Advertising and the Alcohol Industry

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ADVERTISING AND THE ALCOHOL INDUSTRY

The beverage alcohol industry includes companies that market beers and brews (malt liquors), wines and sparkling wines (fermented), and distilled spirits—whiskey, vodka, scotch, gin, rum, and flavored liquors. Sales of these products, usually through distributors, are limited to those businesses that have obtained special licenses to sell one or more of the above categories of products. For example, if a restaurant has only a license to serve beer and wine, it cannot serve other types of alcoholic beverages.

In the United States, alcoholic beverages and tobacco products are the only consumer goods that are legally restricted for sale only to those who are not minors—at least 21 years of age in the case of alcohol or 18 (19 in three states) in the case of tobacco. Sales to anyone under those ages, respectively, are illegal, yet every day thousands of minors buy beer, wine coolers, cigarettes, and snuff with no questions asked by store clerks or owners. Even if a store refuses to sell to minors, they can usually find a vending machine or ask an older friend to buy for them.

ALCOHOL USE BY AMERICANS

In a survey conducted in 1996, 109 million Americans age 12 and older had used alcohol in the previous month (51% of the population). About 32 million people (15.5%) engaged in binge drinking, defined as five or more drinks on the same occasion. Of these, about 11 million Americans (5.4%) were heavy drinkers, defined as five or more drinks on the same occasion on at least five different days in the past month.

The percentage of college freshmen who say they drink beer frequently or occasionally was 51.8 percent in 1998. Among all college students, the overall binge-drinking rate has stayed constant between 1993 and 1999 at 44 percent, but frequent binge drinkers rose from 20 percent in 1993 to 23 percent in 1999.

The percentage of high school seniors who reported having five or more drinks in a row in the last 2 weeks was 30.8 percent in 1999, up from 27.5 percent in 1993.

The Bureau of Alcohol, Tobacco and Firearms (ATF), in 2000, estimated that 14 million U.S. residents suffer from alcohol abuse and dependence, and 76 million are affected by the alcoholism of a family member.

The illegal use of alcoholic beverages by teenagers has generated a high level of concern on the part of health-care professionals, police, parents, and activist groups such as Mothers Against Drunk Driving (MAAD) and the Center for Science in the Public Interest (CSPI).

Another cause for concern is that the level of alcohol use in 1996 was strongly associated with illicit drug use. Thirty-one percent of the heavy drinkers were current illicit drug users; 16 percent of the binge (but not heavy drinkers) were illicit drug users; 5.3 percent of the other drinkers, but only 1.9 percent of the nondrinkers, were illicit drug users.

THE ADVERTISING PROBLEM

The high level of alcohol use by those under the age of 21 creates an advertising problem for the companies that market alcoholic beverages. How do you advertise to the 21-and-over group and also appear not to be appealing to the under-21 group? Since teenagers have a very strong desire to grow up fast, or at least participate in activities they view as adult, they are very vulnerable to anything they believe would help them achieve adulthood.

Critics accuse the alcoholic-beverage companies of making their advertising and promotional programs inviting to teenagers, who are already very receptive to the ideas of engaging in adult activities, being successful, being more confident, and being more attractive to the opposite sex. The alcoholic beverage companies respond that they follow the industry voluntary advertising guidelines and do not target teenagers. They also point to programs like the public service initiatives sponsored by America's beer industry, which encourages drinkers to "know when to say when," "drink smart or don't start," "think when you drink," or "drink safely."

WHO MINDS THE STORE?

The U.S. Bureau of Alcohol, Tobacco, and Fire-arms (ATF) in the Department of the Treasury is the federal agency with responsibility for overseeing the alcohol industry. Its rules discourage advertising claims that are obscene or misleading, as well as those that associate athletic ability with drinking. Also, the ATF takes the position that "unqualified health claims on products that pose increased health risks are deceptive."

Alcoholic beverages sold in the United States have to carry a warning on the container that states: "GOVERNMENT WARNING: (1) According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects. (2) Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems."

Until the 1990s, the alcohol content of beer could not be included on the labeling of the container or in any associated advertising. As a result of a suit by Adolph Coors Co., a federal court decision overturned this restriction on labeling, and so companies are permitted to label their beers and malt liquors with the alcohol content. Beer averages 5 percent alcohol, ales average 6 percent, malt liquors average 4.1 percent, wine 12 percent to 20 percent and distilled spirits from 40 percent (80 proof) to 50 percent (100 proof). Beer is usually sold in 12-ounce containers, whereas malt liquors are usually sold in 40-ounce bottles.

The Federal Trade Commission (FTC) also reviews advertising, with emphasis on instances of false or misleading ads. Neither the ATF nor FTC has been very aggressive in challenging ads that seem to be targeted to young drinkers or encourage heavy drinking.

