Engs, Ruth C. [Ed.], Controversies in the Addiction's Field. Harold Shoup,B. A. and Christine Dodday, M. B.A. "CHAPTER 15: Alcohol Advertising Restrictions Without Due Cause."
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CHAPTER 15 Alcohol Advertising Restrictions Without Due Cause
Harold Shoup,B. A. and Christine Dodday, M. B.A
Alcoholism and drunk-driving gained national awareness as two of society's primary ills during the tenure of the former United States Surgeon General C. Everett Koop.Alcohol advertising was condemned as the alleged root of these evils by those who subscribe to a simple, lineal theory: alcohol advertising increases alcohol abuse which increases drunk driving. But the theory has a basic flaw: it's wrong. It is not supported by research data, empirical evidence, or previous studies. Despite the compelling evidence, country after country has tried to affect alcohol consumption by limiting alcohol advertising; and has found such restrictions to have little, if any effect. In the United States, the fallacies surrounding alcohol advertising persist much to the detriment of the consumer. Although the movement to combat alcohol abuse is admirable, the measures undertaken must be proven effective when the freedom of commercial speech is at risk.
Ad Restrictions Do Not Solve the Problem
A study conducted by the FederalTrade Commission determined that, "... a review of the literature regarding the quantitative effect of alcohol advertising on consumption and abuse found no reliable basis to conclude that alcohol advertising significantly affects consumption, let alone abuse" (Crawford, 1985).
The University of Texas at Austin reinforced these findings. Over a twenty-one year period from 1964 to 1984, they examined the effect of alcohol advertising expenditure level on alcoholic beverage consumption in the U.S. "The findings indicate that advertising expenditure levels have no important relationship with aggregate consumption" (Wilcox, 1985). Anti-alcohol interests would have the public believe that alcohol advertising plays a major role in prompting abusive behavior but the
statistics prove otherwise.
In British Columbia and Manitoba, Canada and the U.S.A. the effects of alcoholic beverage restrictions showed no substantial link between advertising and consumption (Waterson, 1983; Smart and Cutler, 1976; Ogbourne and Smart, 1980). In France, imports of whiskey actually rose from 157,000 proof gallons in 1957—the year whiskey advertising was banned—to 6,294,O00 proof gallons in 1979. The ban, having proven ineffective, was then lifted (Waterson, 1983). This lack of a correlation cannot be overlooked when the dissemination of information on a legal product is in jeopardy.
Over the past few years, alcohol advertising expenditures have increased; however, alcohol-related traffic fatalities have decreased. (See chart below).
Thus, the evidence indicates that other factors, such as society's intolerance of alcohol abuse, stronger law enforcement, educational programs, and public service initiatives are responsible for the decline in alcohol abuse and that the volume of product advertising is irrelevant.
The statistics are equally impressive among teenage drivers. In the 16-19 year old range, fatal crashes involving teenage drivers declined to 18.7% in 1987, down from 21% in 1986, and 28.4% in 1982. (Federal Register, 1988). These significant were achieved with no restrictions on commercial speech.
The Role of Alcohol Advertising
It may seem illogical or counter-intuitive that alcohol advertising does not significantly affect overall consumption of the product. However, a careful review of the data reflects an intense inter-brand rivalry, not an attempt to attract new drinkers to that product. Alcohol is a "mature" product category, which means that consumers are aware of the product and its basic characteristics; therefore, the overall level of consumption is not affected sigruficantly by the advertising of specific brands.
In this latter regard, it is significant to note that the Health and Human Services Department in its Seventh Special Report to the U.S. Congress on . Alcohol and Health (1989), concluded that "research has yet to document a strong relationship between alcohol advertising and alcohol consumplion." This same report also makes no recommendation to ban or restrict alcohol advertising.
Marketing strategists in mature product categories realize that the over-riding objective of advertising is to promote brand loyalty and encourage brand switching. In the same way that manufacturers of laundry detergent and tooth paste promote their brands, producers of alcoholic beverages advertise their brands to protect and expand their share of the available market.
An examination of the nature of the beer industry illustrates the very practical reasons why market share is so critical to every participant in this market.
