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FTC to increase oversight of Internet alcohol marketing


I have mixed feelings about the Federal Trade Commission requiring alcoholic beverage companies to reveal their “Internet marketing and data collection practices,” as reported here.

Most of the information I cite here came to me this morning from the Buffalo Trace Distillery, a Kentucky-based whiskey brewer, through an email blast. Unfortunately, the contents of that email are not available on the Internet, so I can’t provide a link.

But according to Buffalo Trace, the FTC “for the first time” has requested the information in order “to see how effective the industry’s voluntary guidelines are in reducing marketing messages to underage audiences.” The companies now under compulsary order by the FTC include Anheuser-Busch, Diageo, Constellation, Brown-Forman, Jackson Family Wines, Pernod Ricard and many others that are big players in the wine, beer and spirits industry.

The FTC is concerned, rightfully so, with Internet marketing of alcoholic beverages to people below the age of 21. According to Adweek magazine, which reported a version of the story yesterday, until fairly recently the FTC wasn’t terribly concerned with Internet marketing of alcoholic beverages. But all that changed following “the explosion in mobile apps and social media, reportedly a new favorite of alcohol marketers.” Seems the FTC became aware of a study which determined that “digital marketing…might be even more profound than the known risks of exposure to traditional marketing,” particularly when targeted to “youth who…increased their drinking levels more over time…into their late 20s.” You can find a link to this study by going here and then clicking on the “Alcohol Marketing in the Digital Age” link at the bottom of the page, which brings you the PDF.

The reason I have mixed feelings about this new policy by the FTC is because I’m concerned about the increasing encroachment of the government into our Internet activities. I grant that the government has a legitimate interest in combating underage drinking. It’s also obvious that alcoholic beverage companies are experts when it comes to marketing. See this report on how “Social networks are becoming the go-to platform for alcohol marketing,” which says “social media has become a new venue for promotion, and alcohol is no exception.” Check out, for example, this YouTube-like opener for Corona Beer. It’s really well made, addictive in its own way. Who wouldn’t want to be young, cute and lovable, on a warm beach at night, with other young, cute lovable kids, rocking out to live music while sucking up the suds? The possibilities for love are endless.

Of course these ads are reprehensible; they seek to entice young people into irresponsible behavior, at a point in their lives–teenage–when they’re least capable of self-discipline. On the other hand, how intrusive do we want government to get, even with giant corporations? It’s also unclear what the FTC means to do with the information it has required from the companies, which is due by June 11. Can the FTC force companies to drop their Internet ads? Is that censorship? What will the courts decide? As usual, the intersection of public policy, law and private behavior (remember, “corporations are people”) is an exceedingly complicated one.

  1. In my opinion this is all so silly; in Europe wine is food (Wine is what we here are mostly concerned with), but that aside, I would guess that the movies and alcohol have more to do with the appeal to the young than advertising (Will Washington evaluate and dictate to Hollywood?). What I see is Big-ger Government, the nanny state ever encroaching with its technological tentacles. Bit by bit, 0+1 we’ll all be enslaved by the bureaucrat and the statistician.
    Speaking of food and Government regulations, see what it it does for the Dairy Industry:

    And this from HighBeam Business: “As many as 2,000 dairy farmers could leave the industry in 2009 alone, according to the National Milk Producers Federation (NMPF). U.S. dairy farmers watched their revenues fall from $34.8 billion in 2008 to $24.3 billion in 2009–a 30.1 percent decline. California led the nation with more than $4.5 billion of the $24.3 billion followed by Wisconsin with more than $3.2 billion.”

  2. Jon Nelson says:

    Here is an open access link to my analysis of the general issue of evidence in the advertising and youth drinking studies (submitted also as a comment to the FTC);

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