Liquor Strategy May Threaten Beer, Wine Ads Here's a quiz: Beer, wine, and distilled spirits are all forms of beverage alcohol, and typical servings of each contain about the same amount of alcohol. Therefore, when it comes to advertising on TV, beer, wine, and distilled spirits should: (a) all be allowed to advertise; or (b) all be banned from advertising. The distilled spirits industry is hoping that policymakers will pick answer (a). Beer and wine makers, however, fear that policymakers will choose (b). Thus has the distilled spirits industry's "equivalency" argument pulled brewers and vintners into an all-or-nothing policy play which, they fear, may cost them their right to advertise on TV. The FTC's probe into the advertising of both Seagram Co. and Stroh Brewery Co. is an early sign that trouble may be brewing for beer and wine makers. It's a high-stakes game. Beer ads pour about $630 million annually into TV and radio coffers. Wine ads account for nearly $50 million more. The prospect of those revenues drying up leaves broadcasters a bit nervous, too. But the liquor industry is undaunted. "There is no basis to arbitrarily draw the line at our entry," says Fred A. Meister, president and CEO of the Distilled Spirits Council of the United States. "There are no reasons related to the welfare of our children or the well-being of our society for any distinctions." Commercial speech advocates may agree that alcohol in any form is a legal product and thus should have a right to be advertised. On principle, the answer above would be (a). But what about the politics? "While the current FCC chairman may have forgotten about the First Amendment, I'm confident that several of his colleagues, the Congress, and the courts are appropriately sensitive to the vitally important First Amendment rights of broadcasters and responsible advertisers," Meister said. Given government's First Amendment performance in 1996, that's a pretty big assumption.

FCC, FTC Congress Eager To Scrutinize Distilled Spirits Advertising on Television By Richard T. Kaplar Seagram's television spots for its Crown Royal and Chivas Regal brands have caught more than the eye of potential consumers -- the ads have also sparked the interest (and in some cases ire) of federal lawmakers and regulators at the Federal Communications Commission and Federal Trade Commission. As a result, liquor advertising on television promises to be one of the most explosive commercial speech issues of 1997. FCC Chairman Reed Hundt, now one of Washington's most outspoken critics of liquor ads on TV, has been pushing fellow commissioners to approve an FCC inquiry into the effects of liquor ads on children. He has also hinted that regulations may be in order. So far, however, Hundt has failed to mobilize a majority of the Commission into action. Meanwhile, the FTC announced its own investigation and said it planned to subpoena information from Seagram Co. and Stroh Brewery Co. The FTC's consumer protection unit was charged with scrutinizing the content and placement of ads with an eye toward their effect on children. An FTC staffer declined to comment further, stating that investigations are conducted privately. Congress is poised to jump into the fray as well. Rep. Joseph P. Kennedy II (D-Mass.) plans in February to reintroduce his "Just Say No Act," which would outlaw ads for distilled spirits on electronic media under FCC jurisdiction. That would include cable channels, a popular venue for liquor ads thus far. Rep. Kennedy has circulated a "Dear Colleague" letter to round up additional sponsors. Subcommittees of the House and Senate Commerce Committees are considering hearings on alcohol advertising, but none is scheduled at this writing. The Ball Starts Rolling. Policymakers reacted almost immediately when Seagram Co. announced in June 1996 that it would begin running test ads for Crown Royal whiskey on KRIS-TV in Corpus Christi. Rep. Kennedy introduced his Just Say No Act on June 13, stating that Seagram's move "could open the airwaves to a flood of hard-liquor ads." The bill went nowhere, so on Oct. 3 Rep. Kennedy and seven House colleagues wrote to the FCC"s Hundt, asking him to initiate a notice of inquiry and to hold hearings. Hundt was eager, but his enthusiasm was not shared throughout the Commission. Commissioner James H. Quello, for example, said that FCC involvement would likely yield "an ineffective, and possibly counterproductive, effort to devise a regulatory solution." That view notwithstanding, FCC Chief of Staff Blair Levin wrote to four local stations in November requesting information about their airing of liquor ads and asking for tapes of the commercials. Stations in Houston and Corpus Christi, Texas, and Manchester and Derry, N.H., received the request. Seagram's action in June broke a 48-year-old voluntary industry ban on TV advertising. On Nov. 7 the industry's trade group, the Distilled Spirits Council of the United States (DISCUS), announced it was lifting the voluntary ban. "Choosing not to exercise one's First Amendment rights does not mean those rights expire," said Fred A. Meister, president and CEO of DISCUS. "There is no reason to ask the spirits industry not to advertise on television when no one is asking its competitors to do likewise." To date, the feared "flood" of liquor ads is a trickle at most. About 70 local stations are reported to have accepted liquor ads, and Seagram has been joined by only one other advertiser, Grand Metropolitan Paddington Corp.'s Baileys Irish Cream. Ad agencies representing other brands, however, reportedly have been sounding out local stations. The three major networks continue to refuse the ads, reflecting long-standing policies.