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BULLETIN #646

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FTC REPORT FOCUSES ON ALCOHOL MARKETING AND SELF-REGULATION

 

STUDY FINDS HIGH LEVELS OF COMPLIANCE WITH VOLUNTARY PLACEMENT STANDARD

 

A new FTC report on alcohol marketing and youth examined industry efforts to reduce the likelihood that alcohol advertising will target those under the legal drinking age of 21. In addition, the report announced a new system for monitoring alcohol industry compliance with self-regulatory programs. The report–

 

• explains where alcohol suppliers spend their promotional dollars,
• provides data on compliance with the industry's advertising placement standard,
• discusses the status of external review of advertising complaints, and
• provides information about the Commission's education program to reduce teen access to alcohol.

 

FTC's THIRD REPORT ON STATUS OF ALCOHOL INDUSTRY SELF-REGULATION

 

This is FTC's third report on the status of alcohol industry self-regulation. FTC's first report in 1999 criticized the voluntary guidelines since the guidelines–

 

• at times, allowed alcohol ads to appear in media for which up to half the audience consisted of children and youth, and
• failed to provide for third-party consideration of complaints about compliance with the guidelines.

 

FTC's 2003 REPORT

 

FTC's 2003 report announced that the alcohol industry had agreed to obtain audience data before placing ads, and required that at least 70% of the audience for print, radio and TV ads consist of adults over 21. That report noted that one industry group had adopted third-party review of advertising and the report continued to urge the remaining two groups to follow suit.

 

This latest report is based on data provided by 12 major alcohol suppliers in response to FTC orders. And this report is the first to present detailed information about how alcohol companies allocate their promotional dollars. For example, the report found that–

 

• about 42% of such expenditures are used for traditional television, radio, print, and outdoor advertising;
• about 40% are used to help wholesalers and retailers promote alcohol;
• about 16% are used for sponsorships; and
• 2% are directed to other efforts, such as Internet and digital advertising.

 

HIGH DEGREE OF COMPLIANCE FOR ADVERTISING PLACEMENT

 

As to advertising placement, FTC found that over 92% of radio, television, and print ads disseminated by the 12 suppliers met the 70% standard. Since placements that missed the target were concentrated in smaller media, over 97% of total alcohol advertising "impressions" (individual exposures to advertising) met the 70% standard. The report also pointed out that all three segments of the alcohol industry have now adopted systems for third-party review of advertising complaints.

 

The report recommended that the industry should adopt the 70% standard for event sponsorships, and that self-regulatory review boards accept complaints from competitors and anonymous complainants. In addition, the report found that a 70% placement standard has now been adopted for Internet advertising, at FTC's request. Finally, the report announced a new monitoring system to help FTC assess the industry's efforts on an ongoing basis. Each year, FTC will issue orders requiring two to four suppliers to provide information about advertising and marketing practices and compliance with self-regulatory guidelines.

 

FTC's VOTE

 

FTC's vote to approve the Report on Alcohol Marketing and Advertising was 4-0. Commissioner Pamela Jones Harbour issued a separate statement concurring in part and dissenting in part.

 

LAWYER's REFERENCE SERVICE

 

Self-Regulation in the Alcohol Industry: Report of the Federal Trade Commission (June 2008).

 

# # #

 

Volume XXVIII
Issue 14
July 21, 2008
Pages 23-24

 

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Advertising Compliance Service is a REFERENCE COMPENDIUM of JLCom Publishing Co., L.L.C.

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NOTICE: This publication is not intended to provide legal advice. Persons who need legal services should contact a duly licensed professional.

 

© Copyright 2008-2009 JLCom Publishing Co., L.L.C. All rights reserved.

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