Alcohol And Tobacco Ads: Tv's Place?

Alcohol and tobacco advertising has been a contentious issue for decades. While the First Amendment generally protects alcohol advertising as commercial speech, tobacco advertising has faced increasing restrictions since the 1960s due to health concerns. Today, the World Health Organization (WHO) and the European Union advocate for a complete ban on tobacco advertising across all media platforms, including television. Alcohol advertising, on the other hand, continues to be permitted on television, although regulations aim to prevent deceptive or unfair claims and protect underage consumers from targeted marketing. This ongoing debate surrounding the presence of alcohol and tobacco advertising on television sparks discussions about public health, free speech, and the role of government regulation.

Alcohol advertising and the First Amendment

Alcohol advertising is generally protected by the First Amendment under the commercial speech doctrine. However, the First Amendment does not provide blanket protection for alcohol advertising, and several exceptions and limitations exist.

The Twenty-First Amendment, which repealed the Eighteenth Amendment's national prohibition on alcohol, gives states regulatory power over alcohol. This includes the power to regulate alcohol advertising, as long as it does not infringe on the First Amendment. Thus, states can implement restrictions on alcohol advertising, particularly when it is directed at minors or may affect children. For example, various states and localities have prohibited alcohol advertisements near schools or college campuses and restricted targeting minors.

The Federal Trade Commission (FTC) plays a crucial role in addressing alcohol advertising concerns. The FTC emphasizes self-regulation by the industry, encouraging companies to develop their own solutions to avoid targeting minors with alcohol advertising. The FTC also highlights the need to consider the First Amendment when assessing remedies for deceptive practices and selecting cases for enforcement to avoid chilling truthful and non-deceptive speech.

The Courts have allowed state regulation of alcohol advertising in specific circumstances. According to the Central Hudson test, developed in Central Hudson Gas and Electric Corp. v. Public Service Commission (1980), state regulation is permissible if it advances a significant governmental interest and is narrowly tailored to avoid unnecessarily restricting speech. This test was applied in 44 Liquormart, Inc. v. Rhode Island (1996), where the Court ruled against Rhode Island's ban on truthful, non-misleading commercial speech about alcohol prices.

The First Amendment's protection of alcohol advertising has been a subject of academic debate, as reflected in publications such as "Tension between the First and Twenty-First Amendments in State Regulation of Alcohol Advertising" and "New York's City New Ban On Alcohol Advertising Is Vulnerable to First Amendment Attack."

In summary, while alcohol advertising is generally protected by the First Amendment, it is not absolute. The Twenty-First Amendment empowers states to regulate alcohol advertising, and the Courts have provided a framework for evaluating the constitutionality of such regulations. The primary goal is to balance protecting minors from exposure to alcohol advertising while respecting the First Amendment rights of advertisers.

Tobacco advertising and sports sponsorships

Tobacco advertising has been a highly controversial topic, with public health organisations and governments taking steps to restrict and ban it due to its harmful effects on health. The World Health Organization (WHO) and the European Union have specified that tobacco advertising should not be allowed in any form of media, including television, radio, print, and the internet. Many countries have heeded this advice and implemented bans, with varying degrees of strictness.

In the United States, television and radio advertisements for cigarettes and smokeless tobacco have been prohibited since 1969. The country witnessed a significant decrease in sports-related marketing expenditures for cigarettes and smokeless tobacco from 1992 to 2013, with cigarette companies reporting zero spending on sports-related advertising after the prohibition of tobacco-brand sponsorship in sports in 2010. However, smokeless tobacco manufacturers continued to spend millions on sports promotions during the same period.

In the United Kingdom, commercials for cigarettes were banned on television in 1965, and those for loose tobacco and cigars were outlawed in 1991. Non-television advertising campaigns were permitted until stricter guidelines were introduced in 1986, preventing adverts from depicting a person smoking. Similarly, Hong Kong outlawed tobacco advertising on television in 1990, and tobacco companies were prohibited from sponsoring sporting events in 1999.

Despite these efforts, tobacco companies have historically sponsored sporting events, teams, and championships, leveraging the association with athletics to promote their brands. For example, NASCAR's top series was sponsored by the R. J. Reynolds Tobacco Company in the early 1970s, resulting in the series being named the "Winston Cup." Tobacco companies have also sought endorsements from major sports figures to promote their products.

While tobacco advertising and sponsorship in sports have been curbed in many countries, some nations still permit it. For instance, tobacco advertising is allowed in Indonesia, but displaying cigarette packaging and smoking activities is prohibited. In the Philippines, tobacco advertising is limited to point-of-sale promotions and select establishments like restaurants, bars, and billiard halls. These varying approaches to tobacco advertising and sports sponsorships reflect the ongoing global debate surrounding the issue.

Alcohol advertising and health claims

> "No statement relating to alcoholic beverages [...] may be printed on any container [...] unless [...] immediately preceded by [a] health warning statement [...]"

