Leave Alcohol Ad Curbs to Industry, FTC Report Says

Government regulators say the alcoholic beverage industry needs to adopt tougher standards to prevent marketing beer, wine and liquor to people under 21.

In a report to Congress late Thursday, the Federal Trade Commission said alcohol companies have used television shows and films popular with youth to promote their beverages--despite voluntary rules against marketing to underage drinkers.

But the FTC stopped short of recommending government regulation of alcohol advertising, which amounts to about $1 billion annually.

Instead, the commission said the industry needs to impose stricter voluntary rules and employ an independent monitor to make sure those rules are followed.

Within the alcoholic beverage industry, reaction to the FTC’s report was mixed, with beer companies generally opposed to it and distillers finding validation of their right to advertise.

Groups working to prevent underage drinking were disappointed with the report because it endorses only self-regulation by the industry.

“We’re not happy,” said Fritz Wiecking, a lobbyist with the Washington-based Center for Science in the Public Interest. “We would like to see legally enforceable standards. The FTC could have done that.”

The report was prompted by concerns about underage drinking, fueled in part by the liquor industry’s tentative move into broadcast advertising three years ago.

Additionally, various surveys have shown that children readily recognize the Budweiser frogs, raising concern about the effect of such advertising on youngsters.

The FTC reviewed confidential documents submitted by the eight largest alcoholic beverage companies and found that they used media popular with youth.

The FTC found product placements in PG and PG-13 movies, along with other films targeted at underage youth.

In addition, product placements occurred on eight of the 15 most popular TV programs among teenagers.

The FTC said four companies could demonstrate that nearly all their television ads reached a predominantly legal-age audience.

But two other companies that the commission did not name had weeks in which many of their ads reached audiences that were mostly under 21.

The two remaining companies did not provide audience information to the FTC.

The eight companies surveyed were Anheuser-Busch Inc., Bacardi-Martini USA Inc., Brown-Forman Corp., Coors Brewing Co., Diageo, Miller Brewing Co., Joseph E. Seagram & Sons Inc. and Stroh Brewing Co., which is no longer in business.

Industry advertising codes require that ads be restricted to shows where for which more than 50% of the audience is 21 or older--a limit that enables alcoholic beverage companies to reach many underage viewers, the FTC said. People under 21 account for 30% of the general population.

The FTC noted that some companies have tougher standards. Coors, for example, requires that 60% of its viewers be 21 or older. Other firms require that 75% of their audience be of legal drinking age, the FTC said.

The commission recommended that the industry tighten the 50% limit but did not specify what the new audience breakdown should be. Instead, the report said, the industry should follow the lead of firms using the “best practices.”

As for motion pictures, the FTC said the industry should limit product placement to films rated R and NC-17.

In an interview, FTC attorney Janet Evans said the commission was not sending a message to the entertainment industry about using alcoholic beverages in films when a script calls for it. “That is protected free speech,” she said.

Evans said the commission’s concern is product placement arranged by an alcoholic beverage firm.

Beer companies, which have long advertised on television and account for the bulk of the alcohol advertising, were generally cool to the FTC report.

Miller, a unit of Philip Morris Cos., said brewers already must meet voluntary industry codes, network standards and state rules.

It “is a replication of [the] current . . . system,” the company said in a statement.

But liquor firms welcomed the report, which did not challenge their ability to advertise on television. When that industry lifted its decades-old voluntary ban on broadcast advertising in 1996, activists called for a government-imposed prohibition. President Clinton and the head of the Federal Communications Commission at the time, Reed Hundt, also called for restrictions.

Broadcasters are still reluctant to accept distilled spirits ads, which air primarily on cable television.

“We are responsible advertisers and believe that voluntary third-party review will reinforce a foundation of trust with the American people that we are a responsible industry,” a spokesman for United Distillers & Vintners North America Inc. told the Associated Press. The company’s brands include Smirnoff vodka and Guinness stout.

The FTC’s report also recommended curbing on-campus and spring break sponsorships and advertising by the alcoholic beverage makers, and efforts to reduce underage access to online advertising.