the May Supreme Court ruling. The new law may be vulnerable to legal challenge because it excludes wineries in non-reciprocal states.

"It's interesting they would write a law assuring it would have to be changed again," said Houchins. "Most observers agree that the Commerce Clause knocks out reciprocal agreement laws."

The U.S. Constitution's Commerce Clause reserves for the federal government the right to regulate commerce among the states, as well as antitrust laws protecting free trade.

The clause was put into the Constitution to prevent the kind of trade wars seen between states under the Articles of Confederation, said Bernadette Meyler, an assistant law professor at Cornell University Law School.

"I think the ( New York ) law does violate the Constitution," she said. "And the spirit of the law contradicts many of the comments made in the Supreme Court ruling this spring. The court was trying to eliminate destructive trade wars occurring between states in the area of wine."

Houchins said he knew of no case challenging the reciprocal agreement laws.

Sen. George Winner, a sponsor of the bill, said it is "a great first step" helping the wine industry expand. He said he doesn't believe the law violates the Constitution.

"It's all a growing process," the Elmira Republican said. "I'm hopeful in the next few years, all states, especially those with wine industries, will all be on the same page."

New York so far has signed reciprocal shipping agreements with California , North Carolina , Oregon and Virginia . The Pataki administration expects to soon reach an agreement with Texas and eventually other states.

"The law signed by the governor establishes a level playing field to ensure equal access to wine markets," Pataki spokesman Saleem Cheeks said. "We're confident the law is constitutional."

The global wine-and-grape industry contributed $6 billion to the state economy last year, and homegrown vineyards were the biggest contributors, a California research firm said in a November report.

With 31,000 acres of vineyards, 212 wineries and 1,384 grape farms, New York is the nation's second-largest wine producer after California and the third-biggest grape grower behind California and Washington .

Jim Trezise, president of the New York Wine & Grape Foundation, said New York wineries can ship to about 35 states now. "Ninety percent of the states are moving toward freer trade," he said.

Houchins said increased demand from consumers, the growing number of wineries and the falling number of independent alcohol distributors are leading most states to open up their markets.

States are also now realizing they can reap tremendous revenue by taxing direct shipments, he said.

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Remy Cointreau First-Half Profit Climbs on U.S. , Asian Demand

Dec. 8 (Bloomberg) --

Remy Cointreau SA, Europe's fifth- largest liquor company, said fiscal first-half profit more than doubled, helped by demand for cognac in the U.S. and Asia and the sale of a Polish vodka unit.

Net income climbed to 42.9 million euros ($50 million) in the six months ended Sept. 30, from 18.7 million euros a year earlier, the Paris-based company said today in a statement published in la Tribune newspaper. Analysts estimated profit at 32 million euros, a Bloomberg survey showed.

Stripping out proceeds from selling the Polish vodka operations and other units, net income rose 39 percent to 24 million euros.

Chairwoman Dominique Heriard-Dubreuil has increased advertising on the company's main brands, such as Remy Martin cognac, and expanded in Asia as demand stagnates in Europe and competitors consolidate. The cognac division, Remy's biggest profit generator, had a 6 percent sales increase in the first half at constant currency rates.

``Modest sales growth masks the improvement in the product mix,'' Ixis analysts Francois Digard, Virginia Heeribout and Mathieu Picard wrote in a note to clients. ``Superior categories in the U.S. and Asia rose much more quickly.''

Sales rose 2.8 percent to 397.8 million euros in the first half. Operating profit gained 27 percent to 64.4 million. The company said it's maintaining its target of growing operating profit at least 10 percent this year. Net debt fell by 54.5 million euros to 808.4 million.

Remy's shares have gained 24 percent this year, partly on speculation that the company may be a takeover candidate after Pernod Ricard SA bought Allied Domecq Plc for about $13 billion to become the world's second-largest liquor maker.

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Three Port Producers For Sale ?

Source: International Drinks Bulletin

Three Port producers, representing about 10% of the sector, are effectively up for sale, Drinks Bulletin can reveal.

It has been an open secret in the Douro Valley for some time that some producers were open to bids, but industry sources have now named the

companies in question as Barros, Da Silva and Messias.

The sources suggest that Barros has been looking for outside investment for some time, but no deal is thought to be imminent. Less is known about the

situation with Da Silva, primarily an own-label supplier, and Messias, which sells mainly in Portugal . Consolidation has been ongoing, with the Symington Family Port Companies, The Fladgate Partnership and Sogrape now the ‘big three' of the industry.

Symingtons joint managing director Paul Symington recently predicted more consolidation, with mid-sized players particularly vulnerable.