The ABLA prohibits alcoholic beverage manufacturers from altering the language of this health warning. However, it does not require the inclusion of this warning in advertisements or promotional materials. Instead, the Alcohol and Tobacco Tax and Trade Bureau (TTB) regulates health-related statements in alcohol advertising, prohibiting any misleading or unsubstantiated health claims. These claims must be supported by scientific or medical evidence and cannot suggest health benefits without complying with strict regulations.

The TTB, FDA, and FTC all play a role in regulating and policing health claims by the alcohol industry. The TTB is primarily responsible for evaluating the truthfulness and misleading nature of alcohol advertisements. Health statements are divided into three categories: health-related statements, health-related directional statements, and specific health claims. Specific health claims are considered misleading unless they are truthful, adequately substantiated by scientific evidence, properly detailed, and qualified with respect to individual categories. They must also disclose health risks associated with moderate and heavier alcohol consumption.

The complexity of alcohol regulation is evident in the example of saké, which is classified as wine under the FAA Act but as beer under the Internal Revenue Code (IRC). This classification impacts the applicable labeling requirements and health statement regulations. Additionally, non-alcoholic malt beverages with less than 0.5% alcohol by volume are still subject to TTB regulations and are governed by specific labeling requirements, such as being labelled as "near beer" or "malt beverage."

While tobacco advertising has been banned in many countries, including the United States, the United Kingdom, and Hong Kong, some countries like Indonesia and the Philippines still allow it with certain restrictions. The European Union and World Health Organization (WHO) have specified that tobacco advertising should be banned across all media platforms, including television. These regulations aim to prevent the depiction of identifiable tobacco brands and ensure appropriate age-rating and health warnings.

Tobacco advertising and brand stretching

The tobacco industry has long used brand stretching as a strategy to promote cigarettes and other tobacco products when faced with a ban on direct tobacco advertising. Brand stretching is a technique where a company extends one of its established brand names or identities to another product category. In the context of tobacco, this involves using a tobacco brand name on non-tobacco merchandise or services. For example, following a ban on tobacco advertising in Norway in 1975, advertisements for Camel boots started to appear in magazines and newspapers, featuring the distinctive logo and lettering of Camel cigarettes. While the ads did not directly reference cigarettes, they portrayed the rugged, outdoor imagery associated with the brand.

Another example of brand stretching is the use of similar colour schemes for tobacco and non-tobacco products. Tobacco companies may also sponsor events as a means of marketing, such as sports events or schools. For instance, in Zimbabwe, there is a school named the China Tobacco Ma Bo Hope Primary School. Tobacco companies may also use attractive packaging, point-of-sale promotions, and product placement as part of their brand-stretching strategies.

With the rise of digital media, tobacco companies have increasingly turned to less regulated online platforms such as Facebook, Instagram, and TikTok to market their products. They target individuals with online marketing promotions, including contests, quizzes, and videos, that encourage users to engage and share on their social media accounts, generating additional free advertising. Tobacco companies also pay influencers to post about tobacco products without disclosing their sponsorship, building buzz around new products.

To counter these tactics, governments have implemented various regulations and restrictions. For instance, the World Health Organization Framework Convention on Tobacco Control (FCTC) has led to widespread restrictions on tobacco advertising, promotion, and sponsorship. The European Union has also specified that tobacco advertising should not be allowed in traditional media, all media platforms, retail display, tobacco packaging, internet sales, and brand stretching. In the United States, the Broadcasting Act of 1990 outlawed commercials for cigarettes and cigars. Similarly, in the United Kingdom, while non-television advertising campaigns were still allowed, guidelines were made stricter in 1986 to prevent adverts from showing a person smoking.

Alcohol advertising and price competition

Alcohol advertising has been a subject of debate, with studies examining its impact on consumption patterns. Some research suggests that alcohol advertising bans can lead to a decrease in alcohol consumption, with each additional ban potentially reducing consumption by 5 to 8 percent. However, other empirical studies indicate that advertising does not increase alcohol consumption. The advertising response function illustrates a diminishing marginal product of advertising, where consumption becomes unresponsive to additional advertising beyond a certain point.

Price competition in the alcohol industry is influenced by various factors, including supply chain disruptions, tariffs, and the emergence of new product categories. For instance, importers of European wines, Scottish whiskies, and Japanese beers are facing elevated costs, impacting their price competitiveness. On the other hand, American craft brewers may gain an advantage as retailers prioritize domestic labels with lower landed costs.

Additionally, the rise of flavoured whiskeys, tequila, and ready-to-drink (RTD) beverages has intensified competition within the industry. Vodka producers, for instance, are emphasizing sustainability and exploring low- or zero-alcohol variants to remain competitive. Similarly, rum brands are focusing on strategic innovation, transparency, and consumer education to transform their image and drive long-term growth.

To stay resilient and profitable, alcohol marketing leaders must adapt to evolving market shifts. This includes embracing informed, consumer-centric strategies, showcasing authentic brand stories, respecting local tastes, and refining sustainability efforts. By balancing tradition with innovation, alcohol brands can forge deeper connections with modern drinkers and ensure their long-term success in a dynamic industry landscape.

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