San Francisco, June 16 - Diageo-Guiness USA, a unit of alcoholic beverage maker Diageo Plc, said on Monday it is suing California's Board of Equalization to challenge regulations that would raise taxes on flavored beer by 1,600 percent.
Diageo said it filed the suit on Sunday along with the Flavored Malt Beverage Coalition, saying flavored, or malt- based beer should continue to be taxed as beer and not as distilled spirits.
The suit seeks to establish that the state agency does not have the authority to classify alcoholic beverages for taxation purposes, a power that it says belongs solely to the Department of Alcohol Beverage Control.