What Are The History, Laws, Profitability And Social Responab Essay, Research Paper
WHAT ARE THE HISTORY, LAWS, PROFITABILITY, AND RESPONSIBILITES
TO THE CONSUMER OF ADVERTISING HARD LIQUOR ON TV IN THE UNITED STATES? INTRODUCTION
Purpose The goal of this report is to inform the reader of the recent events that
prompted hard liquor advertising on TV. In addition, the laws associated with
advertising across this media, as well as recent legislative endeavors to control
such advertising. Furthermore, the report also focuses on the potential profitability
the distilled spirit’s industry will gain from advertising across this media and
the industries social responsibilities to the consumer. Sources and Methods Research
for this report is gathered mainly from information found on the World Wide Web.
Some information was gained through newspaper articles obtained by using the InfoTrac
system in the Ruth Scarborough Library on the Shepherd College Campus. Refer to
the sources section for specific information references. History Research by the
Distilled Spirits Council of the United States (DISCUS) found that 30 to 50 percent
of Americans think that distilled spirits are being advertised on TV. Since Prohibition
the hard liquor industry voluntarily agreed not to advertise their products, first
on radio in 1936, and of TV in 1948. However, the industry is being faced with
declining sales. Their competitors such as the beer and wine industries have grown.
The sales of beer and wine have increased dramatically, leaving the hard liquor
industry behind. The main reason for this occurrence is due to the fact that these
industries have tapped into the resource of advertising on TV. Consequently, this
has prompted the hard liquor industry to reevaluate its current marketing situation.
The first company to take the leap to TV is Seagram. The Seagram company began
advertising 30-second Crown Royal whiskey commercials in Corpus Christi, Texas.
1 2 Definitions The words “distilled spirit” is used throughout this report. Distilled
spirits and hard liquor in this report have the same meaning. Distill means to
let fall, exude, or precipitate in drops or in a wet mist according to Webster’s
Dictionary. Hard liquor is the end result of this process using the appropriate
ingredients. Distilled spirit is any alcoholic beverage not defined as beer or
wine. Laws Constitutional The right to advertise is constitutionally protected
commercial free speech under the First Amendment. This fact is being upheld in
a recent commercial free speech decision by the Supreme Court. The case of 44
Liquormart, Inc. vs. Rhode Island upholds the industry’s commercial free speech
rights by insuring that beverage alcohol is allowed the same protection under
the First Amendment as other legal products and services. In addition, the Courts
also ruled that truthful and non-misleading advertising is an essential part of
the free enterprise system. Withholding this form of advertising deprives the
consumers of knowledge that is needed to make conscious and informed decisions.
Federal Regulations Advertising hard liquor on TV is a constitutionally protected
right, however, the industry must follow strict Federal regulations. An advertisement
of distilled spirits can not contain any false or misleading statement that tends
to create a misleading impression of the product to the consumer. Furthermore,
a statement in an advertisement cannot say anything bad about a competitor’s product.
Provisions are made also for a statement’s design that cannot contain any material
that is obscene or indecent. Federal regulations do not permit claims of distilled
spirits having curative or therapeutic qualities. This practice was very popular
in the 1800’s and early 1900’s. Traveling salespersons would often stage a show
in the middle of small towns claiming a miracle cure for various sicknesses. Most
often, the cure would involve alcohol consumption causing the consumer to become
intoxicated. This advertising was false and misleading. Flags, seals, coats of
arms, crests, and other insignias which can be capable of relating to the American
flag or a branch of the armed forces is strictly prohibited. The advertisement
can not mislead the consumer into thinking that the product is endorsed, made,
used by, or produced for any of the government, organizations, or families these
insignias are associated. 3 The use of deceptive advertising techniques such as
subliminal techniques are also prohibited under federal regulations. Subliminal
techniques refer to any advertising technique that attempts to convey a message
to a person by means of images or sounds that are very brief. These messages usually
cannot be perceived at a normal level of awareness according to federal regulations.
The federal regulations above are only a select few. There are many constraints
on advertising distilled spirits. In addition to advertising constraints there
are many prohibited practices concerning bottling and labeling of hard liquor.