The domestic annual retail market for beer is roughly $40 billion. Thus, an advertising campaign that would gain just one point of additional market share would produce $400 million in increased sales for the brewer advertising the product. On the other hand, if total beer consumption increased one percent (and that would be a quantum leap forward for this relatively static category), a brand with a 10% shale would only gain $40 million in sales.
Attempts by any one brand to "grow" the total market simply don't make sense. The potential return for any single brand would be in the
Scenario 1: Increase Total Market
Total beer market is: $ 40,000,000,000
Brand A's share is 10 percent, or: $ 4,000,000,000
Total market increases by one percent to: $ 40,400,000,000
Brand A's 10 percent share is now: $ 4,040,000,000
Scenario 11: Increase Market Share
Total beer market remains flat at: $ 40,000,000,000
Brand A's share increases by one percent, or: $ 400,000,000
Brand A's 11 percent share is now: $ 4,400,000,000
Table 15.1 Money differences between increasing total market versus increasing market share.
approximate proportion to its existing share of the market. Small wonder, then, that brand managers target their advertising dollars on established consumers of their products in a effort to reinforce brand loyalty or encourage trial by users of other brands. Brand managers realize that the name of the game is share of market, not size of market.
The Constitutional Right to Advertise
It is also illogical and inappropriate to deny consumers access to truthful information that helps them make informed purchase decisions. Approximately two-thirds of Americans consider themselves drinkers according to the U.S. Surgeon General (Press conference, May 5, 1989). For the consumer, advertising plays an important role in providing information about alcoholic beverages. It communicates information on new products such as wine coolers and low-alcohol beer, as well as information on pricing and packaging. Just as alcohol producers have the right to distribute information via advertising, the consumer has the right to receive it. In this sense, it is fundamental to both our government and our economy that people can be trusted to make wise decisions if they have access to all relevant infommation. Proposed restrictions to limit commercial speech have a resultant diminution of the First Amendment rights of both alcoholic beverage advertisers and consumers.
Recognizing this fundamental danger, the Supreme Court has ruled that such restrictions on commercial speech must advance a specific
government interest and be narrowly tailored in its method of doing so. (Central Hudson,1980) Thus, freedom of commercial speech cannot be swept aside by advertising bans and restrictions that would have an unsubstantiated effect on product abuse and simultaneously deprive responsible consumers of their right to truthful information.
The problems of alcohol abuse are complex and cross an sections of society. The only successful way to address alcoholism is to confront the socio-economic, psychological, and possibly genetic factors which can be directly linked to the behavior. The subjective and arbitrary singling out of advertising as a major controlling cause of abuse is unsupported by research. Alcohol advertising already is regulated heavily by the government. Before further regulations are imposed they should be supported by facts and not by assumptions. Such a dangerous precedent ignores the legitimate interest of both producers and consumers of a legal product.
Central Hudson Gas and Electric corp. vs. Public Service commission 447 U.S.557 (1980) 561-562.
Crawford, C.T. and Gramm, W.L. (1985). Writhing in the cover memo to Omnibus Pension for Regulation of Unfair and Deceptive Alcoholic Beverage Advertising and Marketing Practices (Docket No. 209-46), Federal Trade Commission, p.2 (March 6).
Ogbourne, A.C. and Smart, R.G. (1980). MU restrictions on alcohol advertising reduce alcohol consumption? The British Journal of Addiction, 75 296-298.
Presidential Document (1983). Proclamation 5918 of December 5,1988, cited in the Federal Register, 53 (235) 49287-49288 (December 7).
Seventh Special Report to the U.S. Congress on Alcohol and Health (1990). U.S. Department of Health and Human Services. Public Health Service. Drug Abuse and Mental Health Administration. National Institute of Alcohol Abuse and Alcoholism: Rockville, MD.
Smart, R.G. and Cutler, R.E. (1976). the alcohol advertising ban in British Columbia: Problems and effects on beverage consumption, The British Journal of Addiction, 7 13-21.
Surgeon General C. Everett Koop's Press Conference, May 31, 1989
Waterson, M.J. (1983). Advertising and Alcohol Abuse, a report published by the Advertising Association, p. l0.
Wilcox, G.B., Franke, G.R., and Vacker, B. (1986). Alcohol beverage
advertising and consumption in the United States: 1964- 1984. Department of Advertising Working Paper, The University of Texas: Austin, p. III (January).
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