The Food and Drug Administration (FDA) in the Department of Health and Human Services has no jurisdiction over alcohol advertising, with the exception of wines with less than 7 percent alcohol. Unlike pharmaceuticals, there is no mandate that labels or advertising materials for alcoholic products provide a listing of the risks/consequences, as well as the benefits. Americans regularly see ads, company logos, and billboards that encourage people to drink, but such advertising fails to provide information about the down side of drinking, especially excessive drinking.

WHAT IS ADVERTISING

Merriam-Webster's Collegiate Dictionary defines the verb advertise : "to call public attention to especially by emphasizing desirable qualities so as to arouse a desire to buy or patronize," The noun advertising includes "by paid announcements." The broad umbrella of advertising—in addition to television, radio, and print media—uses billboards, point-of-purchase signs and displays, and increasingly, sponsorship of special events such as music festivals; auto, bicycle, and boat racing; and other sports.

ROLE OF ADVERTISING

Advertising is used as a major tool in marketing. When a company first introduces a new product, the goals generally are:

To inform potential purchasers that a particular product is available and why they might like to try this new product.
To persuade people that they should go out and buy the product.
To let people know where the product can be purchased.
To reassure people who buy the product that they have made a wise choice in doing so.

Where more than one company sells products in a given category, the goals generally become the following:

To increase market share by taking business away from a competitive product. This can be done by offering a better product or a better value and/or by increasing the level of advertising and promotion to out-shout the competition.
To increase the size of the market by inducing more people to start using the product. In the case of alcoholic beverages, this can be done by aggressively promoting features that will appeal to the potential purchaser, that is, makes you more confident, more outgoing, more appealing to the opposite sex, and, in the case of minors, leads to participation in adult-type activities.
To increase the size of the market by inducing people to increase their usage of your product(s). This can be done by tying the product to occasions such as spring break and by promoting the product heavily to the target audiences.
To keep reassuring heavy drinkers that they are in good company by drinking the particular brand of beer or liquor being advertised. Since the ten percent of those who drink most heavily account for about 50 percent of all alcohol consumed in the United States, this is a very important reason to advertise.

ADVERTISING EXPENDITURES

The alcoholic-beverage companies spend between $1 and $2 billion each year in the print and broadcast media to advertise their products. In 1998, Anheuser-Busch Co., spent $630 million, Adolph Coors Co. spent $351 million, and Seagram Co. spent $461 million. An estimated $1 billion more was spent on other alcohol-related advertising and promotional programs.

Brewers and beer distributors spent many millions of dollars sponsoring sporting events, rock concerts, spring break promotions, and other activities heavily oriented to students on college campuses. They were also heavy advertisers and supporters of baseball, football, racing events, and concerts or other cultural events.

CORRELATION OF ADVERTISING TO CONSUMPTION

In August 1993, the National institute on alcohol abuse and alcoholism (niaaa) had this to say about alcohol, media, and advertising: The effects of mass communications in either promoting or preventing alcohol consumption and the problems associated with it are equivocal. Alcohol advertisements and broadcast media programming have been found to encourage a favorable view of alcohol use. Yet studies provide only modest support for the hypothesis that favorable presentations lead to positive attitudes and distorted perceptions, and consequently to increased consumption, particularly among youthful viewers. The effects of advertising bans and linkages between advertising expenditures and per capita consumption also appear to be weak and inconsistent.

There is, however, a general feeling that advertising, including all of the other promotions associated with it, plays a significant role in creating an image of desirability as far as the use of alcohol is concerned. Recent reviews in the literature (Atkin 1995; Lastovicka, 1995; Grube, 1995) show a large body of research indicating that exposure to or awareness of advertising contributes to an increase in drinking. For example, Atkin et al. (1983) found that greater exposure to advertising stimulates drinking, excessive drinking, and drinking and driving (or riding with a driver who has been drinking).

Although the majority of research supports an association between advertising and consumption, researchers do not agree on the magnitude of advertising's contribution to heavy drinking. G. Frank and G. Wilcox (1988) reported: Analysis of the results reveals no significant relationship between total advertising expenditures and consumption of beer. Significant relationships were found, however, between consumption of wine and distilled spirits and their advertising. It is emphasized that the relationships are correlational, not necessarily causal.

BEVERAGE ALCOHOL PER CAPITA CONSUMPTION

In the United States, per capita consumption of all alcoholic beverages combined reached its peak in 1980 to 1981; that of wine did not reach its peak until 1986. From 1980 to 1989, there was a 12 percent decrease in per capita ethanol (drinking alcohol) consumption—the only sustained decrease since Prohibition—down to 2.43 gallons per person. The greatest decrease was seen in the consumption of distilled spirits. The U.S. Department of Health and Human Services has an objective for the year 2000: To reduce the per capita alcohol consumption to no more than two gallons of ethanol (drinking alcohol) per person annually.