Persons who are interested in finding out this information it can be found on
the World Wide Web at http://143.231.208.199/. 104TH Congress Bills Federal regulations
for hard liquor advertising are very strict. However, some lawmakers believe that
the regulations are not strict enough. United States Representative Joe Kennedy,
Democrat from Massachusetts, is a major player in introducing legislation to further
restrict or stop distilled spirits advertising. Mr. Kennedy introduced several
bills to the 104th Congress. The first bill he introduced is known as the “Children’s
Protection from Alcohol Advertising Act of 1996″. The purpose of this bill is
to establish advertising requirements for alcoholic beverages. Restrictions proposed
by this bill are that no alcoholic beverage can be advertised on any audio tape,
audio disc, videotape, video arcade game, computer game or in film. Furthermore,
no outdoor advertising of alcoholic beverages can be located within one thousand
feet of any school, playground, or other public facility where persons under 21
are expected to be present. Another major provision of this bill is to restrict
any advertisement on TV between the hours of 7:00 A.M. and 10:00 P.M. to be limited
to only a picture of the beverage with factual, objective audio information about
the beverage. A second bill introduced by Mr. Kennedy is the “Sensible Advertising
and Family Education Act”. The act requires Surgeon General’s Warnings on all
media advertisements on TV. Such warnings as “Alcohol is a drug and may be addictive”
(WWW, Sensible Advertising and Family Education Act). A third bill introduced
is the “Alcohol Advertising Accountability Act of 1996″. The bill proposed by
Mr. Kennedy and others requires the Secretary of Health and Human Services to
report annually to the Congress on alcohol advertising. The report consists of
alcohol advertising profiles and its effects on consumers. In addition, the above
bill will require the Secretary of Health and Human Services to establish a panel
to assist in gathering information. The information will consist of the 4 media
used by alcohol advertising to reach children. Furthermore, the total expenses
for alcoholic beverage advertising in each media such as TV, magazines, and radio.
The report will also identify the types of themes, especially on TV ads, of advertising
beverage alcohol. The report content will also include a determination of the
extent young people are exposed to alcohol advertising. The relationship between
alcohol advertising practices and underage drinking will also be evaluated. Consequently,
the evaluation of the above factors will include recommendations for legislation
by the Secretary of Health and Human Services. The most recent bill introduced
by Mr. Kennedy is the “Just Say No Act”. His undying efforts to ban alcohol advertising
is enforced in this bill. Mr. Kennedy suggests that distilled spirits on any medium
of electronic communication shall be unlawful. PROFITABILITY Target Market The
market for distilled spirits is shrinking as its loyal customers are aging. The
need for a younger market has spawned the industries decision to advertise in
order to increase profits. The graph below represents the percentage of people
who say they drink, and their respective age. Furthermore, the graph compares
the type of alcohol each age group is inclined to drink. Corporate Profits 5 According
to Impact, a publication for the alcoholic beverage industry, distilled spirits
will show its first growth in 15 years. The total spirits category is expected
to rise 0.3 percent. In addition, the top 25 premium brands are expected to be
up 4.9 percent. Crain Communications Inc. suggests that “the turnaround comes
as some liquor marketers are attempting to move into TV?”(WWW, Spirits Sales Drought
Eases). Media Profits Corporations are not the only beneficiaries to increasing
profits. The media has much more revenue to gain from this venture to TV. However,
the major networks, do not want to air hard liquor advertisements. They fear they
will lose money from beer and wine marketers. This is not the case with locally
owned affiliates and some cable networks. They will accept part of almost $228
million the industry spends annually on advertising. SOCIAL RESPONSIBILITY DISCUS
Code of Good Practice DISCUS is the trade association representing producers and
marketers of distilled spirits sold in the United States. The association claims,
” the industry holds itself to a higher standard than required by any laws or
regulations that apply to the marketing or advertising of beverage alcohol “(WWW,
DISCUS Code of Good Practice: An Enduring Example?). The industry not only has
to follow strict government regulations, as discussed in the law section of the
report, but has its own voluntary Code of Good Practice for distilled spirits
advertising. According to DISCUS the code has two fundamental principles: ” (1)
to ensure responsible, tasteful, and dignified advertising and marketing of distilled
spirits to adult consumers who choose to drink”, and ” (2) to avoid targeting
advertising and marketing of distilled spirits to individuals below the purchase
age” (WWW, DISCUSS Code of Good Practice: An Enduring Example?). The Code of Good
Practice contains provisions on responsible content and responsible placement
of spirits advertising. A few provisions are firstly, distilled spirits should
not be advertised or marketed in any manner directed or primarily intended to
appeal to persons below the legal drinking age. Secondly, distilled spirits advertising
should not depict a child or portray objects, images, or cartoon figures that
are popular with children. Finally, distilled spirits advertising should portray