Meanwhile, Fladgate MD Adrian Bridge believes Port is going through ‘a shakeout phase'.

Besides Symington, Fladgate and Sogrape, Sogevinus – the wine arm of Galician bank Caixa Nova – has been reported as a possible buyer of the shippers.

None of the three companies was available for comment.

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Diageo tests Lidl partnership for Baileys liqueur

Financial Times Deutschland; Dec 07, 2005

UK alcoholic drinks group Diageo is holding a trial partnership with German discount supermarket chain Lidl. Diageo liqueur Baileys is being sold in all of the 2,500 branches of Lidl across Germany this week at a cost of around 11 euros per 75cl bottle ($12.99). The UK group wishes to determine whether this move will increase sales or simply take sales away from other channels.

A spokesperson for Diageo said that a decision on whether to continue the cooperation would be taken at the start of January. The UK group had previously decided not to cooperate with discount chains such as Lidl and its rival Aldi. However, it is now looking to secure its position on the German market following a drop in sales. The cause for this fall in sales was down to a new tax on alcopops that was introduced last year. Discount supermarkets are also becoming increasingly dominant on the German market, thereby taking market share from branded products.

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Diageo unveils whisky portfolio plans

Source: International Drinks Bulletin

Drinks giant Diageo has unveiled a raft of new measures for its whisky portfolio in 2006.

Johnnie Walker, Buchanan's and the newly-acquired Bushmills will all be the subject of a drive to recruit younger drinkers from across the world into the whiskey sector. ‘Up until now our focus has been very brand centric but its time to focus more on the portfolio as a whole,' said director

of whisky, gin and Reserve Brands Stephen Morley. ‘We need to bring a new generation of drinkers into the category, because when people drink whisky they drink it for life.'

Johnnie Walker would increase its investment in China ‘significantly – in multiple tens of millions of pounds,' said Morley, adding that the brand grew 88% in China over the last 12 months. He added that a Shanghai auction recently sold a bottle of the very limited edition 1805 blend for £14,000 (E20,700).

Diageo's new Irish whiskey brand Bushmills is upping production by 30% to meet a series of new but as yet undisclosed listings in UK supermarkets.

Morley said Bushmills would be positioned as the choice of ‘people who are transitioning from Bourbon but not yet ready for malt whisky.'

Buchanan's will be bidding for a greater share of the Latin American market with the launch of Buchanan's Red Seal, a super-premium whisky priced around $120 (E103). J&B variant –6°C was not performing as well as hoped and would remain in the UK on-trade for the time being, said Morley. ‘It's still very much a test launch and is being a bit slower out of the starting blocks. I don't want to raise too many hopes too quickly – but we are looking at two or three additional markets.'

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Costco quarterly profit rises

52 minutes ago

Source: Reuters

Costco Wholesale Corp. (Nasdaq:COST - news), the largest U.S. warehouse club operator, said on Thursday quarterly profit rose nearly 12 percent.

The retailer, which competes with Wal-Mart Stores Inc.'s (NYSE:WMT - news) Sam's Club, said net income rose to $215.8 million, or 45 cents per share, in the fiscal first quarter ended on November 20, from $193.2 million, or 40 cents per share, a year earlier.

The company said its first-quarter results included about 1 cent per share in pretax charges related to damage from Hurricane Wilma in Florida .

Analysts, on average, had expected earnings of 45 cents per share, according to Reuters Estimates.

It said net sales in the quarter rose about 12 percent to $12.66 billion from $11.34 billion in the year-earlier period.

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Boston 's liquor stores face changing alcohol policies

By Jessica Kribbs / Daily Free Press

This is the second in a four-part series about how students affect various aspects of Boston 's economy.

Alcohol providers across the Hub have witnessed drastic changes to the city's alcohol policy, mostly with regard to underage drinkers. With the semester winding down, bar and liquor store owners and employees told The Daily Free Press about their businesses' policies, prices and patrons as they adapt to the changing legal climate.

T's Pub manager Stephen DiMarco said it is important to have the reputation that underage students will not be allowed in.

"People know we don't tolerate underage drinkers, so they don't even try," DiMarco said. "We screen well and have a lot of repeat clientele."

While many bar managers said students are helpful to their business, they explained that because many undergraduate students are younger than 21, they don't rely primarily on undergraduates for business.

DiMarco said that at T's, which is located on the Boston University campus, he relies on older patrons for consistent business.

"You have to be 21 to get in, and that's not a large percentage of the student population," DiMarco said.

Although Bill Lyons, general manager of Boston Beer Works on Brookline Avenue , said although he does not rely on college students for business, many young people from various colleges and universities in the area come to the bar.

