Last month, I discussed the negative impacts that a nutritional label mandate would have on small producers of alcohol beverages, such as craft brewers. Another side of this issue is the negative impact that prohibiting nutritional labels has caused small and large alcohol beverage producers—as well as health-conscious consumers of adult beverages.

I sat down with the executive Vice President of Diageo, one of the world’s largest producers of adult beverages (its brands include Guinness, Smirnoff, Jose Cuervo, and many others) to discuss how voluntary labeling could help both consumers and producers of alcohol, big and small.

In 2004, the National Consumers League called on the Federal Alcohol Tax and Trade Bureau (TTB) to reform alcohol label requirements so that consumers of adult beverages can make better nutritional decisions (it wasn’t the only group calling for change). At that same time, Diageo began its lengthy battle with the TTB to be able to attach to its products labels that included information on calories, carbohydrates, and alcohol content. The agency rejected Diageo’s request.

Now, seven years later, the TTB has not changed its rules, and consumer groups have asked again that it issue a final rule. However, in 2007 the TTB did issue a notice of proposed rulemaking that would amend its regulations to require a statement of alcohol content on all alcohol beverage products as well as a “serving facts” panel on alcohol beverage labels that would include a disclosure of calories, carbohydrates, fat, and protein. According to TTB spokesman Tom Hogue, the issue is a complicated one and federal officials aren’t likely to issue a final rule anytime soon.

While Diageo and other alcohol beverage manufacturers strongly support the idea of allowing nutritional data to appear on bottles, they currently support doing so on a voluntary basis. “Let the market place decide. If companies don’t think their consumers want labels then don’t have labels, but don’t prevent us from telling our consumers what’s in our products,” said Diageo Executive Vice President Guy Smith.

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The recent ruling of the House Ethics committee against Charlie Rangel has attracted a tremendous amount of attention and has put substantial pressure on House Democrats, especially Nancy Pelosi. The Atlantic’s Marc Ambinder even reported one Democratic strategist claiming that it “loses us the House.” The basics of the story are that Rangel and his staff failed to disclose a series of facts about corporate sponsored trips about Caribbean policy.

However, there’s another Caribbean scandal that could burn Democrats. In February, Pro Publica’s Marcus Stern reported that Congress and the Virgin Islands will give British alcohol conglomerate Diageo a $3b subsidy if they shift production from Puerto Rico to the US Virgin Islands. Previously, I had written about this issue, including Rangel’s threats against the Puerto Rican health system.

But now an ad, pictured here, is running in Montana asking Senate Finance Committee Chair Max Baucus why he is putting up with this. That’s turning up the heat a little.

Another rum producer told the Billings Gazette that the subsidy “is so large it’s twice the cost of production.”  That is, if Diageo spends $100 making rum in the Virgin Islands, they get $200 from the federal government. Then Diageo gets to sell the rum too! Diageo’s 2008 operating profit was £2.2 billion and 2009 sales were $20 billion.

Now, I understand — disagree but understand — US taxpayers giving struggling American farmers a subsidy to make ethanol. (rum is also ethanol) I don’t understand why US taxpayers are giving billions to an already highly profitable, publicly traded British booze company.

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