BEVERAGE ALCOHOL SALES

Beer ranks fourth (behind soft drinks, milk, and coffee) in per capita consumption of any kind of beverage, a position it has held for many years. Beer sales, at retail in 1999, were reported by Beverage World to be $54.2 billion, compared to $54.3 billion for soft drinks. This represents 5.99 billion gallons of beer or approximately 500 million bottles/cans of beer.

For 1999, Beverage World reported that Anheuser-Busch Co. had increased its share of the market from 46.6 to 49.9 percent. Miller Brewing Co. (part of Phillip Morris) had 21.3 percent of the market, and Adolph Coors 11.0 percent. According to Anheuser-Busch, in 1998, Budweiser commercials featuring Louis the Lizard and his catch-phrase "We could have been huge" were rated America's most popular campaign ever. In the January 2000 Super Bowl ads, Budweiser's "Rex the Dog" ad rated very high and the catchphrase "Whassup" received an advertising award.

The alcoholic spirits market in 1999 tallied $34.05 billion in retail sales and totaled 330 million gallons. Wine came in third in 1999 with retail sales of $17.38 billion, but second in gallonage at 530 million gallons. The combined retail sales of all three totaled $105.63 billion.

BEER INSTITUTE'S ADVERTISING AND MARKETING CODE

The Beer Institute's Advertising and Marketing Code is cited when the industry tries to deflect some of its critics' charges. A copy of the entire Advertising and Marketing Code may be obtained from the Beer Institute or the Internet. Some of the guidelines are:

These guidelines apply to all brewer advertising and marketing materials, including internet and other cyberspace media.
Beer advertising and marketing materials are intended for adults of legal purchase age who choose to drink and beer consumption is intended as a complement to leisure or social activity.
Beer advertising and marketing materials should not contain any lewd or indecent language or images, nor should it portray sexual passion, promiscuity or any other amorous activities as a result of consuming beer.
Beer advertising and marketing activities on college and university campuses, or in college media, should not portray consumption of beer as being important to education.

Anheuser-Busch has a College Marketing Guide. In its Event Sponsorship and Promotion statement it lists the following:

Events on Campus: Anheuser-Busch will limit its event sponsorship and promotion on campus to licensed retail establishments and those activities open to the general public, where most of the audience is reasonably expected to be above the legal purchase age.
Spring Break: At spring break destination locations, Anheuser-Busch will not conduct beer advertising, event sponsorships or promotions on beaches or at other outdoor locations or non-licensed premises where most of the audience is reasonably expected to be below the legal purchase age.

LIMITATIONS OF VOLUNTARY BEER INDUSTRY ADVERTISING CODES

The beer industry's voluntary advertising codes are written so as to restrict advertising practices as little as possible. Qualifications like "advertising should not be used where most of the audience is reasonably expected to be below the legal purchase age" or "will not conduct any event sponsorships or promotions on beaches… where most of the audience is reasonably expected to be below the legal purchase age" allows beer manufacturers a lot of leeway.

THE COSTS OF ALCOHOLISM

In the United States alcoholism is the most wide-spread form of drug abuse, affecting at least five million persons.

In 1995, according to the Substance Abuse and Mental Health Services Administration, alcohol abuse and alcoholism cost an estimated $166.5 billion, while drug abuse dependence cost $109.8 billion. More than 100,000 deaths each year are related to alcohol abuse.

(See also: Advertising and the Pharmaceutical Industry ; Advertising and Tobacco Use ; Social Costs of Alcohol and Drug Abuse )

BIBLIOGRAPHY

Advertising Age-Ad Age Dataplace 100 Leading Na-Tional Advertisers (1998). The American Freshman Survey: U.C.L.A. and The American Council of Education. Beverage World (2000)

Atkin, C. K. (1990). Journal of Adolescent Health Care. 11(1). 10-24.

Atkin, C.E. et. al. (1983) Journal of Drug Education 13:313-325.

Beer Institute. (1992) Advertising and Marketing Code.

Bureau of Alcohol, Tobacco and Firearms, (ATF), (2000) Department of the Treasury

Center for Science in the Public Interest. Washington, D.C.

Coalition for the Prevention of Alcohol Problems. Washington, D.C.

Distilled Spirits Council of the United States. (2000)

Frank, G., and Wilcox, G. (1988). Journal of Advertising, 16(3), 22-30.

Grube, J. W. (1995). National Institute on Alcohol Abuse and Alcoholism. Research Monograph, 28.

Harvard School of Public Health (1999). Survey.

Lastovicka, J. L. (1995). National Institute on Alcohol Abuse and Alcoholism. Research Monograph, 28.

Lieberman, L.R. and Orlandi, M. A. (1987). Alcohol Health and Research World, 12(1), 30-33.