"The proximity to all of the college absolutely helps us," Lyons said. "We get a lot of recent graduates as well as grad students."

However, the student population can also lead to rowdiness in bars. Robin Greenstan, manager of Pour House on Boylston Street , said that because 60 to 70 percent of their business comes from students, they have had problems with people getting too drunk.

"Our bar is more low-key, but we have definitely had problems with people getting out of hand," Greenstan said. "Generally though, it's actually easier to deal with youth because they are used to getting kicked out of bars. Older drunk people are more likely to fight with you."

THE COST OF A GOOD DRINK

Students agreed that drinking in Boston can be very expensive, so they tend to pick bars with special deals to avoid spending a lot of money.

"The Avenue in Allston is great, because they have dollar draughts and 20-cent wings," Emmanuel College sophomore Xiao-Wen Mak said.

Mak, who said he spends an average of $70 a night when he goes to bars, explained that he has started using Barfrog.com to save money.

"Barfrog is a great website that offers deals at a lot of the local bars," Mak said. "They sent out emails about specials and open bars at places like Kells and the Foggy Goggle, so we go there a lot."

School of Management junior Hilary Junk said she sets a budget for herself before she goes out.

"I try not to spend more than $20 a night," Junk said. "It can get really expensive."

College of Communication junior Danny Hayes agreed, saying he chooses cheaper bars in Allston.

"In my hometown, its 90 cents for a beer and 2 dollars for a mixed drink," Hayes said. " Boston is obviously nowhere near that cheap, and you have to work harder to find the best deals possible."

Hayes said to avoid spending too much money, he often drinks before going to the bars.

"I'll drink before I go out, and then I'll usually have a mixed drink and some beer at the bar," Hayes said. "Drinking in Boston is an art. You have to plan so you don't go broke."

SETTING THE BAR

A new regulation passed by the city's Licensing Board in October requires liquor store owners to provide the names and addresses of all keg buyers to the Boston Police Department on the day of purchase. The controversial new measure has led police to more closely monitor more off-campus student parties involving kegs.

Liquor stores agree that the new keg registration has made it easier to deal with students purchasing kegs.

"It really prevents the middle step of the police coming back to us for information if there is a problem," said Christina Pertillo, a manager at Liquor Land on Harrison Avenue . "Handing over the information first allows our involvement to end as soon as we sell the keg."

Pertillo explained that in the past, liquor storeowners kept records of keg purchasers, but only provided police with the information if it was requested.

Other liquor stores refuse to sell kegs at all so they can avoid the hassle of tracking keg buyers. Brookline Liquor Mart owner Lisa Miller Ryan said she does not readily provide kegs to students.

"We only special order kegs for corporations or adults that we know," Ryan said. "It's much easier for us to not sell them to just anyone."

Liquor stores said the biggest problem they have is with underage students attempting to use fake IDs. Most have implemented strict policies to keep underage students from buying alcohol.

"Underage kids attempt to buy alcohol as often as they can," Ryan said. "If they are with friends, we card everyone who comes to the register."

Ryan said that bigger items like beer balls, which are popular with students, require even more screening.

"We will follow them out to the parking lot to make sure there are not underage kids waiting," she said. "We have caught a lot of people that way and offer to give them a refund."

Boston bars also have strict policies to deal with the large student population. Lyons of Boston Beer Works said he requires the staff to go through TIP certification classes that teach bouncers and wait staff what to look for when checking IDs.

"Everyone is TIP certified, so we don't have too many problems with people using fake IDs because we know what to look for," Lyons said. "Because we've been around for 14 years, our clients know this, and we aren't a place underage kids would think about trying to get served at."

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Dunkin Brands sale expected soon

By James Politi in New York and Lina Saigol in London

Published: December 8 2005 01:03 | Last updated: December 8 2005 01:03

Pernod Ricard, the French drinks group, is in the coming days expected to consider final offers for Dunkin Brands, its fast food restaurants unit, with a view to finalising a sale as early as next week.

A handful of bidders for Dunkin, which could be valued in excess of $2.5bn, will have to place their best proposals by tomorrow, according to people familiar with the matter.

A sale would cap months of speculation about the fate of Dunkin, which Pernod decided to sell after taking control of it as part of its $14bn acquisition of the UK 's Allied Domecq in July.

Competing for the unit, which includes the Dunkin Donuts and Baskin Robbins restaurants chains, are at least three groups, mostly composed of private equity buyers.

One is made up of Bain Capital, Carlyle and Thomas H Lee Partners, which many external observers believe to be the favourite in the auction. Another includes Apollo Management and Triarc, the owner of Arby's Restaurants. A third group is made up of Providence Equity Partners and JPMorgan Partners, the private equity arm of JPMorgan, which is also advising Pernod on the sale.

