Regulatory Beat

FTC Seeks Info From 8 Alcohol Marketers, Forces Beck's Beer, Kahlua Ads Off Air

By Richard T. Kaplar

By January the Federal Trade Commission plans to tell Congress whether alcohol advertisers are targeting their products to underage drinkers. The report could launch a new wave of congressional interest in restricting alcohol ads in the name of protecting children if it concludes that the industryšs self-regulatory measures are coming up short.

Last August the FTC asked eight alcohol producers and marketers to submit "special reports" by Oct. 5 describing their advertising and marketing practices. In addition to television advertising, the FTC wants information on product placements in movies, advertising on the Internet, college marketing, and other promotional activities.

The eight companies are Anheuser-Busch, Bacardi Martini, Brown-Forman, Adolph Coors, Diageo, Miller Brewing, Stroh Brewery, and Seagram.

In November 1997 Congress asked the agency to conduct a study of alcohol advertising and underage drinking.

The study will try to determine "how well existing self-regulatory efforts are working to discourage advertising that is attractive to those under 21," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. Also under scrutiny will be the industry's procedures for handling alleged violations of its voluntary standards, and its public service activities to discourage underage drinking.

The study will also review the voluntary codes of the beer, wine, and distilled spirits trade associations, each of which contains restrictions on marketing to underage consumers.

Move Over, Tobacco

"It's time to get the country looking at the alcohol industry in exactly the same way we're looking at tobacco," says Sandy Golden, president of the Tampa, Florida-based Campaign for Alcohol-Free Kids. "We're 10 to 15 years behind the tobacco people, and we want to close that gap in the next year or two."

Golden is pushing for a presidential commission to "address the issue of underage drinking." He says a commission to study and propose new regulations on alcohol advertising is "just a matter of time."

Golden has filed a formal petition with the Federal Communications Commission, calling for a rule that would let parents screen out alcohol ads from their television sets with V-chip technology.

— Quoted in Reason Magazine, Nov. 1998

The information requests to the eight companies are merely part of a data collection effort and not a formal investigation of suspected wrongdoing, stressed Lee Peeler, FTC associate director for advertising practices.

Last summer the agency charged two alcohol marketers with violations of federal law and reached settlements in which the companies agreed to pull their TV ads. Beck's North America had been airing an ad showing young adults on a boat holding beers, "engaging in acts that pose a substantial risk of falling overboard and drowning," the FTC charged.

The agency also cited a commercial for Kahlua White Russian premixed cocktail. The ad, which appeared only on seven cable channels, claimed that the drink was low in alcohol content. Kahlua marketer Allied Domecq Spirits & Wine Americas, Inc. agreed to refrain from "misrepresentations of alcohol beverage content" in future ads, and agreed to give the FTC information about its advertising plans for the next five years.

At the FCC, meanwhile, the issue of alcohol advertising sprang to life again briefly over the summer when the Distilled Spirits Council of the United States began airing a 30-second public service ad on a Washington, D.C., television station.

The ad made the liquor industry's "equivalency" argument, that typical servings of beer, wine, and distilled spirits all contain about the same amount of alcohol. But the spot ended with a close-up of several brands of spirits, including Jim Beam, Jack Daniels, Smirnoff, and Bacardi, lined up on a bar.

That shot prompted FCC Chairman William Kennard to wonder aloud if such public service ads were "nothing more than veiled commercials for liquor." He said he intended to survey television stations to see how many planned to carry such ads. By late October, however, the survey idea had been put on the back burner, according to Kennard's senior legal advisor Susan Fox.

DISCUS spokesperson Lisa Hawkins said the trade group decided to run the ad on WJLA-TV in Washington from July 4 through mid-August because both organizations were sponsoring the Legg-Mason Tennis Tournament in Baltimore.

"We saw this as an opportunity to deliver an important educational message to thousands of people in a major market," Hawkins said. The ad is not running presently and the group has no plans to air the ad elsewhere, she added.

Of the major networks, all have policies prohibiting commercials for distilled spirits brands. Local broadcast stations shy away from the ads, fearing reprisals from the FCC at license renewal time. As a result, liquor ads have gravitated toward cable channels, although even there the rollout has been slow since DISCUS changed its voluntary code in 1996 to allow television advertising by its members.