distilled spirits and drinkers in a responsible manner. 6 Public Education DISCUS
members of the distilled spirits industry claim to pay a vital role in fighting
alcohol abuse. DISCUS supports, develops or initiates social responsibility efforts
to educate the public about beverage alcohol. The Century Council is a non-profit
organization mainly supported by DISCUS and its members. Their objective is to
reduce alcohol abuse across the U.S. The Century Council investigates, funds,
and implements innovative approaches to address the problems of underage drinking
and drunk driving. DISCUS and its members not only support the Century Council
but various other organizations as well. A few of these organizations are the:
White House Leadership Conference on Youth, Drug Use, and Violence, the National
Commission Against Drunk Driving(NCADD), BACCHUS ( Boosting Alcohol Consciousness
Concerning Health of University Students), and “Friends Don’t Let Friends Drive
Drunk”. Everyone of these organizations deal with the curbing of underage drinking,
alcohol abuse, and other various problems. DISCUS involvement with the above organizations
are not the only social obligations the establishment is concerned with. In 1994
they initiated legislation to Congress known as the “Drunk Driving Prevention
Act”. The act make provisions to include mandatory alcohol and drug education
for drivers. In addition, the ban of open containers in vehicles and zero tolerance
for drivers under age 21 who are caught drinking. The act also includes Administrative
Licenses Revocation(ALR) whereby authorizing a police officer to confiscate the
license of any driver who fails a chemical test or refuses to take one. Many of
these laws are in use today, thereby being adopted by state legislature. Parental
Guidance Roper Starch research organization conducted a national survey asking
young people what influenced their decision to drink or not drink. The survey
resulted in 60 percent citing their parents as their primary influence, 28 percent
cite their peers, while only 4 percent site advertisements. The results of this
research suggest that distilled spirits advertising is not the culprit for alcohol
abuse. Improper parental guidance and lack of public education is the determining
factors in alcohol abuse. CONCLUSION The conclusion reached through this report’s
findings are that: 7 . The distilled spirits industry should be allowed to advertise
on TV along with beer and wine. The industry should get equal and fair treatment
as the other alcohol industries afforded by the First Amendment. . Government
will always pose regulations on industry. The role of the government is to protect
and serve the citizens of the U.S. The distilled spirits industry has and will
continue to abide by these regulations. The industry claims to hold itself to
higher standards than that of the regulations imposed by government. . The answer
to America’s alcohol problems is not to ban advertisements. Free speech and the
promise of a better tomorrow is what makes this country great. Public education,
parental guidance and freedom of choice are the answer to the problems. ii
e29
Code of Federal Regulations. CITE: 27 CFR Sec.5.63. EXPCITE Title 27. CHAPTER
I. SUBCHAPTER A, PART 5, Subpart H. Online. Http://143.231.208.199/cgi-bin/fastweb..wAAA+distilled%26spirits%26advertising.
Code of Federal Regulations. CITE: 27 CFR Sed.5.65. EXPCITE Title 27. CHAPTER
I. SUBCHAPTER A, PART 5, Subpart H. Online. Http://143.231.208.199/cgi-bin/fastweb…wAAA+distilled%26spirits%26advertising.
Crain Communications Inc. “Spirits Sales Drought Eases:.” (Dec. 1996). Online.
Http://adage.com/ns-search/news-an…/. Dallas(AP). “Liquor Ads Start on Television
After Decades-Long Voluntary Ban.” The New York Times. (June 12,96). Online. Http://www.newstimes.com/archive/jun1296/
nab.htm. Distilled Spirits Council of the U.S. “Beverage Alcohol Advertising:
A Constitutionally Protected Right.” Online. Http://www.discuss.health.org/adcode/const.htm.
Distilled Spirits Council of the U.S. “DISCUS Code of Good Practice: An Enduring
Example of Social and Corporate Responsibility.” Online. Http://www.discuss.health.org
/adcode/code.htm. Distilled Spirits Council of the U.S. “Distillers Change Advertising
Code to Advance Equal Treatment.” Online. Http://www.discus.health.org/adcode/prad.htm.
Distilled Spirits Council of the U.S. “Distillers Spirits Advertising in Perspective.”
Online. Http://www.discus.health.org/adcode/adpers.htm. Distilled Spirits Council
of the U.S. “Social Responsibility and Public Education: The Distilled Spirits
Industry’s Commitment to Curbing Alcohol Abuse.” Online. Http://www.discuss.health.org/adcode/social.htm.
Jackson, Jerry T. “Dor Issues Policy Statement Regarding Liquor Advertising.”
(July, 1996). Online. Http://www.state.ga.us/Departments/DOR/pressrel/p071296a.htm.
McDowell, Bill., Teinowitz, Ira. “Cable Network To Take Liquor Ads.” (Nov., 1996).
Online. Http://adage.com/news_and_features/features/19961111/article5.html. iii
U.S. House Of Representatives. “Alcohol Advertising Accountability Act of 1996(Introduced
in the House). “Online. Http://rs9.loc.gov/cgi-bin/query12?c104: H.R.+3475:. U.S.
House Of Representatives. “Childrens Protection from Alcohol Advertising Act of
1996(Introduced in the House).” Online. Http://rs9.loc.gov/cgi-bi/query/2?c104:
H.R.3473:. U.S. House Of Representatives. “Just Say No Act(Introduced in the House).”
Online. Http://rs9.loc.gov/cgi-bin/query/2104:H.R.+3644:. U.S. House Of Representatives.
“Sensible Advertising and Family Education Act.” Online. Http://rs9.loc.gov/cgi-bin/query/1?c104:./temp/~c104H0mc!e817:.
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