Yum Brands, the Kentucky-based restaurants group, has also considered making an offer but was considered less likely to emerge as the winner in the auction.

Interest from Blackstone and Texas Pacific Group, two private equity groups with early ambitions to be contenders, appears to have waned in recent weeks.

Even before clinching the agreement to acquire Allied, Pernod had concluded that Dunkin was a non-core asset that could be sold.

The bidding for Dunkin began in October, with more than 40 potential buyers signing confidentiality agreements allowing them to access information on the unit.

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Alcohol sale banned in Indonesian capital

Jakarta | December 08, 2005 2:15:12 PM IST

The sale of most alcoholic drinks has been banned in markets throughout Jakarta in an effort to dry up the capital, local media reports said Thursday.

Jakarta 's industry and trade agency recently issued a circular prohibiting the sale of drinks with more than 5 percent alcohol, such as wine, champagne and spirits, citing 1997 presidential and ministry decrees on the monitoring and control of alcohol.

The capital's new ban on alcohol comes after a similar prohibition in neighbouring Tangerang municipality, which now bans the sale and distribution of all alcoholic drinks, including beer.

"We haven't been selling alcoholic beverages, other than beer, since the beginning of the fasting month, but since receiving the circular we have taken the products off the shelves altogether," Carrefour Indonesia's corporate affairs director Irawan Kadarman was quoted by the Jakarta Post as saying.

Following the ban, several popular supermarkets have already replaced their wine racks and alcoholic beverage shelves with cigarettes, beer and fruit juices.

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Lawsuit Planned Seeking US School Ban Of Sugary Drinks

Source: FWN

NEW YORK : A lawsuit is expected to be filed within the next few months against Coca-Cola Co., PepsiCo Inc. and their local bottlers seeking a ban against the sale of sugary beverages in U.S. schools, The New York Times reported Wednesday.

The newspaper said the suit will be filed in the state of Massachusetts by the Center for Science in the Public Interest and half a dozen other lawyers, several of them veterans of successful tobacco litigation.

Stephen Gardner, staff lawyer for the Center for Science in the Public Interest, The Times said, argues that soda and other sugary beverages are harmful to students' health and that selling those drinks in schools sends a message that their regular consumption is perfectly fine.

It said they plan to file the lawsuit in Massachusetts because it has strong consumer protection laws and happens to be where some of the lawyers are based. The lawyers say it will be the first of many such state lawsuits, according to The Times.

The newspaper said the $92 billion beverage industry, dominated by Coca-Cola and PepsiCo, is gearing up for a counterattack. Last week, the American Beverage Association, the lobbying group for the beverage industry, released a study arguing that soda sales in schools are not a significant contributor to rising childhood obesity rates.

Nearly half of all public schools in the U.S. have exclusive contracts with beverage companies, The Times said, and such contracts have been promoted as a continuing source of revenue for schools needing cash.

However, while the deals often give schools a large upfront payment and a share of the collected revenue, a study of public school contracts in Oregon concluded that the amount of money received by schools is not that significant and that by far, most of the revenue goes to the companies, not the schools, The Times said.

Susan K. Neely, president of the American Beverage Association, told The Times that the beverage industry had taken steps to address concerns over soda sales in school.

In August, the beverage association announced that beverage companies would stop selling soda and other drinks with added sugar in elementary schools and would restrict the sale of regular, full-calorie soda in middle schools to after-school hours only. Next month, the association is planning to run an ad campaign about the new policy.

But Gardner of the Center for Science in the Public Interest, a nutrition advocacy group, said that the beverage association's policy did not adequately address the sales of beverages in high schools, which is where the majority of purchases occur, according to The Times.

The Times said three tobacco litigation experts are also involved in the suit: Tim Howard, a Florida lawyer who helped the state win a $17 billion settlement against tobacco companies in 1997; Stephen A. Sheller, a partner at Sheller Ludwig & Badey in Philadelphia, who was involved in a successful $10 billion tobacco class action in Illinois state court that is currently under appeal; and Richard A. Daynard, an associate dean at the Northeastern University School of Law who has served as an adviser to many of the state tobacco lawsuits that led to a $246 billion settlement in 1998.

The Times said it has not been decided yet whether the group will seek financial damages. Under Massachusetts 's consumer protection law, successful plaintiffs are entitled to $25 per violation, which could mean $25 for every time a student has purchased a soda in a public high school in Massachusetts over the past four years.

Gardner told the newspaper he and the other lawyers realize that damages could run into the billions. "We haven't decided about this yet," he said. "We don't want this to come off looking like a greedy-lawyer lawsuit."